CPT ASSET-BACKED CERTIFICATES TRUST 2004-EC1,
Issuer
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
XXXXXX LOAN SERVICING LP,
Servicer
and
THE BANK OF NEW YORK,
Trustee
_______________________________
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2004
_______________________________
ASSET-BACKED CERTIFICATES, SERIES 2004-EC1
Table of Contents
ARTICLE I
DEFINITIONS....................................................................3
Section 1.01 Defined Terms...............................................3
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..................55
Section 2.01 Conveyance of Mortgage Loans...............................55
Section 2.02 Acceptance of the Mortgage Loans...........................59
Section 2.03 Representations, Warranties and Covenants
of the Servicer and the Seller.............................61
Section 2.04 Representations and Warranties of the Depositor............73
Section 2.05 Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases.........................75
Section 2.06 Authentication and Delivery of Certificates................75
Section 2.07 Covenants of the Servicer..................................76
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................................77
Section 3.01 Servicer to Service Mortgage Loans.........................77
Section 3.02 Subservicing; Enforcement of the
Obligations of Servicer....................................78
Section 3.03 Rights of the Depositor, the Seller and
the Trustee in Respect of the Servicer.....................79
Section 3.04 Trustee to Act as Servicer.................................79
Section 3.05 Collection of Mortgage Loan Payments;
Certificate Account; Distribution Account;
Seller Shortfall Interest Requirement......................79
Section 3.06 Collection of Taxes, Assessments and
Similar Items; Escrow Accounts.............................82
Section 3.07 Access to Certain Documentation and
Information Regarding the Mortgage Loans...................83
Section 3.08 Permitted Withdrawals from the Certificate
Account, Distribution Account and the Carryover
Reserve Fund...............................................83
Section 3.09 [Reserved.]................................................85
Section 3.10 Maintenance of Hazard Insurance............................85
Section 3.11 Enforcement of Due-On-Sale Clauses;
Assumption Agreements......................................86
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized
Losses; Repurchase of Certain Mortgage Loans...............88
Section 3.13 Trustee to Cooperate; Release of Mortgage Files............91
Section 3.14 Documents, Records and Funds in Possession
of Servicer to be Held for the Trustee.....................92
Section 3.15 Servicing Compensation.....................................92
Section 3.16 Access to Certain Documentation............................93
Section 3.17 Annual Statement as to Compliance..........................93
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Section 3.18 Annual Independent Public Accountants'
Servicing Statement; Financial Statements..................93
Section 3.19 The Corridor Contracts.....................................94
Section 3.20 Prepayment Charges.........................................94
Section 3.21 Advance Facility...........................................95
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER....................................98
Section 4.01 Advances...................................................98
Section 4.02 Reduction of Servicing Compensation
in Connection with Prepayment Interest Shortfalls.........100
Section 4.03 [Reserved]................................................100
Section 4.04 Distributions.............................................100
Section 4.05 Monthly Statements to Certificateholders..................107
Section 4.06 [Reserved]................................................110
Section 4.07 [Reserved]................................................110
Section 4.08 Carryover Reserve Fund....................................110
Section 4.09 Distributions on the REMIC I Regular Interests............110
Section 4.10 [Reserved]................................................113
Section 4.11 Allocation of Realized Losses on the
REMIC I Regular Interests.................................113
Section 4.12 The Class P Certificates..................................114
ARTICLE V
THE CERTIFICATES.............................................................115
Section 5.01 The Certificates..........................................115
Section 5.02 Certificate Register; Registration of
Transfer and Exchange of Certificates.....................116
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates..............................................119
Section 5.04 Persons Deemed Owners.....................................120
Section 5.05 Access to List of Certificateholders'
Names and Addresses.......................................120
Section 5.06 Book-Entry Certificates...................................120
Section 5.07 Notices to Depository.....................................121
Section 5.08 Definitive Certificates...................................121
Section 5.09 Maintenance of Office or Agency...........................122
ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE SELLER...................................123
Section 6.01 Respective Liabilities of the Depositor,
the Servicer and the Seller...............................123
Section 6.02 Merger or Consolidation of the Depositor,
the Servicer or the Seller................................123
Section 6.03 Limitation on Liability of the Depositor,
the Seller, the Servicer and Others.......................123
Section 6.04 Limitation on Resignation of Servicer.....................124
Section 6.05 Errors and Omissions Insurance;
Fidelity Bonds............................................124
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ARTICLE VII
DEFAULT; TERMINATION OF SERVICER.............................................126
Section 7.01 Events of Default.........................................126
Section 7.02 Trustee to Act; Appointment of Successor..................127
Section 7.03 Notification to Certificateholders........................129
ARTICLE VIII
CONCERNING THE TRUSTEE.......................................................130
Section 8.01 Duties of Trustee.........................................130
Section 8.02 Certain Matters Affecting the Trustee.....................131
Section 8.03 Trustee Not Liable for Mortgage Loans.....................132
Section 8.04 Trustee May Own Certificates..............................132
Section 8.05 Indemnification of Trustee; Trustee's
Fees and Expenses.........................................132
Section 8.06 Eligibility Requirements for Trustee......................133
Section 8.07 Resignation and Removal of Trustee........................133
Section 8.08 Successor Trustee.........................................134
Section 8.09 Merger or Consolidation of Trustee........................135
Section 8.10 Appointment of Co-Trustee or Separate Trustee.............135
Section 8.11 Tax Matters...............................................136
ARTICLE IX
TERMINATION..................................................................139
Section 9.01 Termination upon Liquidation or
Repurchase of all Mortgage Loans..........................139
Section 9.02 Final Distribution on the Certificates....................139
Section 9.03 Additional Termination Requirements.......................140
ARTICLE X
MISCELLANEOUS PROVISIONS.....................................................142
Section 10.01 Amendment.................................................142
Section 10.02 Recordation of Agreement; Counterparts....................143
Section 10.03 Governing Law.............................................143
Section 10.04 Intention of Parties......................................144
Section 10.05 Notices...................................................144
Section 10.06 Severability of Provisions................................145
Section 10.07 Assignment................................................145
Section 10.08 Limitation on Rights of Certificateholders................145
Section 10.09 Inspection and Audit Rights...............................146
Section 10.10 Certificates Nonassessable and Fully Paid.................146
EXHIBITS
EXHIBIT A-1 Form of Class 1-A Certificate
EXHIBIT A-2 Form of Class 2-A Certificate
EXHIBIT A-3 Form of Class M-1 Certificate
EXHIBIT A-4 Form of Class M-2 Certificate
EXHIBIT A-5 Form of Class M-3 Certificate
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EXHIBIT A-6 Form of Class M-4 Certificate
EXHIBIT A-7 Form of Class M-5 Certificate
EXHIBIT A-8 Form of Class M-6 Certificate
EXHIBIT A-9 Form of Class M-7 Certificate
EXHIBIT A-10 Form of Class B Certificate
EXHIBIT B Form of Class C Certificate
EXHIBIT C Form of Class P Certificate
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedules
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the Trustee
on or prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 [Reserved]
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit
EXHIBIT J-1 Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Request for Release (for Trustee)
EXHIBIT N Request for Release (for Mortgage Loans Paid in Full,
Repurchased or Replaced)
EXHIBIT O Copy of Depositary Agreement
EXHIBIT P Form of Mortgage Note and Mortgage
EXHIBIT Q [reserved]
EXHIBIT R Form of Corridor Contract
EXHIBIT S Form of Corridor Contract Novation Agreement
EXHIBIT T Officer's Certificate with Respect to Prepayments
EXHIBIT U Standard & Poor's Predatory Lending Categorization
EXHIBIT V Form of Power of Attorney
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POOLING AND SERVICING AGREEMENT, dated as of November 1, 2004, by and
among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (the "Seller"),
XXXXXX LOAN SERVICING LP, a Delaware limited partnership, as Servicer (the
"Servicer"), and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
fifteen classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein).
REMIC I
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Corridor Contracts and the Carryover Reserve
Fund) subject to this Agreement as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC I." The Class R-I Interest will represent the sole
class of "residual interests" in REMIC I for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC I Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC I (the "REMIC I Regular Interests").
The "latest possible maturity date" (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I
Regular Interest shall be the 360th Distribution Date. None of the REMIC I
Regular Interests will be certificated.
Uncertificated REMIC I Uncertificated Principal Latest Possible Maturity
Designation Pass-Through Rate Balance Date
----------- ---------------------- ------------------------ ------------------------
LT-AA (1) $339,081,785.56
LT-1A1 (1) $1,644,150.00
LT-1A2 (1) $411,035.00
LT-2A1 (1) $317,060.00
LT-2A2 (1) $330,950.00
LT-2A3 (1) $57,900.00
LT-M1 (1) $167,810.00
LT-M2 (1) $108,990.00
LT-M3 (1) $67,470.00
LT-M4 (1) $60,550.00
LT-M5 (1) $60,550.00
LT-M6 (1) $51,900.00
LT-M7 (1) $34,600.00
LT-B (1) $34,600.00
LT-ZZ (1) $3,572,471.44
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LT-P (1) $100.00
LT-R (1) $100.00
LT-1SUB (1) $10,404.75
LT-1GRP (1) $51,508.45
LT-2SUB (1) $3,573.72
LT-2GRP (1) $17,691.92
LT-XX (1) $345,918,643.18
(1) Calculated as provided in the definition of Uncertificated REMIC I
Pass- Through Rate.
REMIC II
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC I Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
REMIC II. The Class R-II Interest will represent the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions under federal income
tax law. The following table irrevocably sets forth the designation,
Pass-Through Rate, aggregate Initial Certificate Principal Balance and Final
Scheduled Distribution Date for each Class of Certificates comprising the
interests representing "regular interests" in REMIC II. The "latest possible
maturity date" (determined solely for purposes of satisfying Treasury Regulation
Section 1.860G-1(a)(4)(iii)) for each Class of REMIC II Regular Certificates
shall be the 360th Distribution Date.
Aggregate Initial Certificate Final Scheduled
Designation Pass-Through Rate Principal Balance Distribution Date
Class 1-A-1 (1) $ 328,830,000.00 March 2035
Class 1-A-2 (1) $ 82,207,000.00 March 2035
Class 2-A-1 (1) $ 63,412,000.00 May 2024
Class 2-A-2 (1) $ 66,190,000.00 December 2033
Class 2-A-3 (1) $ 11,580,000.00 March 2035
Class M-1 (1) $ 33,562,000.00 February 2035
Class M-2 (1) $ 21,798,000.00 January 2035
Class M-3 (1) $ 13,494,000.00 January 2035
Class M-4 (1) $ 12,110,000.00 December 2034
Class M-5 (1) $ 12,110,000.00 December 2034
Class M-6 (1) $10,380,000.00 November 2034
Class M-7 (1) $6,920,000.00 September 2034
Class B (1) $6,920,000.00 July 2034
Class C (2) $22,490,118.45 November 2034
Class P (3) $ 100.00 November 2034
---------------
(1) Interest will accrue at a rate equal to the Pass-Through Rate, as
defined herein.
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(2) The Class C Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class C Certificates
outstanding from time to time which shall equal the Uncertificated
Principal Balance of the REMIC I Regular Interests (other than REMIC I
Regular Interest LT-P and REMIC I Regular Interest LT-R). The Class C
Certificates will not accrue interest on their Certificate Principal
Balance.
(3) The Class P Certificate will not be entitled to distributions of
interest.
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 A-R, Class P and Class C Certificates), the
period from and including the immediately preceding Distribution Date (or, in
the case of the first Distribution Date, from and including the Closing Date)
and to and including the day immediately preceding the current Distribution
Date. With respect to any Distribution Date and the Class C Certificates, the
calendar month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Certificates (other than the Class A-R, Class P
and Class C Certificates) will be made on the basis of the actual number of days
elapsed in the related Accrual Period and on a 360-day year. All calculations of
interest on the Class C Certificates will be made on the basis of a 360-day year
consisting of twelve 30-day months. The Class A-R Certificates and Class P
Certificates will not accrue any interest and therefore have no Accrual Period.
ADJUSTABLE RATE MORTGAGE LOANS: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable for the
life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.
ADJUSTED NET MORTGAGE RATE: As to each Mortgage Loan, the Mortgage Rate
less the Expense Fee Rate.
ADJUSTMENT DATE: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
ADVANCE: The aggregate of the advances required to be made by the
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such advances being equal to the sum of (A) the aggregate of
payments of principal and interest (only interest in the case of second lien
Mortgage Loans) (net of the Servicing Fees) on the Mortgage Loans that were due
on the related Due Date and not received by the Servicer as of the close of
business on the related Determination Date, and (B) with respect to each REO
Property that has not been
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liquidated, an amount equal to the excess, if any, of (x) one month's interest
(adjusted to the Net Mortgage Rate) on the Stated Principal Balance of the
related Mortgage Loan over (y) the net monthly rental income (if any) from such
REO Property deposited in the Certificate Account for such Distribution Date
pursuant to Section 3.12, less the aggregate amount of any such delinquent
payments that the Servicer has determined would constitute a Nonrecoverable
Advance were an advance to be made with respect thereto, provided however that
with respect to Balloon Loans as to which the Balloon Payment is not made when
due, the amount of any such advance shall equal an assumed monthly payment that
would have been due on the related Due Date based on the original principal
amortization schedule for such Balloon Loan.
ADVANCE FACILITY: As defined in Section 3.21 hereof.
ADVANCE FACILITY NOTICE: As defined in Section 3.21 hereof.
ADVANCE FINANCING PERSON: As defined in Section 3.21 hereof.
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
related 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.
APPLICABLE REGULATIONS : As to any Mortgage Loan, all federal, state
and local laws, statutes, rules and regulations applicable thereto.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date,
the sum of the Realized Losses with respect to the Mortgage Loans which shall
equal the amount, if any, by which, Certificate Principal Balance of all
Certificates (after all distributions of principal on such Distribution Date)
exceeds the Stated Principal Balance of the Mortgage Loans for such Distribution
Date, and which are to be applied as provided in Section 4.04 of this Agreement.
APPRAISED VALUE: The appraised value of the Mortgaged Property based
upon the appraisal made for the Seller by a fee appraiser at the time of the
origination of the related Mortgage Loan, or the sales price of the Mortgaged
Property at the time of such origination, whichever is less, or with respect to
any Mortgage Loan originated in connection with a refinancing, the appraised
value of the Mortgaged Property based upon the appraisal made at the time of
such refinancing.
ASSIGNMENT: An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form, which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
BALLOON LOAN: Each of the Mortgage Loans having an original term to
maturity that is shorter than the term of the related amortization schedule.
4
BALLOON PAYMENT: With respect to any Balloon Loan, the related Monthly
Payment payable on the stated maturity date of such Balloon Loan.
BANKRUPTCY CODE: Title 11 of the United States Code.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Class A Certificates and Subordinate Certificates
constitutes a Class of Book-Entry Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the State of California, State of Texas,
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.
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 CPT Asset-Backed Certificates,
Series 2004-EC1". Funds in the Carryover Reserve Fund shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement and
shall not be a part of any REMIC created under this Agreement.
CERTIFICATE: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-11, Exhibit B, Exhibit C and Exhibit D.
CERTIFICATE ACCOUNT: The separate Eligible Account created and
initially maintained by the Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Xxxxxx Loan
Servicing LP in trust for registered holders of CPT Asset-Backed Certificates,
Series 2004-EC1". Funds in the Certificate Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.
CERTIFICATE ACCOUNT DEPOSIT: An amount equal to the aggregate of all
amounts in respect of (i) principal of the Mortgage Loans due on or after the
Cut-off Date and received by the Servicer before the Closing Date and not
applied in computing the Cut-off Date Principal Balance thereof, and (ii)
interest on the Mortgage Loans due on and after the Cut-off Date and received by
the Servicer before the Closing Date.
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 C Certificates) and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate less
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the sum of (i) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (ii) in the case of any Subordinate
Certificate and the Class 1-A-2 Certificates any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04; provided that first, the Certificate Principal Balance of the Class 1-A-2
Certificates and second, the Class of Subordinate Certificates with the highest
payment priority to which Realized Losses have been allocated will be increased
by the amount of any Subsequent Recoveries on the Mortgage Loans not previously
allocated, but not by more than the amount of Realized Losses previously
allocated to reduce the Certificate Principal Balance of that Class. As to any
Class C Certificate and as of any Distribution Date, an amount equal to the
excess, if any, of (i) the aggregate Stated Principal Balance of the Mortgage
Loans over (ii) the aggregate Certificate Principal Balance of the Offered
Certificates. References herein to the Certificate Principal Balance of a Class
of Certificates shall mean the Certificate Principal Balances of all
Certificates in such Class.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02
hereof.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of 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 PRINCIPAL DISTRIBUTION TARGET AMOUNT: For any Distribution
Date, the excess of (i) the aggregate Certificate Principal Balance of the Class
1-A Certificates and Class 2-A Certificates immediately prior to such
Distribution Date, over (ii) the lesser of (x) 59.60% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided however, that if the aggregate Certificate
Principal Balance of the Subordinated Certificates has been reduced to zero, the
Class A Principal Distribution Target Amount shall equal the sum of the Class
1-A and Class 2-A Principal Distribution Target Amounts.
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CLASS 1-A CORRIDOR CONTRACT: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Class 1-A Certificateholders
(as assigned to the Trustee pursuant to the Class 1-A Corridor Contract Novation
Agreement), a form of which is attached hereto as Exhibit R.
CLASS 1-A CORRIDOR CONTRACT NOVATION AGREEMENT: The Novation Agreement
regarding the Class 1-A Corridor Contract dated as of the Closing Date among the
Seller, the Trustee and the Corridor Contract Counterparty, which is attached
hereto as Exhibit S.
CLASS 1-A CORRIDOR CONTRACT PAYMENT AMOUNT: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Class 1-A Corridor Contract.
CLASS 1-A CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date in
November 2010.
CLASS 1-A CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated November 16, 2004 reference number 8094016 evidencing the Class 1-A
Corridor Contract.
CLASS 1-A CERTIFICATE: Any Certificate designated as a "Class 1-A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
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-2 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 1-A-2
Certificates.
CLASS 1-A-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 1-A-1 Pass-Through Rate
on the Class 1-A-1 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS 1-A-2 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 1-A-2 Pass-Through Rate
on the Class 1-A-2 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS 1-A-1 INTEREST CARRY FORWARD AMOUNT: 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-2 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date,
the excess of (a) the Class 1-A-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 1-A-2
Certificates with respect to interest on such prior Distribution Dates.
CLASS 1-A-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date and
the Class 1-A-1 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 1-A-1 Certificates
7
would otherwise have accrued for such Distribution Date had the Class 1-A-1
Pass-Through Rate thereon been calculated as the sum of One-Month LIBOR and the
applicable Class 1-A-1 Margin for such Distribution Date, 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 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class 1-A-1 Pass-Through Rate (without
giving effect to the Net Rate Cap). CLASS 1-A-2 INTEREST CARRYOVER AMOUNT: For
any Distribution Date and the Class 1-A-2 Certificates, the sum of (A) the
excess of (i) the amount of interest the Class 1-A-2 Certificates would
otherwise have accrued for such Distribution Date had the Class 1-A-2
Pass-Through Rate thereon been calculated as the sum of One-Month LIBOR and the
applicable Class 1-A-2 Margin for such Distribution Date, over (ii) the amount
of interest accrued on the Class 1-A-2 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class 1-A-2 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class 1-A-2 Pass-Through Rate (without
giving effect to the Net Rate Cap).
CLASS 1-A-1 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.340% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.680% per
annum.
CLASS 1-A-2 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.380% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.760% per
annum.
CLASS 1-A-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 1-A-1 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
CLASS 1-A-2 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 1-A-2 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
CLASS 1-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
product of (a) the Class A Principal Distribution Target Amount and (b) a
fraction, the numerator of which is the Class 1-A Principal Distribution Target
Amount and the denominator of which is the sum of the Class 1-A Principal
Distribution Target Amount and Class 2-A Principal Distribution Target Amount.
CLASS 1-A PRINCIPAL DISTRIBUTION TARGET AMOUNT: For any Distribution
Date, the excess of:
(i) the aggregate Certificate Principal Balance of the
Class 1-A-1 Certificates and Class 1-A-2 Certificates immediately prior
to such Distribution Date, over
(ii) the lesser of (x) 59.60% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date after giving
8
effect to distributions to be made on that Distribution Date and (y)
the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 1 for such Distribution Date after giving effect to distributions
to be made on that Distribution Date minus 0.50% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 as of
the Cut-off Date.
CLASS 2-A CORRIDOR CONTRACT: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Class 2-A Certificateholders
(as assigned to the Trustee pursuant to the Class 2-A Corridor Contract Novation
Agreement), a form of which is attached hereto as Exhibit S.
CLASS 2-A CORRIDOR CONTRACT NOVATION AGREEMENT: The Novation Agreement
regarding the Class 2-A Corridor Contract dated as of the Closing Date among the
Seller, the Trustee and the Corridor Contract Counterparty, which is attached
hereto as Exhibit S.
CLASS 2-A CORRIDOR CONTRACT PAYMENT AMOUNT: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Class 2-A Corridor Contract.
CLASS 2-A CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date in
November 2010.
CLASS 2-A CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated November 16, 2004, reference number 80901L, evidencing the Class 2-A
Corridor Contract.
CLASS 2-A-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-1
Certificates.
CLASS 2-A-2 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-2
Certificates.
CLASS 2-A-3 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-3
Certificates.
CLASS 2-A-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-1 Pass-Through Rate
on the Class 2-A-1 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS 2-A-2 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-2 Pass-Through Rate
on the Class 2-A-2 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS 2-A-3 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-3 Pass-Through Rate
on the Class 2-A-3 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS 2-A-1 INTEREST CARRY FORWARD AMOUNT: 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.
9
CLASS 2-A-2 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date,
the excess of (a) the Class 2-A-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-2
Certificates with respect to interest on such prior Distribution Dates.
CLASS 2-A-3 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date,
the excess of (a) the Class 2-A-3 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-3
Certificates with respect to interest on such prior Distribution Dates.
CLASS 2-A-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date and
the Class 2-A-1 Certificates, 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 Class 2-A-1 Pass-Through Rate thereon been calculated
as the sum of One-Month LIBOR and the applicable Class 2-A-1 Margin for such
Distribution Date, 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 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class 2-A-1 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS 2-A-2 INTEREST CARRYOVER AMOUNT: For any Distribution Date and
the Class 2-A-2 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 2-A-2 Certificates would otherwise have accrued for such
Distribution Date had the Class 2-A-2 Pass-Through Rate thereon been calculated
as the sum of One-Month LIBOR and the applicable Class 2-A-2 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class 2-A-2
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
2-A-2 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class 2-A-2 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS 2-A-3 INTEREST CARRYOVER AMOUNT: For any Distribution Date and
the Class 2-A-3 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 2-A-3 Certificates would otherwise have accrued for such
Distribution Date had the Class 2-A-3 Pass-Through Rate thereon been calculated
as the sum of One-Month LIBOR and the applicable Class 2-A-3 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class 2-A-3
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
2-A-3 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class 2-A-3 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS 2-A-1 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.170% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.340% per
annum.
CLASS 2-A-2 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.350% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.700% per
annum.
10
CLASS 2-A-3 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.520% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.040% per
annum.
CLASS 2-A-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-1 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
CLASS 2-A-2 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-2 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
CLASS 2-A-3 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-3 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
CLASS 2-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
product of (a) the Class A Principal Distribution Target Amount and (b) a
fraction, the numerator of which is the Class 2-A Principal Distribution Target
Amount and the denominator of which is the sum of the Class 1-A Principal
Distribution Target Amount and Class 2-A Principal Distribution Target Amount.
CLASS 2-A PRINCIPAL DISTRIBUTION TARGET AMOUNT: For any Distribution
Date, the excess of:
(i) the aggregate Certificate Principal Balance of the
Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates immediately prior
to such Distribution Date, over
(ii) the lesser of (x) 59.60% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 for such
Distribution Date after giving effect to distributions to be made on
that Distribution Date and (y) the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 2 for such Distribution Date after
giving effect to distributions to be made on that Distribution Date
minus 0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 as of the Cut-off Date.
CLASS A-R CERTIFICATE: Any one of the Class A-R Certificates executed
by the Trustee substantially in the form annexed hereto as Exhibit D, composed
of the Class R-I Interest and Class R-II Interest.
CLASS A-R CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class A-R Certificates.
CLASS A-R PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (A) $100 over (B) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04.
CLASS B CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
11
CLASS B CERTIFICATE PRINCIPAL BALANCE: As of any date of determination,
the Certificate Principal Balance of the Class B Certificates.
CLASS B CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class B Pass-Through Rate on
the Class B Certificate Principal Balance immediately prior to such Distribution
Date.
CLASS B INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class B Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class B Certificates with
respect to interest on such prior Distribution Dates.
CLASS B INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class B Certificates, the sum of (A) the excess of (i) the amount of interest
the Class B Certificates would otherwise have accrued for such Distribution Date
had the Class B Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class B Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class B Certificates at the Net
Rate Cap for such Distribution Date and (B) the Class B Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class B Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS B MARGIN: For the Accrual Period 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 PASS-THROUGH RATE: For any Distribution Date, the lesser of (i)
One-Month LIBOR plus the Class B Margin and (ii) the related Net Rate Cap for
such Distribution Date.
CLASS B PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the excess of (i) the sum of: (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after taking into account distributions of
the Class 1-A Principal Distribution Amount and Class 2-A Principal Distribution
Amount for such Distribution Date), (B) the Class M-1 Certificate Principal
Balance (after taking into account distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal Balance (after taking into account distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class M-3
Certificate Principal Balance (after taking into account distribution of the
Class M-3 Principal Distribution Amount on such Distribution Date), (E) the
Class M-4 Certificate Principal Balance (after taking into account distribution
of the Class M-4 Principal Distribution Amount on such Distribution Date), (F)
the Class M-5 Certificate Principal Balance (after taking into account
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date); (G) the Class M-6 Certificate Principal Balance (after taking into
account distribution of the Class M-6 Principal Distribution Amount on such
Distribution Date); (H) the Class M-7 Certificate Principal Balance (after
taking into account distribution of the Class M-7 Principal Distribution Amount
on such Distribution Date); and (I) the Class B Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 93.50%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to
12
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Certificate Principal Balance of each other
Class of Offered Certificates is reduced to zero, the Class B Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.
CLASS C CERTIFICATE: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.
CLASS C CURRENT INTEREST: For any Distribution Date, the interest
accrued on the Class C Notional Amount during the related Accrual Period at the
Class C Pass-Through Rate.
CLASS C NOTIONAL AMOUNT: The aggregate amount of the Uncertificated
Principal Balance of the REMIC I Regular Interests other than REMIC I Regular
Interest LT-P and REMIC I Regular Interest LT-R.
CLASS C PASS-THROUGH RATE: A rate per annum equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A) through (O) below, and the denominator of
which is the Uncertificated Principal Balance of the REMIC I Regular Interests
(other than REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R).
For purposes of calculating the Pass Through Rate for the Class C Certificates,
the numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-AA minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT-AA;
(B) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-1A minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT-1A1;
(C) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-1A minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT-1A2;
(D) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-2A minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT-2A1;
(E) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-2A minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT-2A2;
(F) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-2A minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT-2A3;
13
(G) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-M1 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M1;
(H) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-M2 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M2;
(I) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-M3 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M3;
(J) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-M4 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M4;
(K) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-M5 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M5;
(L) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-M6 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M6;
(M) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-M7 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M7;
(N) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-B minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-B; and
(O) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest LT-ZZ minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT-ZZ.
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
CLASS M-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-1 Certificates.
CLASS M-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date.
14
CLASS M-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-1 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-1 Certificates
with respect to interest.
CLASS M-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-1 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-1 Certificates would otherwise have accrued for such Distribution
Date had the Class M-1 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-1 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-1 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-1 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-1 Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS M-1 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.600% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.900% per
annum.
CLASS M-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-1 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amounts on such Distribution Date) and (B) the Class M-1
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (x) 69.30% of the Stated Principal Balances of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date minus the OC Floor; provided, however, that
after the Certificate Principal Balance of each other Class of Offered
Certificates is reduced to zero, the Class M-1 Principal Distribution Amount for
such Distribution Date will equal 100% of the Principal Distribution Amount for
such Distribution Date.
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-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 during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date.
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
15
actually distributed to the Class M-2 Certificates with respect to interest on
such prior Distribution Dates.
CLASS M-2 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-2 Certificates, 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 Class M-2 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-2 Margin for such Distribution Date,
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 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-2 Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS M-2 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.630% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.945% per
annum.
CLASS M-2 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-2 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the lesser of (x) 75.60% of the aggregate Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Certificate Principal Balance of each other
Class of Offered Certificate is reduced to zero, the Class M-2 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.
CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
CLASS M-3 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-3 Certificates.
CLASS M-3 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS M-3 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-3 Current Interest with respect to prior Distribution
Dates over (b) the amount
16
actually distributed to the Class M-3 Certificates with respect to interest on
such prior Distribution Dates.
CLASS M-3 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-3 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-3 Certificates would otherwise have accrued for such Distribution
Date had the Class M-3 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-3 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-3 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-3 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-3 Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS M-3 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.680% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.020% per
annum.
CLASS M-3 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-3 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date) and
(D) the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 79.50% of the aggregate Stated
Principal Balances of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Certificate Principal
Balance of each of the other Class of Offered Certificate is reduced to zero,
the Class M-3 Principal Distribution Amount for such Distribution Date will
equal 100% of the Principal Distribution Amount for such Distribution Date.
CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
CLASS M-4 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-4 Certificates.
CLASS M-4 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance immediately prior to such
Distribution Date.
17
CLASS M-4 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-4 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-4 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-4 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-4 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-4 Certificates would otherwise have accrued for such Distribution
Date had the Class M-4 Pass-through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-4 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-4 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-4 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-4 Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS M-4 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.000% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.500% per
annum.
CLASS M-4 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-4 Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (E) the Class M-4 Certificate Principal Balance immediately prior to
such Distribution Date over (ii) the lesser of (x) 83.00% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date after
giving effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Certificate Principal
Balance of each of the other Classes of Offered Certificates if reduced to zero,
the Class M-4 Principal Distribution Amount for such Distribution Date will
equal 100% of the Principal Distribution Amount for such Distribution Date.
CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
CLASS M-5 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-5 Certificates.
18
CLASS M-5 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS M-5 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-5 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-5 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-5 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-5 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-5 Certificates would otherwise have accrued for such Distribution
Date had the Class M-5 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-5 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-5 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-5 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-5 Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS M-5 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.100% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.650% per
annum.
CLASS M-5 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-5 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (F) the Class M-5 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 86.50%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-5 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
19
CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
CLASS M-6 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-6 Certificates.
CLASS M-6 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS M-6 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-6 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-6 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-6 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-6 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-6 Certificates would otherwise have accrued for such Distribution
Date had the Class M-6 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-6 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-6 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-6 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-6 Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS M-6 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.250% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.875% per
annum.
CLASS M-6 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-6 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date) and (G) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 89.50%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to
20
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Certificate Principal Balance of each other
Class of Offered Certificates is reduced to zero, the Class M-6 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.
CLASS M-7 CERTIFICATE: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
CLASS M-7 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-7 Certificates.
CLASS M-7 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-7 Pass-Through Rate on
the Class M-7 Certificate Principal Balance immediately prior to such
Distribution Date.
CLASS M-7 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-7 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-7 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-7 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-7 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-7 Certificates would otherwise have accrued for such Distribution
Date had the Class M-7 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-7 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-7 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-7 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-7 Pass-Through Rate
(without giving effect to the Net Rate Cap).
CLASS M-7 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.700% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 2.550% per
annum.
CLASS M-7 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-7 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
CLASS M-7 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
21
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Class M-6 Certificate Principal Balance
(after taking into account distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date) and (H) the Class M-7 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (x)
91.50% of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-7 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
CLASS P CERTIFICATE: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
CLASS P CERTIFICATE PRINCIPAL BALANCE: As of any date of determination,
the Certificate Principal Balance of the Class P Certificates.
CLASS P 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 Class P Certificateholders and designated "The Bank of
New York, in trust for registered holders of CPT Asset-Backed Certificates,
Series 2004-EC1".
CLASS P PRINCIPAL DISTRIBUTION DATE: The first Distribution Date that
occurs after the end of the latest Prepayment Charge Period for all Mortgage
Loans that have a Prepayment Charge Period.
CLASS R-I INTEREST: The uncertificated Residual Interest in REMIC I.
CLASS R-II INTEREST: The uncertificated Residual Interest in REMIC II.
CLOSING DATE: November 30, 2004.
CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COMPENSATING INTEREST: With respect to any Distribution Date, an amount
equal to the lesser of (A) the aggregate of the Prepayment Interest Shortfalls
resulting from Principal Prepayments in full and (B) 50% of the aggregate
Servicing Fee for the related Collection Period.
CONDEMNATION PROCEEDS: All awards or settlements in respect of a taking
of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
22
CONFIRMATION AND AGREEMENTS: The Class 1-A Confirmation and Agreement,
Class 2-A Confirmation and Agreement and Subordinated Confirmation and
Agreement.
CORPORATE TRUST OFFICE: The designated office of the Trustee in the
State of New York where at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (Attention: Corporate Trust MBS Administration), telephone: (212)
000-0000, facsimile: (000) 000-0000.
CORRESPONDING CERTIFICATE: With respect to each REMIC I Regular
Interest set forth below, the Regular Certificate set forth in the table below:
REMIC I REGULAR INTEREST REMIC II CERTIFICATE
------------------------ --------------------
LT-1A1 Class 1-A-1 Certificate
LT-1A2 Class 1-A-2 Certificate
LT-2A1 Class 2-A-1 Certificate
LT-2A2 Class 2-A-2 Certificate
LT-2A3 Class 2-A-3 Certificate
LT-M1 Class M-1 Certificate
LT-M2 Class M-2 Certificate
LT-M3 Class M-3 Certificate
LT-M4 Class M-4 Certificate
LT-M5 Class M-5 Certificate
LT-M6 Class M-6 Certificate
LT-M7 Class M-7 Certificate
LT-B Class B Certificate
LT-P Class P Certificate
LT-R Class A-R Certificate
CORRIDOR CONTRACTS: The Class 1-A Corridor Contract, Class 2-A Corridor
Contract and Subordinated Corridor Contract.
CORRIDOR CONTRACT NOVATION AGREEMENT: The Class 1-A Corridor Contract
Novation Agreement, Class 2-A Corridor Contract Novation Agreement and
Subordinated Corridor Contract Novation Agreement, as applicable.
CORRIDOR CONTRACT COUNTERPARTY: Xxxxxx Brothers Special Financing,
Inc., and any permitted successors and assigns pursuant to the Corridor
Contracts.
CORRIDOR CONTRACT PAYMENT AMOUNT: The Class 1-A Corridor Contract
Payment Amount, Class 2-A Corridor Contract Payment Amount and Subordinated
Corridor Contract Payment Amount, as applicable.
23
CORRIDOR CONTRACT TERMINATION DATE: The Class 1-A Corridor Contract
Termination Date, Class 2-A Corridor Contract Termination Date and Subordinated
Corridor Contract Termination Date, as applicable.
CUMULATIVE LOSS TRIGGER EVENT: With respect to a Distribution Date on
or 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 (reduced by the
aggregate amount of Subsequent Recoveries received through the last day of that
Due Period) a Cumulative Loss Trigger Event 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
December 2007 -- November 2008 3.50% with respect to December 2007, plus an
additional 1/12th of 1.75% for each month thereafter until November 2008
December 2008 -- November 2009 5.25% with respect to December 2008, plus an
additional 1/12th of 1.50% for each month thereafter until November 2009
December 2009 -- November 2010 6.75% with respect to December 2009, plus an
additional 1/12th of 1.00% for each month thereafter until November 2010
December 2010 and thereafter 7.75%
CURRENT INTEREST: With respect to (i) the Class 1-A-1 Certificates, the
Class 1-A-1 Current Interest (ii) the Class 1-A-2 Certificates, the Class 1-A-2
Current Interest, (iii) the Class 2-A-1 Certificates, the Class 2-A-1 Current
Interest, (iv) the Class 2-A-2 Certificates, the Class 2-A-2 Current Interest
(v) the Class 2-A-3 Certificates, the Class 2-A-3 Current Interest (vi) the
Class M-1 Certificates, the Class M-1 Current Interest, (vii) the Class M-2
Certificates, the Class M-2 Current Interest, (viii) the Class M-3 Certificates,
the Class M-3 Current Interest, (ix) the Class M-4 Certificates, the Class M-4
Current Interest, (x) the Class M-5 Certificates, the Class M-5 Current
Interest, (xi) the Class M-6 Certificates, the Class M-6 Current Interest, (xii)
the Class M-7 Certificates, the Class M-7 Current Interest, (xiii) the Class B
Certificates, the Class B Current Interest and (xiv) the Class C Certificates,
the Class C Current Interest.
CUT-OFF DATE: In the case of any Mortgage Loan, the later of (x)
November 1, 2004 and (y) the date of origination of such Mortgage Loan. When
used with respect to any Mortgage Loans "the Cut-off Date" shall mean the
related Cut-off Dates.
CUT-OFF DATE PRINCIPAL BALANCE: As to any 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.
24
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
DEFINITIVE CERTIFICATES: As defined in Section 5.06.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
DELAY DELIVERY MORTGAGE LOANS: The Mortgage Loans identified on the
schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for which all
or a portion of a related Mortgage File is not delivered to the Trustee on or
prior to the Closing Date. The Depositor shall deliver (or cause delivery of)
the Mortgage Files to the Trustee: (A) with respect to at least 50% of the
Mortgage Loans in each Loan Group, not later than the Closing Date, (B) with
respect to at least an additional 40% of the Mortgage Loans, not later than 20
days after the Closing Date, and (C) with respect to the remaining 10% of the
Mortgage Loans, not later than 30 days after the Closing Date. To the extent
that the Seller shall be in possession of any Mortgage Files with respect to any
Delay Delivery Loan, until delivery to of such Mortgage File to the Trustee as
provided in Section 2.01, the Seller shall hold such files as agent and in trust
for the Trustee.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
DELINQUENCY TRIGGER EVENT: With respect to any Distribution Date on or
after the Stepdown Date, a Delinquency Trigger Event exists if the Rolling
Delinquency Percentage equals or exceeds the product of 41.00% and the Senior
Enhancement 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.
25
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.
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 CPT Asset-Backed Certificates, Series
2004-EC1". 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 December 2004.
DUE DATE: With respect to any Mortgage Loan and Due Period, the due
date for scheduled payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company) 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
26
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.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-RESTRICTED CERTIFICATES: The Class A-R, Class C and Class P
Certificates.
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)(x), (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date pursuant to Section 4.04(d)(i)(J) or 4.04(d)(ii)(J) and (iii)
the related Overcollateralization Reduction Amount, if any, for such
Distribution Date.
EXCESS OVERCOLLATERALIZATION AMOUNT: with respect to any Distribution
Date, the amount, if any, by which the Overcollateralized Amount exceeds the
Overcollateralization Target Amount for such Distribution Date (after giving
effect to distributions in respect of the Principal Remittance Amount for such
Distribution Date)
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 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 pursuant to Section 4.04(e)(i).
27
XXXXXX XXX: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
FIVE-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate
that is fixed for 60 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
FIXED RATE MORTGAGE LOANS: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of
the related Mortgage, including any Mortgage Loans delivered in replacement
thereof.
FREDDIE MAC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
GROSS MARGIN: The percentage set forth in the related Mortgage Note for
the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth in
the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.
GROUP 1 CERTIFICATES: The Class A-R, Class 1-A-1, and Class 1-A-2
Certificates.
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 1 NET WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 1.
GROUP 1 SEQUENTIAL TRIGGER EVENT: with respect to any Distribution Date
prior to the Distribution Date in December 2007, if the aggregate amount of
Realized Losses on the Mortgage Loans divided by the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date exceeds 3.50%, or on or after the
Distribution Date in December 2007, if a Trigger Event is in effect.
GROUP 2 CERTIFICATES: The Class 2-A-1, Class 2-A-2 and Class 2-A-3
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.
GROUP 2 NET WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 2.
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INDEX: As to any Adjustable Rate Mortgage Loan on any Adjustment Date
related thereto, the index for the adjustment of the Mortgage Rate set forth as
such in the related Mortgage Note, such index in general being the average of
the London interbank offered rates for six-month U.S. dollar deposits in the
London market, as set forth in The Wall Street Journal or some other source
generally accepted in the residential mortgage loan origination business and
specified in the related Mortgage Note, as most recently announced as of either
45 days prior to, or the first business day of the month immediately preceding
the month of, such Adjustment Date or, if the Index ceases to be published in
the original source or becomes unavailable for any reason, then the Index shall
be a new index selected by the Servicer, based on comparable information.
INITIAL ADJUSTMENT DATE: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
INITIAL MORTGAGE RATE: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Required Insurance Policy or any other insurance policy covering
a Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the 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 Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.
INSURED EXPENSES: Expenses covered by a Required Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
INTEREST CARRY FORWARD AMOUNT: With respect to (i) the Class 1-A-1
Certificates, the Class 1-A-1 Interest Carry Forward Amount, (ii) the Class
1-A-2 Certificates, the Class 1-A-2 Interest Carry Forward Amount (iii) the
Class 2-A-1 Certificates, the Class 2-A-1 Interest Carry Forward Amount, (iv)
the Class 2-A-2 Certificates, the Class 2-A-2 Interest Carry Forward Amount, (v)
the Class 2-A-3 Certificates, the Class 2-A-3 Interest Carry Forward Amount (vi)
the Class M-1 Certificates, the Class M-1 Interest Carry Forward Amount, (vii)
the Class M-2 Certificates, the Class M-2 Interest Carry Forward Amount, (viii)
the Class M-3 Certificates, the Class M-3 Interest Carry Forward Amount, (ix)
the Class M-4 Certificates, the Class M-4 Interest Carry Forward Amount, (x) the
Class M-5 Certificates, the Class M-5 Interest Carry Forward Amount, (xi) the
Class M-6 Certificates, the Class M-6 Interest Carry Forward Amount, (xii) the
Class M-7 Certificates, the Class M-7 Interest Carry Forward Amount, and (xiii)
the Class B Certificates, the Class B Interest Carry Forward Amount.
INTEREST DETERMINATION DATE: With respect to the Certificates (other
than the Class A-R, Class C and Class P Certificates) for the first Accrual
Period, November 26, 2004. With respect to the Certificates (other than the
Class A-R, Class C and Class P Certificates) and any Accrual
29
Period thereafter, the second LIBOR Business Day preceding the commencement of
such Accrual Period.
INTEREST FUNDS: On any Distribution Date, the Interest Remittance
Amount less the Trustee Fee for the Mortgage Loans for such Distribution Date.
INTEREST REMITTANCE AMOUNT: With respect to the Mortgage Loans in each
Loan Group and any 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) interest payments on any
Principal Prepayments received during the related Prepayment Period other than
Prepayment Interest Excess, (iii) all related Advances relating to interest with
respect to the Mortgage Loans, (iv) all Compensating Interest with respect to
the Mortgage Loans, (v) Liquidation Proceeds and Subsequent Recoveries with
respect to the Mortgage Loans collected during the related Due Period (to the
extent such Liquidation Proceeds and Subsequent Recoveries relate to interest),
and (v) for the Servicer Advance Date in December 2004, the Seller Shortfall
Interest Requirement for such 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 March 2035.
LIBOR BUSINESS DAY: Any day on which banks in the City of London,
England and New York 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 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 Condemnation
Proceeds 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 GROUP: Any of Loan Group 1 or Loan Group 2.
LOAN GROUP CHARACTERISTICS: The characteristics for each Loan Group
identified under the caption "The Mortgage Pool" in the Prospectus Supplement.
LOAN GROUP 1: The Group 1 Mortgage Loans.
LOAN GROUP 2: The Group 2 Mortgage Loans.
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
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(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.
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, in the case of a second lien Mortgage Loan, the unpaid principal
balance of the related first lien mortgage loan at the time of origination of
such second lien Mortgage Loan, and the denominator of which is the Appraised
Value of the related Mortgaged Property.
MARKER RATE: With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted
average of the Pass Through Rates for each REMIC I Regular Interest (other than
REMIC I Regular Interest LT-AA, REMIC 1 Regular Interest LT-1SUB, REMIC 1
Regular Interest LT-1GRP, REMIC Regular Interest LT-2SUB, REMIC 1 Regular
Interest LT-2GRP, REMIC 1 Regular Interest LT-XX, REMIC I Regular Interest LT-P
and REMIC I Regular Interest LT-R), with the rates on each such REMIC I Regular
Interest subject to a cap equal to the Pass Through Rate for the Corresponding
Class for such REMIC I Regular Interest, and the rate on REMIC I Regular
Interest LT-ZZ subject to a cap of zero for purposes of this calculation;
provided, however, for purposes of this calculation each such rate shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the accrual period and the denominator of which is 30.
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) SYSTEM: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
MOM LOAN: Any Mortgage Loan, as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 4.05.
MOODY'S: Xxxxx'x Investors Service, Inc., or any successor thereto.
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MORTGAGE: The mortgage, deed of trust or other instrument creating a
first or second lien on or first or second priority ownership interest in an
estate in fee simple in real property securing a Mortgage Note, including all
riders thereto.
MORTGAGE FILE: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
MORTGAGE LOAN: Such of the Group 1 Mortgage Loans and Group 2 Mortgage
Loans transferred and assigned to the Trustee pursuant to the provisions hereof
as from time to time are held as a part of the Trust Fund (including any REO
Property), the mortgage loans so held being identified in the Mortgage Loan
Schedule, notwithstanding foreclosure or other acquisition of title of the
related Mortgaged Property. Any Mortgage Loan subject to repurchase by the
Seller or Servicer as provided in this Agreement, shall continue to be a
Mortgage Loan hereunder until the Purchase Price with respect thereto has been
paid to the Trust Fund.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Servicer to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Exhibit F-1, setting
forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Loan Group;
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance of each of Loan Group 1 and
Loan Group 2 and the aggregate thereof;
(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 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;
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(xiii) a code indicating whether the Loan is subject to a Prepayment
Charge;
(xiv) a code indicating whether the Mortgage Loan is a first or
second lien Mortgage Loan;
(xv) the type and term of Prepayment Charge;
(xvi) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap; and
(g) the Gross Margin; and
(xvii) the purpose of the Mortgage Loan.
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
including all riders thereto.
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.
MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.
MORTGAGOR: The obligors on a Mortgage Note.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
NET RATE CAP: For any Distribution Date, (i) With respect to the Class
1-A-1 and Class 1-A-2 Certificates, the Group 1 Net WAC, (ii) with respect to
the Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates, the Group 2 Net WAC,
and (iii) with respect to the Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7 and Class B Certificates, the weighted average of the
Group 1 Net WAC and Group 2 Net WAC (weighted (x) in the case of the Group 1 Net
WAC, on the positive difference (if any) of the Stated Principal Balance of the
Mortgage Loans in Loan Group 1 over the outstanding aggregate Certificate
Principal Balance of the Class 1-A Certificates and (y) in the case of the Group
2 Net WAC, on the positive difference (if any) of the Stated Principal Balance
of the Mortgage Loans in Loan Group 2 over the
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outstanding aggregate Certificate Principal Balance the Class 2-A Certificates),
in the case of each of (i), (ii) and (iii) above, 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. For
federal income tax purposes, the equivalent of clause (i) above shall be
expressed as the weighted average of the Uncertificated REMIC I Pass-Through
Rate on REMIC I Regular Interest LT-1GRP, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest. For federal
income tax purposes, the equivalent of clause (ii) above shall be expressed as
the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I
Regular Interest LT-2GRP, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interest. For federal income tax purposes, the
equivalent of clause (iii) above shall be expressed as the weighted average of
the Uncertificated REMIC I Pass-Through Rates on (a) REMIC I Regular Interest
LT-1SUB, subject to a cap and a floor equal to the Group 1 Net WAC Rate and (b)
REMIC I Regular Interest LT-2SUB, subject to a cap and a floor equal to the
Group 2 Net WAC Rate; in each case weighted on the basis of the Uncertificated
Principal Balance of such REMIC I Regular Interests.
NET RATE CARRYOVER: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class 1-A-1 Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class 1-A-2 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class 2-A-1, Interest Carryover
Amounts for such Distribution Date (if any), (iv) the Class 2-A-2 Interest
Carryover Amount for such Distribution Date (if any), (v) the Class 2-A-3
Interest Carryover Amount for such Distribution Date (if any), (vi) the Class
M-1 Interest Carryover Amount for such Distribution Date (if any), (vii) the
Class M-2 Interest Carryover Amount for such Distribution Date (if any), (viii)
the Class M-3 Interest Carryover Amount for such Distribution Date (if any),
(ix) the Class M-4 Interest Carryover Amount for such Distribution Date (if
any), (x) the Class M-5 Interest Carryover Amount for such Distribution Date (if
any), (xii) the Class M-6 Interest Carryover Amount for such Distribution Date
(if any), (xii) the Class M-7 Interest Carryover Amount for such Distribution
Date (if any), and (xiii) the Class B Interest Carryover Amount for such
Distribution Date (if any); provided that when the term Net Rate Carryover is
used with respect to one Class of Certificates (other than the Class A-R, Class
C and Class P Certificates), it shall mean such carryover amount listed in
clauses (i), (ii), (iii) (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii)
or (xiii) as applicable, with the same Class designation. The Class A-R, Class C
and Class P Certificates shall not accrue any Net Rate Carryover.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.
NONRECOVERABLE ADVANCE: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise.
OC FLOOR: For any Distribution Date, 0.50% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
OFFERED CERTIFICATES: The Class 1-A-1, Class 1-A-2, Class 2-A-1, Class
2-A-2, Class 2-A-3, Class A-R, Class M-1, Class M-2, Class M-3, Class M-4, and
Class M-5 Certificates.
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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, (ii) in the case of the
Servicer, (x) signed by the President, an Executive Vice President, a Vice
President, an Assistant Vice President, the Treasurer, or one of the Assistant
Treasurers or Assistant Secretaries, or (y) if provided for in this Agreement,
signed by a Servicing Officer, as the case may be, and delivered to the
Depositor and the Trustee, as the case may be, as required by this Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period for the
Certificates (other than the Class A-R, Class P and Class C Certificates), the
rate determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 2.2075% 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 for such Certificates.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Depositor or the 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 Servicer, (ii) not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of
either, and (iii) not be connected with the Depositor or the 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 by the Servicer
pursuant to the last sentence of Section 9.01 hereof.
OPTIONAL TERMINATION DATE: Any Distribution Date on which the Stated
Principal Balance of the Mortgage Loans and REO Properties in the Trust Fund is
equal to or less than 10% of the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
ORIGINAL MORTGAGE LOAN: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
ORIGINAL VALUE: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Servicer or the sales price of such
property or, in the case of a refinancing, on an appraisal satisfactory to the
Servicer.
OTS: The Office of Thrift Supervision.
35
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 aggregate
Certificate Principal Balance of the Offered Certificates as of such
Distribution Date (after giving effect to distributions in respect of the
Principal Remittance Amount on such Distribution Date).
OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount for such Distribution Date (after
giving effect to distributions in respect of the Principal Remittance Amount for
such Distribution Date).
OVERCOLLATERALIZATION REDUCTION AMOUNT: For any Distribution Date for
which the Excess Overcollateralization Amount is, or would be, after taking into
account all other distributions to be made on that Distribution Date, greater
than zero, an amount equal to the lesser of (i) the Excess Overcollateralization
Amount for that Distribution Date and (ii) the Principal Remittance Amount for
the related Loan Group for that Distribution Date.
OVERCOLLATERALIZATION TARGET AMOUNT: (a) on each Distribution Date
prior to the Stepdown Date, 3.25% of the Cut-off Date Pool Principal Balance,
and (b) on and after the Stepdown Date, an amount equal to 6.50% of the
aggregate Stated Principal Balance 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 is
in effect, the Overcollateralization Target Amount will be the
Overcollateralization Target Amount on the Distribution Date immediately
preceding such Distribution Date.
OWNERSHIP INTEREST: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to the Class 1-A-1 Certificates, the
Class 1-A-1 Pass-Through Rate; with respect to the Class 1-A-2 Certificates, the
Class 1-A-2 Pass-Through Rate, with respect to the Class 2-A-1 Certificates, the
Class 2-A-1 Pass-Through Rate; with respect to the Class 2-A-2 Certificates, the
Class 2-A-2 Pass-Through Rate, with respect to the Class 2-A-3 Certificates, the
Class 2-A-3 Pass-Through Rate with respect to the Class M-1 Certificates, the
36
Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class M-3 Certificates, the
Class M-3 Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4 Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5 Pass-Through Rate; with respect to the Class M-6 Certificates, the
Class M-6 Pass-Through Rate; with respect to the Class M-7 Certificates, the
Class M-7 Pass-Through Rate; with respect to the Class B Certificates, the Class
B Pass-Through Rate and with respect to the Class C Certificates, the Class C
Pass-Through Rate.
PERCENTAGE INTEREST: With respect to any Certificate (other than the
Class P, Class C 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 C,
Class P and Class A-R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate.
PERIODIC RATE CAP: As to substantially all Adjustable Rate Mortgage
Loans and the related Mortgage Notes, the provision therein that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than 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)
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
37
writing will not result in the downgrading or withdrawal of the rating
then assigned to the Certificates by such Rating Agency;
(vi) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (v) above;
(vii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States or
any state thereof which, at the time of such investment, have one of
the two highest long term ratings of each Rating Agency (such rating
shall be the highest commercial paper rating of S&P for any such
securities) or such lower rating as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the rating
then assigned to the Certificates by such Rating Agency;
(viii) interests in any money market fund which at the date
of acquisition of the interests in such fund and throughout the time
such interests are held in such fund has the highest applicable long
term rating by each Rating Agency or such lower rating as each Rating
Agency has confirmed in writing will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by such
Rating Agency;
(ix) short term investment funds sponsored by any trust
company or national banking association incorporated under the laws of
the United States or any state thereof which on the date of acquisition
has been rated by each Rating Agency in their respective highest
applicable rating category or such lower rating as each Rating Agency
has confirmed in writing will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by such
Rating Agency; and
(x) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any
Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency;
(xi) 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 Servicer but not yet deposited in the
Certificate Account) may be invested in
38
investments (other than money market funds) treated as equity interests
for Federal income tax purposes, unless the Servicer shall receive an
Opinion of Counsel, at the expense of Servicer, to the effect that such
investment will not adversely affect the status of any such REMIC as a
REMIC under the Code or result in imposition of a tax on any such
REMIC. Permitted Investments that are subject to prepayment or call may
not be purchased at a price in excess of par.
PERMITTED TRANSFEREE: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC to fail to qualify as a REMIC at
any time that any Certificates are Outstanding. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject to
tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such government unit.
PERSON: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
POOL STATED PRINCIPAL BALANCE: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans as of the first day of the related Due Period (after
giving effect to Principal Prepayments in the Prepayment Period including during
such Due Period).
PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to the Offered Certificates.
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PREPAYMENT CHARGE: As to a Mortgage Loan, any charge paid by a
Mortgagor in connection with certain partial prepayments and all prepayments in
full made within the related Prepayment Charge Period, the Prepayment Charges
with respect to each applicable Mortgage Loan being identified in the Prepayment
Charge Schedule.
PREPAYMENT CHARGE PERIOD: As to any Mortgage Loan the period of time
during which a Prepayment Charge may be imposed.
PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Prepayment
Charges included in the Trust Fund on that date, (including the prepayment
charge summary attached thereto). The Prepayment Charge Schedule shall contain
the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan account number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination in which the related
Mortgage Property is located;
(iv) the first date on which a Monthly Payment is or was
due under the related Mortgage Note;
(v) the term of the Prepayment Charge;
(vi) the original principal amount of the related Mortgage
Loan; and
(vii) the Cut-off Date Principal Balance of the related
Mortgage Loan.
The Prepayment Charge Schedule shall be amended from time to time by
the Servicer in accordance with this Agreement.
PREPAYMENT INTEREST EXCESS: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full during
the portion of the Prepayment Period from the related Due Date to the end of
such Prepayment Period, any payment of interest received in connection therewith
(net of any applicable Servicing Fee) representing interest accrued for any
portion of such month of receipt.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full,
or that became a Liquidated Loan during the portion of the Prepayment Period
from the beginning of such Prepayment Period to the related Due Date in such
Prepayment Period (in each case, other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
2.04, 3.12 or 9.01 hereof), the amount, if any, by which (i) one month's
interest at the applicable Net Mortgage Rate on the Stated Principal Balance of
such Mortgage Loan immediately prior to such prepayment (or liquidation) exceeds
(ii) the amount of interest paid or collected in connection with such Principal
Prepayment or such liquidation proceeds.
40
PREPAYMENT PERIOD: As to any Distribution Date and Due Date, the period
beginning with the opening of business on the sixteenth day of the calendar
month preceding the month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, the period from November 1, 2004) and
ending on the close of business on the fifteenth day of the month in which such
Distribution Date occurs.
PRIME RATE: The prime commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time. The Prime Rate shall be
adjusted automatically, without notice, on the effective date of any change in
such prime commercial lending rate. The Prime Rate is not necessarily the Bank
of New York's lowest rate of interest.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date
and a Loan Group, the sum of (i) the Principal Remittance Amount for such Loan
Group for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Loan Group for such Distribution Date minus (iii) the amount of
any related Overcollateralization Reduction Amount for such Loan Group for such
Distribution Date.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Servicer in accordance with the
terms of the related Mortgage Note.
PRINCIPAL REMITTANCE AMOUNT: As to any Distribution Date and the
Mortgage Loans in a Loan Group, (a) the sum, without duplication, of: (i) the
scheduled principal due during the related Due Period and collected on or before
the related Determination Date or advanced on or before the related Servicer
Advance Date, (ii) Principal Prepayments collected in the related Prepayment
Period, (iii) the Stated Principal Balance of each Mortgage Loan that was
repurchased by the Seller or purchased by the 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 (v) all Liquidation Proceeds and Subsequent Recoveries 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 and (vi) rental income
from any REO Property.
PRIVATE CERTIFICATES: The Class M-6 Certificates, Class M-7
Certificates, Class B Certificates, Class C Certificates and Class P
Certificates.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated November 23,
2004, relating to the public offering of the Offered Certificates offered
thereby.
PUD: A Planned Unit Development.
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PURCHASE PRICE: With respect to any Mortgage Loan (x) required to be
(1) repurchased by the Seller or purchased by the 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 Servicer has a right
to purchase pursuant to Section 3.12 hereof, an amount equal to the sum of (i)
100% of the unpaid principal balance (or, if such purchase or repurchase, as the
case may be, is effected by the Servicer, the Stated Principal Balance) of the
Mortgage Loan as of the date of such purchase, (ii) accrued interest thereon at
the applicable Mortgage Rate (or, if such purchase or repurchase, as the case
may be, is effected by the 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 Servicer, the date through
which interest was last advanced and not reimbursed by the Servicer) to (b) the
Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders, and (iii) costs and damages incurred by the Trust Fund in
connection with a repurchase pursuant to Section 2.03 hereof that arises out of
a violation of any predatory or abusive lending law which also constitutes an
actual breach of representation (xxxiv) of Section 2.03(b) hereof.
RATING AGENCY: Each of S&P and Xxxxx'x. 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.
The amount of a Realized Loss on a Liquidated Loan will be reduced by the amount
of Subsequent Recoveries received with respect to such Liquidated Loan.
RECORD DATE: With respect to any Distribution Date and the
Certificates, other than the Class A-R, Class C and Class P Certificates, the
Business Day immediately preceding such Distribution Date, or if such
Certificates are no longer Book-Entry Certificates, the last Business Day of the
month preceding the month of such Distribution Date. With respect to the Class
A-R, Class C and Class P Certificates, the last Business Day of the month
preceding the month of a Distribution Date.
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REFERENCE BANK RATE: With respect to any Accrual Period for the Offered
Certificates (other than the Class A-R, Class P and Class C Certificates), the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Offered 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 aggregate Certificate Principal
Balance of the Offered Certificates on such Interest Determination Date.
REFERENCE BANKS: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.
REFINANCING MORTGAGE LOAN: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
REGULAR CERTIFICATE: Any Certificate other than a Class A-R Certificate
Certificate.
RELIEF ACT: The Servicemembers Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC I: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files; (ii) all payments on and
collections in respect of the Mortgage Loans due after the Cut-off Date (other
than Monthly Payments due in July 2004 and reflected in the Cut-off Date
Principal Balance) as shall be on deposit in the Certificate Account and
identified as belonging to the Trust Fund; (iii) property which secured a
Mortgage Loan and which has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure; (iv) Required
Insurance Policies pertaining to the Mortgage Loans, if any; and (v) all
proceeds of clauses (i) through (iv) above. The Corridor Contracts and Carryover
Reserve Fund will not be assets of REMIC I.
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests then
outstanding and (ii) the Uncertificated Pass-Through Rate for REMIC I Regular
Interest LT-AA minus the Marker Rate, divided by (b) 12.
43
REMIC I MARKER ALLOCATION PERCENTAGE: 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-1A1, REMIC I Regular
Interest LT-1A2, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC I Regular Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC 1 Regular Interest LT-M6, REMIC 1
Regular Interest LT-M7, REMIC I Regular Interest LT-B, REMIC I Regular Interest
LT-ZZ, REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R.
REMIC I OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests minus (ii) the Uncertificated Principal Balances
of REMIC I Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC I
Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I Regular
Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2,
REMIC I Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular
Interest LT-M5, REMIC 1 Regular Interest LT-M6, REMIC 1 Regular Interest LT-M7,
and REMIC I Regular Interest LT-B, in each case as of such date of
determination.
REMIC I OVERCOLLATERALIZATION TARGET AMOUNT: 0.50% of the
Overcollateralization Target Amount.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the sum of the Uncertificated
Principal Balances of REMIC I Regular Interests LT-1A1, LT-1A2, LT-2A1, LT-2A2,
LT-2A3, LT-M1, LT-M2, LT-M3, LT-M4, LT-M5, REMIC 1 Regular Interest LT-M6, REMIC
1 Regular Interest LT-M7, and LT-B and the denominator of which is the sum of
the Uncertificated Principal Balances of REMIC I Regular Interests LT-1A1,
LT-1A2, LT-2A1, LT-2A2, LT-2A3, LT-M1, LT-M2, LT-M3, LT-M4, LT-M5, LT-M6, LT-M7,
LT-B and LT-ZZ.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC I Regular
Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I Regular Interest
LT-2A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I
Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest
LT-M5, REMIC 1 Regular Interest LT-M6, REMIC 1 Regular Interest LT-M-7, REMIC I
Regular Interest LT-B, REMIC I Regular Interest LT-ZZ, REMIC, REMIC I Regular
Interest LT-P, REMIC I Regular Interest LT-R, REMIC I Regular Interest LT-1SUB,
REMIC I Regular Interest LT-1GRP, REMIC I Regular Interest LT-2SUB, REMIC I
Regular Interest LT-2GRP and REMIC I Regular Interest LT-XX.
REMIC I REGULAR INTEREST LT-AA: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-1A1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal
44
Balance, that bears interest at the related Uncertificated REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I REGULAR INTEREST LT-1A2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2A1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2A2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2A3: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M3: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M4: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M5: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
45
REMIC I REGULAR INTEREST LT-M6: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M7: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-B: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-ZZ: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-P: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-R: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-1SUB: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-1GRP: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2SUB: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2GRP: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated
46
Principal Balance, that bears interest at the related Uncertificated REMIC I
Pass-Through Rate, and that has such other terms as are described herein.
REMIC I REGULAR INTEREST LT-XX: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-ZZ MAXIMUM INTEREST DEFERRAL AMOUNT: With
respect to any Distribution Date, the sum of (a) the excess of (i)
Uncertificated Accrued Interest calculated with the Uncertificated Pass-Through
Rate for REMIC I Regular Interest LT-ZZ and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC I
Regular Interest LT-ZZ over (y) the REMIC I Overcollateralized Amount, in each
case for such Distribution Date, over (ii) Uncertificated Accrued Interest on
REMIC I Regular Interests LT-1A1, LT-1A2, LT-2A1, LT-2A2, LT-2A3, LT-M1, LT-M2,
LT-M3, LT-M4, LT-M5, LT-M6, LT-M7, and LT-B, with the rate on each such REMIC I
Regular Interest subject to a cap equal to the Pass-Through Rate on the
Corresponding Certificate for the purpose of this calculation.
REMIC I SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LT-1SUB, REMIC I Regular Interest LT-1GRP, REMIC I Regular
Interest LT-2SUB, REMIC I Regular Interest LT2-GRP and REMIC I Regular Interest
LT-XX.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the designation
"SUB,", equal to the ratio among, with respect to each such REMIC I Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the Certificate Principal
Balance of the Class A Certificates, Class A-R Certificates and Class P
Certificates in the related Loan Group.
REMIC II: The segregated pool of assets consisting of all of the REMIC
I Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of REMIC II Regular Interests and the Class A-R Certificate (in respect
of the Class R-II Interest).
REMIC II REGULAR CERTIFICATES: Any of the Class 1-A-1, Class 1-A-2,
Class 2-A-1, Class 2-A-2, Class 2-A-3, Class M-1, Class M-2, Class M-3, Class
M-4 and Class M-5, Class M-6, Class M-7 and Class B Certificates.
REMIC II REGULAR INTERESTS: The REMIC Regular Certificates.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
47
REO DISPOSITION: The sale or other disposition of an REO Property on
behalf of the Trust Fund.
REO PROPERTY: A Mortgaged Property acquired by the Servicer on behalf
of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit N, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (a) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (c) have the same Index, Periodic Rate Cap and intervals
between Adjustment Dates as that of the Deleted Mortgage Loan and a Gross Margin
not more than 1% per annum higher or lower than that of the Deleted Mortgage
Loan; and (d) not permit conversion of the related Mortgage Rate to a fixed
Mortgage Rate; (iii) have the same or higher credit quality characteristics than
that of the Deleted Mortgage Loan; (iv) at the time of transfer to the Trust
Fund, be accruing interest at a Mortgage Rate not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (vi) have a remaining term to
maturity no greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate or visa versa; (viii) provide for a prepayment
charge on terms substantially similar to those of the prepayment charge, if any,
of the Deleted Mortgage Loan; (ix) have the same lien priority as the Deleted
Mortgage Loan; (x) constitute the same occupancy type as the Deleted Mortgage
Loan; (xi) [reserved], and (xii) comply with each representation and warranty
(other than a statistical representation or warranty) set forth in Section 2.03
hereof.
REQUEST FOR RELEASE: The Request for Release submitted by the 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.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
ROLLING DELINQUENCY PERCENTAGE: With respect to any Distribution Date
on or after the Stepdown Date, the average, over the past three months, of a
fraction (expressed as a
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percentage), (a) the numerator of which is the aggregate Stated Principal
Balances for such Distribution Date of all Mortgage Loans 60 or more days
delinquent as of the last day of the preceding month (including Mortgage Loans
in bankruptcy, foreclosure and REO Properties) and (b) the denominator of which
is the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
or any successor thereto.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
SELLER SHORTFALL INTEREST REQUIREMENT: For the Servicer Advance Date in
December 2004, to the extent not cover by Excess Cashflow, an amount equal to 30
days interest on the Stated Principal Balance of each Mortgage Loans that does
not have a scheduled payment of interest due in the related Due Period at the
Net Mortgage Rates for such Mortgage Loans.
SENIOR CERTIFICATES: The Class 1-A-1, Class 1-A-2, Class 2-A-1, Class
2-A-2, Class 2-A-3 and Class A-R Certificates.
SENIOR ENHANCEMENT PERCENTAGE: With respect to each Distribution Date
on or after the Stepdown Date, the fraction (expressed as a percentage) (1) the
numerator of which is the excess of (a) the aggregate Stated Principal Balance
of the Mortgage Loans for the preceding Distribution Date over (b) (i) before
the aggregate Certificate Principal Balance of the Senior Certificates has been
reduced to zero, the aggregate Certificate Principal Balance of the Senior
Certificates, or (ii) after the Certificate Principal Balances of the Senior
Certificates have been reduced to zero, the Certificate Principal Balance of the
most senior Class of Certificates outstanding as of the preceding Servicer
Advance Date and (2) the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans for the preceding Distribution Date.
SERVICER: Xxxxxx Loan Servicing LP, a Delaware limited partnership, and
its successors and assigns, in its capacity as Servicer hereunder or any
successor Servicer appointed as herein provided.
SERVICER ADVANCE DATE: As to any Distribution Date, the Business Day
immediately preceding such Distribution Date.
SERVICER TERMINATION TRIGGER: With respect to any Distribution Date, a
Servicer Termination Trigger exists when the aggregate amount of cumulative
Realized Losses incurred since the Cut-off Date through the last day of the
related Due Period divided by the initial Pool Stated Principal Balance exceeds
the applicable percentages set forth below with respect to such Distribution
Date:
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DISTRIBUTION DATE OCCURRING IN PERCENTAGE
----------------------------------- ------------
December 2007 through November 2008 4.50%
December 2008 through November 2009 6.75%
December 2009 through November 2010 8.75%
December 2010 and thereafter 10.00%
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (i)
the preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.10.
SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan or, in the event of any payment of
interest that accompanies a Principal Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate on the Stated Principal Balance of such
Mortgage Loan for the period covered by such payment of interest.
SERVICING FEE RATE: With respect to each Mortgage Loan, 0.50% per
annum.
SERVICING OFFICER: Any officer of the 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 Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
SERVICING RIGHTS PLEDGEE: One or more lenders, selected by the
Servicer, to which the Servicer may pledge and assign all of its right, title
and interest in, to and under this Agreement, including Wachovia Bank, National
Association.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial Prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective any delinquency in payment by the related mortgagor with respect to
Actuarial Mortgage Loans, and (ii) as of any Distribution Date, the Stated
Principal Balance of the Mortgage Loan as of its Cut-off Date, minus the sum of
(a) the principal portion of 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 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 Servicer Advance Date related to such Distribution
Date, (b) all Principal Prepayments with respect to such Mortgage Loan received
by the 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 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
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Date following the Due Period in which such Mortgage Loan becomes a Liquidated
Loan. References herein to the Stated Principal Balance the Mortgage Loans at
any time shall mean the aggregate Stated Principal Balances of all Mortgage
Loans in the Trust Fund as of such time.
STEPDOWN DATE: The earlier to occur of (i) the Distribution Date
following the Distribution Date on which the aggregate Certificate Principal
Balance of the Senior Certificates is reduced to zero and (ii) the later to
occur of (a) the Distribution Date in December 2007 or (b) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Senior Certificates (after calculating anticipated distributions on such
Distribution Date) is less than or equal to 59.60% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
SUBORDINATE CERTIFICATES: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7 and Class B Certificates.
SUBORDINATED CORRIDOR CONTRACT: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Subordinate Certificateholders
(as assigned to the Trustee pursuant to the Subordinated Corridor Contract
Novation Agreement), a form of which is attached hereto as Exhibit S.
SUBORDINATED CORRIDOR CONTRACT NOVATION AGREEMENT: The Novation
Agreement regarding the Subordinated Corridor Contract dated as of the Closing
Date among the Seller, the Trustee and the Corridor Contract Counterparty, which
is attached hereto as Exhibit S.
SUBORDINATED CORRIDOR CONTRACT PAYMENT AMOUNT: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Subordinated Corridor Contract.
SUBORDINATED CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date
in November 2011.
SUBORDINATED CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated November 16, 2004, reference number 809415L, evidencing the Subordinated
Corridor Contract.
SUBSERVICER: As defined in Section 3.02(a).
SUBSERVICING AGREEMENT: As defined in Section 3.02(a).
SUBSEQUENT RECOVERIES: Unexpected recoveries, net of reimbursable
expenses, with respect to Mortgage Loans that have been previously liquidated
and that resulted in a Realized Loss.
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.
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TAX MATTERS PERSON: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F 4(d) and temporary
Treasury regulation ss. 301.6231(a)(7) 1T. Initially, this person shall be the
Trustee.
TAX MATTERS PERSON CERTIFICATE: The Class A-R Certificate with a
Denomination of $0.05.
THREE-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
TRANSFER: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
TRIGGER EVENT: With respect to any Distribution Date on or after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger
Event with respect to that Distribution Date.
TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(ii); (ii) the
Certificate Account, the Distribution Account, the Carryover Reserve Fund and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) the Corridor Contracts; (iv) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (v) the mortgagee's rights under any insurance policies with respect
to the Mortgage Loan; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
TRUSTEE: The Bank of New York, a New York banking corporation, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
TRUSTEE ADVANCE RATE: With respect to any Advance made by the Trustee
pursuant to Section 4.01(b), a per annum rate of interest determined as of the
date of such Advance equal to the Prime Rate in effect on such date plus 5.00%.
TRUSTEE FEE: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date.
TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.009% per annum.
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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.
UNCERTIFICATED ACCRUED INTEREST: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated Pass-Through Rate for such Distribution Date, accrued on the
Uncertificated Principal, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the Uncertificated Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution Date:
(A) The REMIC I Marker Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
Compensating Interest) incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC I Regular Interest LT-AA, REMIC
I Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC I Regular
Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I Regular Interest
LT-2A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I
Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest
LT-M5, REMIC 1 REGULAR Interest LT-M6, REMIC 1 Regular Interest LT-M7, REMIC I
Regular Interest LT-B, REMIC I Regular Interest LT-ZZ, pro rata based on, and to
the extent of, one month's interest at the then applicable respective REMIC I
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such REMIC I Regular Interest; and
(B) The REMIC I Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by Compensating Interest) incurred in respect of the Mortgage Loans for
any Distribution Date shall be allocated first, to Uncertificated Accrued
Interest payable to REMIC I Regular Interest LT-1SUB, REMIC I Regular Interest
LT-1GRP, REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest LT-2GRP and
REMIC I Regular Interest LT-XX, pro rata based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC I
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such REMIC I Regular Interest.
UNCERTIFICATED PASS-THROUGH RATE: The Uncertificated REMIC I
Pass-Through Rate.
UNCERTIFICATED PRINCIPAL BALANCE: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal Balance of each Uncertificated Regular Interest shall
be reduced by all distributions of principal made on such Uncertificated Regular
Interest, as applicable, on such Distribution Date and, if and to the extent
necessary and appropriate, shall be further reduced in such Distribution Date by
Realized Losses. The Uncertificated Principal Balance of each Uncertificated
Regular Interest shall never be less than zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-1A1, REMIC I Regular
Interest LT-1A2, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC I Regular Interest LT-
53
2A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I
Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest
LT-M5, REMIC 1 REGULAR Interest LT-M6, REMIC 1 Regular Interest LT-M7, REMIC I
Regular Interest LT-B, REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest
LT-P, REMIC I Regular Interest LT-AR, REMIC I Regular Interest LT-1SUB, REMIC I
Regular Interest LT-2SUB and REMIC I Regular Interest LT-XX, the weighted
average of the Adjusted Net Mortgage Rates of the Mortgage Loans. With respect
to REMIC I Regular Interest LT-1GRP, the weighted average of the Adjusted Net
Mortgage Rates of the Group 1 Mortgage Loans and with respect REMIC I Regular
Interest LT-2GRP, the weighted average of the Adjusted Net Mortgage Rates of the
Group 2 Mortgage Loans.
UNCERTIFICATED REGULAR INTERESTS: The REMIC I Regular Interests.
UNDERWRITER: Countrywide Securities Corporation.
UNDERWRITER'S EXEMPTION: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
UNPAID REALIZED LOSS AMOUNT: For any Class of Subordinate Certificates
or Class 1-A-2 Certificates, the portion of the aggregate Applied Realized Loss
Amount previously allocated to that Class remaining unpaid from prior
Distribution Dates, as reduced by the amount of the increase in the related
Certificate Principal Balance due to the receipt of Subsequent Recoveries.
VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificates for purposes of the voting provisions
hereunder. Voting Rights allocated to each Class of Certificates shall be
allocated 97% to the Certificates other than the Class A-R, Class C and Class P
Certificates (with the allocation among the Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class C and Class P Certificates. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans, including all interest and
principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date. The Seller
confirms that, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred to in
the preceding paragraph, the Depositor sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for benefit of the Certificateholders, without
recourse, all right title and interest in the Mortgage Loans.
The Seller further agrees to assign all of its right, title and
interest in and to the interest rate cap transactions evidenced by the
Confirmation And Agreements , and to cause all of its obligations in respect of
such transactions to be assumed by, the Trustee on behalf of the Trust Fund, on
the terms and conditions set forth in the Corridor Contract Novation Agreement.
The Depositor, the Servicer and the Trustee agree that it is not
intended that any mortgage loan be included in the Trust that is either (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 or (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004.
(b) [reserved]
(c) The Seller has entered into this Agreement in consideration
for the purchase of the Mortgage Loans by the Depositor and has agreed to take
the actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust Fund
not otherwise conveyed to the Trustee pursuant to Sections 2.01(a) or (b).
(d) [reserved]
(e) [reserved]
(f) [reserved]
55
(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):
(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 " CPT
Asset-Backed Certificates, Series 2004-EC1, by The Bank of New York, a
New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of November 1, 2004, without recourse"
(each such assignment, when duly and validly completed, to be in
recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment
relates);
(iv) the original recorded assignment or assignments of
the Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto or, in the event such original title policy has not been
received from the insurer, such original or duplicate original lender's
title policy and all riders thereto shall be delivered within one year
of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the
56
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 Servicer to, and the Servicer agrees that it will not, alter the codes
referenced in this paragraph with respect to any Mortgage Loan during the term
of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv) concurrently with the execution and delivery hereof,
the Seller shall deliver or cause to be delivered to the 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 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
57
(iii) above is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan, as evidenced by an
Opinion of Counsel, delivered by the Seller to the Trustee and a copy to the
Rating Agencies, in lieu of recording the assignment specified in clause (iii)
above, the Seller may deliver an unrecorded assignment in blank, in form
otherwise suitable for recording to the Trustee; provided that if the related
Mortgage has not been returned from the applicable public recording office, such
assignment, or any copy thereof, of the Mortgage may exclude the information to
be provided by the recording office. As to any Mortgage Loan other than a MERS
Mortgage Loan, the procedures of the preceding sentence shall be applicable only
so long as the related Mortgage File is maintained in the possession of the
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 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, after written notice of such event
and direction has been received by the the Trustee from the Seller with respect
to (ii) and (iii), 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 Servicer shall, at the Seller's
expense, cause to be submitted each previously unrecorded assignment for
recording as specified above. In the event a Mortgage File is released to the
Servicer as a result of the Servicer's having completed a Request for Release in
the form of Exhibit M, the Trustee shall complete the assignment of the related
Mortgage in the manner specified in clause (iii) of the second paragraph of this
Section 2.01.
So long as the Trustee maintains an office in the State of California,
the Trustee shall maintain possession of and not remove or attempt to remove
from the State of California any of the Mortgage Files as to which the related
Mortgaged Property is located in such State. In the event that the Seller fails
to record an assignment of a Mortgage Loan as herein provided within 90 days of
notice of an event set forth in clause (i), (ii) or (iii) of the above
paragraph, the Trustee 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 Trustee (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.
The Seller shall reimburse the Servicer and the Trustee for all costs,
fees and expenses incurred by the Servicer or the Trustee, as the case may be,
in the event that the Servicer is required to record assignments of mortgage in
the case of a forclosure or prepayment or similar circumstances or, in the case
of the Trustee, if requested to do so by the Seller.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date and the Cut-off Date, the Seller shall
deposit or cause to be deposited in the Certificate Account the amount required
to be deposited therein with respect to such payment pursuant to Section 3.05
hereof.
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Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver to the
Trustee the Mortgage File as required pursuant to this Section 2.01 for each
Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery Mortgage
Loan or (B) substitute the Delay Delivery Mortgage Loan for a Replacement
Mortgage Loan, which repurchase or substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, provided that if
the Seller fails to deliver a Mortgage File for any Delay Delivery Mortgage Loan
within the period provided in the prior sentence, the cure period provided for
in Section 2.02 or in Section 2.03 shall not apply to the initial delivery of
the Mortgage File for such Delay Delivery Mortgage Loan, but rather the Seller
shall have five (5) Business Days to cure such failure to deliver; and provided
further, that the Seller shall use its best efforts to substitute rather than
repurchase. The Seller shall promptly provide each Rating Agency with written
notice of any cure, repurchase or substitution made pursuant to the proviso of
the preceding sentence. On or before the thirtieth (30th) day (or if such
thirtieth day is not a Business Day, the succeeding Business Day) after the
Closing Date (in the case of the Mortgage Loans), the Trustee shall, in
accordance with the provisions of Section 2.02, send a Delay Delivery
Certification substantially in the form annexed hereto as Exhibit G-3 (with any
applicable exceptions noted thereon) for all Delay Delivery Mortgage Loan
delivered within thirty (30) days after such date. The Trustee will promptly
send a copy of such Delay Delivery Certification to each Rating Agency.
In the event that any Assignments of Mortgage are not recorded or are
improperly recorded, the Servicer shall have no liability for its failure to
receive or act on notices not received related to such Assignment of Mortgage.
Section 2.02 Acceptance of the Mortgage Loans.
(a) The Trustee acknowledges receipt, subject to the limitations
contained in and any exceptions noted in the Initial Certification in the form
annexed hereto as Exhibit G-1 and in the list of exceptions attached thereto, of
the documents referred to in clauses (i) and (iii) of Section 2.01(g) above with
respect to the Mortgage Loans and all other assets included in the Trust Fund
and declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Servicer and the Seller an Initial Certification substantially in
the form annexed hereto as Exhibit G-1 to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in such certification as not
covered by such certification), the documents described in Section 2.01(g)(i)
and, in the case of each Mortgage Loan that is not a MERS Mortgage Loan, the
documents described in Section 2.01(g)(iii), with respect to such Mortgage Loan
are in the Trustee's possession, and based on its review and examination and
only as to the foregoing documents, such documents appear regular on their face
and relate to such Mortgage Loan. The Trustee agrees to execute and deliver
within thirty (30) days after the Closing Date to the Depositor, the Servicer
and the Seller an Interim Certification substantially in the form annexed hereto
as Exhibit G-2 to the effect that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule
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(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), all
documents required to be delivered to the Trustee pursuant to this Agreement
with respect to such Mortgage Loan are in its possession (except those described
in Section 2.01(g)(vi)) and based on its review and examination and only as to
the foregoing documents, (i) such documents appear regular on their face and
relate to such Mortgage Loan, and (ii) the information set forth in items (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 Servicer and the Seller a Delay Delivery Certification
with respect to the Mortgage Loans substantially in the form annexed hereto as
Exhibit G-3, with any applicable exceptions noted thereon. The 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 Closing Date, the Trustee shall
deliver to the Depositor, the Servicer and the Seller (and to any
Certificateholder that so requests) a Final Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit H, with any
applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of such Final
Certification, the Trustee shall review each Mortgage File with respect to the
Mortgage Loans to determine that such Mortgage File contains the documents
listed in Section 2.01(g). If, in the course of such review, the Trustee finds
any document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) of Section 2.01(g), the
Trustee shall include such exceptions in such Final Certification (and the
Trustee shall state in such Final Certification whether any Mortgage File does
not then include the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto). If the public
recording office in which a Mortgage or assignment thereof is recorded retains
the original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) of Section 2.01(g), as applicable.
The Seller shall promptly correct or cure such defect referred to above within
90 days from the date it was so notified of such defect and, if the Seller does
not correct or cure such defect within such period, the Seller shall either (A)
if the time to cure such defect expires prior to the end of the second
anniversary of the Closing Date, substitute for the related Mortgage Loan a
Replacement Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, or (B) purchase
such Mortgage Loan from the Trust Fund within 90 days from the date the Seller
was notified of such defect in writing at the Purchase Price of such Mortgage
Loan; provided that any such substitution pursuant to (A) above or repurchase
pursuant to (B) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05 hereof and any substitution
pursuant to (A) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit N. No
substitution will be made in any calendar month after the Determination Date for
such month. The Purchase Price for any such Mortgage
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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 Trust
Fund's interest in any Mortgage Loan released pursuant hereto. If pursuant to
the foregoing provisions the Seller repurchases an Mortgage Loan that is a MERS
Mortgage Loan, the 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) [reserved]
Section 2.03 Representations, Warranties and Covenants of the Servicer
and the Seller.
(a) The Servicer hereby represents and warrants to the Depositor,
the Seller and the Trustee as follows, as of the date hereof with respect to the
Mortgage Loans:
(i) The Servicer is duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its formation
and has all licenses necessary to carry on its business as now being
conducted, except for such licenses, certificates and permits the
absence of which, individually or in the aggregate, would not have a
material adverse effect on the ability of the Servicer to conduct its
business as it is presently conducted, and is licensed, qualified and
in good standing in the states where the Mortgaged Property is located
if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Servicer or to ensure
the enforceability or validity of each Mortgage Loan; the Servicer has
the power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance
of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally; and all
requisite corporate action has been taken by the Servicer to make this
Agreement valid and binding upon the Servicer in accordance with its
terms;
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(ii) The consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Servicer
and will not result in the breach of any term or provision of the
certificate of formation or the partnership agreement of the Servicer
or result in the breach of any term or provision of, or conflict with
or constitute a default under or result in the acceleration of any
obligation under, any agreement, indenture or loan or credit agreement
or other instrument to which the Servicer or its property is subject,
or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Servicer or its property is subject;
(iii) The Servicer is an approved seller/servicer of
conventional mortgage loans for Xxxxxx Xxx, and is an FHA Approved
Mortgagee in good standing to service mortgages and has not been
suspended as a mortgagee or servicer by the FHA and has the facilities,
procedures and experienced personnel necessary for the sound servicing
of mortgage loans of the same type as the Mortgage Loans. The Servicer
is, and shall remain for as long as it is servicing the Mortgage Loans
hereunder, in good standing as a FHA Approved Mortgagee and to service
mortgage loans for HUD, Xxxxxx Xxx or Freddie Mac, and no event has
occurred, including but not limited to a change in insurance coverage,
which would make the Servicer unable to comply with HUD, Xxxxxx Xxx,
Freddie Mac or FHA eligibility requirements or which would require
notification to any of HUD, Xxxxxx Xxx, Freddie Mac or FHA;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Servicer,
constitute and will constitute valid, legal and binding obligations of
the Servicer, enforceable in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable
bankruptcy laws and general principles of equity;
(v) The Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Servicer that,
either individually or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of
the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the
part of the Servicer, or that would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein,
or that would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;
(vii) No consent, approval or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations and
orders, if any, that have been obtained;
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(viii) The 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;
(ix) Neither this Agreement nor any information,
certificate of an officer, statement furnished in writing or report
delivered to the Trustee by the Servicer in connection with the
transactions contemplated hereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading;
and
(x) The Servicer has accurately and fully reported, and
will continue to accurately and fully report, its borrower credit files
to each of the credit repositories in a timely manner.
(b) The Seller hereby represents and warrants to the Depositor,
the Servicer and the Trustee as follows, as of the Cut-off Date (unless
otherwise indicated or the context otherwise requires, percentages with respect
to the Mortgage Loans in a Loan Group are measured by the Cut-off Date Principal
Balance of the 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 to be
conducted by the Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to sell the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) The Seller has the full corporate power and authority
to sell each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on
the part of the Seller the execution, delivery and performance of this
Agreement; and this Agreement , assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under this
Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance
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with the terms hereof and thereof are in the ordinary course of
business of the Seller and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Seller or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which the Seller is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to the Seller
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Seller; and the Seller is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair the Seller's ability to perform or meet any of
its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional
mortgage loans for Xxxxxx Xxx or Freddie 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 or the ability of the Seller to sell
the Mortgage Loans or to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Seller of, or compliance by the Seller
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Seller has obtained the same.
(vii) The information set forth on Exhibit F-1 hereto with
respect to each Mortgage Loan is true and correct in all material
respects as of the Closing Date.
(viii) The Seller will treat the transfer of the Mortgage
Loans to the Depositor as a sale of the Mortgage Loans for all tax,
accounting and regulatory purposes.
(ix) None of the Mortgage Loans are more than 60 days
delinquent in payment of principal and interest.
(x) No Mortgage Loan secured by a first lien on the
related Mortgaged Property had a Loan-to-Value Ratio at origination in
excess of 100%.
(xi) Each Mortgage Loan is secured by a valid and
enforceable first or second lien on the related Mortgaged Property,
subject only to (1) the lien of non-delinquent current real property
taxes and assessments and the lien of the related first mortgage in the
case of a second lien Mortgage Loan, (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
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institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Mortgage Loan, and
(3) other matters to which like properties are commonly subject that do
not materially interfere with the benefits of the security intended to
be provided by such Mortgage.
(xii) Immediately prior to the assignment of each Mortgage
Loan to the Depositor, the Seller had good title to, and was the sole
owner of, such Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(xiii) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(xiv) There is no valid offset, claim, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(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 (xviii) below.
(xvi) As of the Closing Date, to the best of Seller's
knowledge, each Mortgaged Property is free of material damage and is in
good repair.
(xvii) As of the Closing Date neither the Seller nor any
prior holder of any Mortgage has modified the Mortgage in any material
respect (except that a Mortgage Loan may have been modified by a
written instrument that has been recorded or submitted for recordation,
if necessary, to protect the interests of the Certificateholders and
the original or a copy of which has been delivered to the Trustee);
satisfied, cancelled or subordinated such Mortgage in whole or in part;
released the related Mortgaged Property in whole or in part from the
lien of such Mortgage; or executed any instrument of release,
cancellation, modification (except as expressly permitted above) or
satisfaction with respect thereto.
(xviii) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and
effect, and each such policy was issued by a title insurer qualified to
do business in the jurisdiction where the Mortgaged Property is located
and acceptable to Xxxxxx Xxx or Freddie Mac and is in a form acceptable
to Xxxxxx Xxx or Freddie Mac, which policy insures the Seller and
successor owners of indebtedness secured by the insured Mortgage, as to
the first or second priority lien (as applicable), of the Mortgage
subject to the exceptions set forth in paragraph (iv) above and against
any loss by reason of the invalidity or
65
unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the mortgage interest rate and/or
monthly payment; 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.
(xix) No Mortgage Loan was the subject of a Principal
Prepayment in full between the Closing Date and the Cut-off Date.
(xx) 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.
(xxi) 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.
(xxii) 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.
(xxiii) 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.
(xxiv) The related Mortgage contains customary and
enforceable provisions that render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including, (i) in the case of
a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure.
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(xxv) 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.
(xxvi) Each Mortgage Note and each Mortgage is in
substantially one of the forms attached hereto as Exhibit P acceptable
in form to Xxxxxx Xxx or Freddie Mac.
(xxvii) 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.
(xxviii) The origination, underwriting, servicing and
collection practices used by the Seller with respect to each Mortgage
Loan have been in all respects legal, proper, prudent and customary in
the mortgage lending and servicing business.
(xxix) There is no pledged account or other security other
than real estate securing the Mortgagor's obligations.
(xxx) No Mortgage Loan has a shared appreciation feature,
or other contingent interest feature.
(xxxi) Each Mortgage Loan contains a customary "due on sale"
clause.
(xxxii) No more than approximately 7.14% and 3.03% of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are
secured by two-family dwellings. No more than approximately 2.41% and
none of the Mortgage Loans in Loan Group 1 and Loan Group 2,
respectively, are secured by three-family dwellings. No more than
approximately 6.52% and 6.26% of the Mortgage Loans in Loan Group 1 and
Loan Group 2, respectively, are secured by condominium units. No more
than approximately 5.23% and 7.39% of the Mortgage Loans in Loan Group
1 and Loan Group 2, respectively, are secured by planned unit
developments. No more than approximately 2.49% and 0.86% of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are
secured by attached planned unit developments. No less than
approximately 74.26% and 82.46% of the Mortgage Loans in Loan Group 1
and Loan Group 2, respectively, are secured by single family detached
dwellings. No more than approximately 0.51% and 2.12% of the Mortgage
Loans in Loan Group 1 and Loan Group 2, respectively, are second lien
Mortgage Loans.
(xxxiii) No Mortgage Loan in Loan Group 1 and Loan Group 2 had
a principal balance in excess of $592,000 and $714,000, respectively,
at origination.
(xxxiv) 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
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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;
(xxxv) Each Mortgage Loan was originated on or after May 11,
2004;
(xxxvi) Each Two-Year Hybrid Mortgage Loan had an initial
Adjustment Date no later than October 1, 2006; each Three-Year Hybrid
Mortgage Loan had an initial Adjustment Date no later than October 1,
2007; each Five-Year Hybrid Mortgage Loan had an initial Adjustment
Date no later than October 1, 2009.
(xxxvii) Approximately 73.99% and 78.01% of the Mortgage Loans
in Loan Group 1 and Loan Group 2, respectively, provide for a
prepayment charge.
(xxxviii)On the basis of representations made by the
Mortgagors in their loan applications, no less than approximately
94.89% and 97.62% of the owner-occupied Mortgage Loans in Loan Group 1
and Loan Group 2, respectively, are secured by owner-occupied Mortgaged
Properties that are primary residences.
(xxxix) 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 (xl) 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.
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(xl) 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.
(xli) 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.
(xlii) 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.
(xliii) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of the Seller's knowledge, no
Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(xliv) Each Mortgage Loan is being serviced by the Servicer,
or, if a Mortgage Loan is being serviced by or on behalf of the
originator of such Mortgage Loan, the Servicer and the originator have
agreed to transfer the servicing of such Mortgage Loan on or prior to
January 5, 2005.
(xlv) 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 Servicer to make future advances
to the Mortgagor at the option of the Mortgagor.
(xlvi) 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 Servicer has not advanced
funds, or induced, solicited or
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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.
(xlvii) The Mortgage Loans were underwritten in all material
respects in accordance with customary and prudent underwriting
guidelines generally used by originators of credit blemished quality
mortgage loans.
(xlviii) 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 Freddie Mac.
(xlix) 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.
(l) The Mortgage Rates borne by the Mortgage Loans in
Loan Group 1 as of the Cut-off Date ranged from 4.790% per annum to
12.250% per annum and the weighted average Mortgage Rate as of the
Cut-off Date was 7.319% per annum. The Mortgage Rates borne by the
Mortgage Loans in Loan Group 2 as of the Cut-off Date ranged from
4.640% per annum to 12.000% per annum and the weighted average Mortgage
Rate as of the Cut-off Date was 6.974% per annum.
(li) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Seller's
portfolio at the Closing Date, as to which the representations and
warranties made as to the Mortgage Loans set forth in this Section
2.03(b) can be made. No selection was made in a manner that would
adversely affect the interests of Certificateholders.
(lii) The Gross Margins on the Adjustable Rate Mortgage
Loans that are Mortgage Loans in Loan Group 1 range from approximately
4.950% to 9.340% and the weighted average Gross Margin was
approximately 6.312%. The Gross Margins on the Adjustable Rate Mortgage
Loans that are Mortgage Loans in Loan Group 2 range from approximately
5.150%-6.990% and the weighted average Gross Margin was approximately
6.211%.
(liii) Each Mortgage Loan has a payment date on or before
the Due Date in the month of the first Distribution Date.
(liv) The Mortgage Loans, individually and in the
aggregate, conform in all material respects to the descriptions thereof
in the Prospectus Supplement.
(lv) 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.
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(lvi) 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.
(lvii) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without regard
to the rule in Treasury Regulation ss. 1.860G 2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially
similar successor provision) and applicable Treasury regulations
promulgated thereunder.
(lviii) No Mortgage Loan was either a "consumer credit
contract" or a "purchase money loan" as such terms are defined in 16
C.F.R. Section 433 nor is any Mortgage Loan a "mortgage" as defined in
15 U.S.C. ss. 1602(aa).
(lix) The information set forth in the Prepayment Charge
Schedule with respect to each Mortgage Loan is complete, true and
correct in all material respects at the date or dates respecting which
such information is furnished and each Prepayment Charge is permissible
and enforceable in accordance with its terms under applicable law upon
the Mortgagor's full and voluntary principal prepayment (except to the
extent that: (1) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally; or (2) the collectibility
thereof may be limited due to acceleration in connection with a
foreclosure or other involuntary prepayment).
(lx) No Mortgage Loan is a "high cost home loan" as
defined in the Georgia Fair Lending Act, as amended. No Mortgage Loan
with a principal balance at origination (or modification) equal to or
less than the mortgage loan balance limit of Xxxxxx Xxx in effect at
the time of origination (or modification) and secured by
owner-occupied real property located in the State of Georgia was
originated (or modified) on or after October 1, 2002 through and
including March 6, 2003. No Mortgage Loan originated between October
1, 2002 and March 7, 2003 is secured by a Mortgaged Property located
in the state of Georgia.
(lxi) No Mortgage Loan is a "high cost home loan" as
defined in New York Banking Law 6-1.
(lxii) No Mortgage Loan is classified as (a) a high cost
mortgage loan under the Home Ownership and Equity Protection Act of
1994 or (b) a "high cost" loan under any other applicable state,
federal or local law.
(lxiii) No Mortgage Loan is a High Cost Loan or Covered Loan,
as applicable (as such terms are defined in Standard & Poor's LEVELS(R)
Glossary, Version 5.6 Revised, Appendix E, attached hereto as Exhibit
U) and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act.
(lxiv) No Mortgagor related to a Mortgage Loan was required
to purchase any single premium credit insurance policy (e.g., life,
disability, accident, unemployment, or health insurance product) or
debt cancellation agreement as a condition of obtaining the extension
of credit; no Mortgagor related to a Mortgage Loan obtained a prepaid
single-premium credit insurance policy (e.g., life, disability,
accident, unemployment, mortgage, or health insurance) in connection
with the origination of such Mortgage Loan; no proceeds from any
Mortgage Loan were used to purchase single premium credit insurance
policies or debt cancellation agreements as part of the origination
of, or as a condition to closing, such Mortgage Loan.
(lxv) No Mortgage Loan originated prior to October 1, 2002
will impose prepayment penalties for a term in excess of five years
after origination.
(lxvi) The Servicer for each Mortgage Loan has fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis.
(lxvii) With respect to each Mortgage Loan originated on or
after August 1, 2004, neither the related Mortgage or the related
Mortgage Note requires the borrower to submit to arbitration to
resolve any dispute arising out of or relating in any way to the
Mortgage Loan transaction.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) or (b), that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to the
other parties. Each of the Servicer and the Seller (each, a "Representing
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Party") hereby covenants with respect to a breach of the representations and
warranties set forth in Sections 2.03(a) and (b), that within 90 days of the
earlier of the discovery by such Representing Party or receipt of written notice
by such Representing Party from any party of a breach of any representation or
warranty set forth herein made that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects and, if such breach is not so cured, shall, (i)
if such 90 day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Replacement Mortgage Loan, in the manner and
subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided that any such substitution pursuant to
(i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof and any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit M. Any Representing Party liable for a
breach under this Section 2.03 shall promptly reimburse the Servicer and the
Trustee for any expenses reasonably incurred by the Servicer or the Trustee in
respect of enforcing the remedies for such breach. To enable the 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 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
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 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 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
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of substitution, the representations and warranties set forth in Section 2.03(b)
with respect to such Mortgage Loan. Upon any such substitution and the deposit
to the Certificate Account of the amount required to be deposited therein in
connection with such substitution as described in the following paragraph, the
Trustee shall release to the Representing Party the Mortgage File relating to
such Deleted Mortgage Loan and held for the benefit of the Certificateholders
and shall execute and deliver at the Servicer's direction such instruments of
transfer or assignment as have been prepared by the 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 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, and costs and damages incurred by the Trust Fund in connection with a
repurchase pursuant to Section 2.03 hereof that arise out of a violation of any
predatory or abusive lending law which also constitutes an actual breach of
representation (xxxiv) of Section 2.03(b) hereof. 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
Servicer and deposited by the Servicer into the Certificate Account not later
than the Determination Date for the Distribution Date relating to the Prepayment
Period during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.08 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for Release in the form of Exhibit N hereto, the 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.
Any breach of a representation set forth in clauses (liv) (to the
extent that such representation relates to the Freddie Mac's dollar amount
limits for conforming one-to-four family mortgage loans), (lvii), (lx), (lxi),
(lxii), (lxiii), (lxiv), (lxv), (lxvi) or (lxvii) of Section 2.03(b) hereof with
respect to a Mortgage Loan shall be deemed to materially and adversely affect
the Certificateholders and the Seller will substitute for or repurchase the
affected Mortgage Loan in the manner provided in this Section 2.03(c).
(d) The representations and warranties set forth in Section 2.03
hereof shall survive delivery of the respective Mortgage Files to the Trustee
for the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Seller, the
Servicer and the Trustee as follows, as of the date hereof:
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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.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the transactions
contemplated by, this Agreement and has duly authorized, by all necessary
corporate action on its part, the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, subject, as to enforceability, to (i) bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the Depositor,
the consummation of the transactions contemplated by this Agreement, and the
fulfillment of or compliance with the terms hereof and thereof are in the
ordinary course of business of the Depositor and will not (A) result in a
material breach of any term or provision of the charter or by-laws of the
Depositor or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the terms
of any other material agreement or instrument to which the Depositor is a party
or by which it may be bound or (C) constitute a material violation of any
statute, order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over the Depositor; and the Depositor is not in breach or violation of any
material indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or meet any
of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Depositor to perform its obligations under this Agreement in
accordance with the terms hereof and thereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Depositor has
obtained the same.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the Closing Date, that following the
transfer of the Mortgage Loans to it by the Seller, the Depositor had good title
to the Mortgage Loans, and the related Mortgage Notes were subject to no
offsets, claims, defenses or counterclaims.
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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 an Opinion of Counsel, addressed to the
Trustee, to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller, the Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties. In connection therewith, the
Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03(b) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
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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 Servicer.
The Servicer hereby covenants to the Depositor, the Seller and the
Trustee as follows:
(a) the 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 Servicer pursuant to this
Agreement will contain any untrue statement of a material fact or omit to state
a material fact necessary to make the information, certificate, statement or
report not misleading.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the 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 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 Servicer shall take no action that
is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor and the Trustee under this Agreement. Consistent with the terms of
this Agreement, the Servicer may waive, modify or vary any term of any Mortgage
Loan or consent to the postponement of strict compliance with any such term or
in any manner grant indulgence to any Mortgagor if in the Servicer's reasonable
and prudent determination such waiver, modification, postponement or indulgence
is not materially adverse to the Certificateholders; provided, however, that the
Servicer shall not make future advances and the Servicer shall not permit any
modification with respect to any Mortgage Loan that would cause any REMIC 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 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 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 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 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
Servicer. The 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 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
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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.
If reasonably required by the Servicer, the Trustee shall furnish the Servicer
with a power of attorney substantially in the form of Exhibit V attached hereto
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Agreement and the Trustee
shall have no liability with respect to any misuse of such power of attorney and
shall be indemnified by the Servicer for any costs, liabilities or expenses
incurred by the Trustee in connection therewith.
In accordance with the standards of the preceding paragraph, the
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 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 Servicer shall deliver a list of Servicing Officers to the Trustee
by the Closing Date.
Section 3.02 Subservicing; Enforcement of the Obligations of Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer (each, a "Subservicer") pursuant to a subservicing
agreement (each, a "Subservicing Agreement"); provided that such subservicing
arrangement and the terms of the related subservicing agreement must provide for
the servicing of such Mortgage Loans in a manner consistent with the servicing
arrangements contemplated hereunder. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer or a subservicer or reference to
actions taken through a Servicer or otherwise, the 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 Servicer alone were servicing and
administering the Mortgage Loans. Every subservicing agreement entered into by
the Servicer shall contain a provision giving the successor Servicer the option
to terminate such agreement in the event a successor Servicer is appointed. All
actions of each subservicer performed pursuant to the related subservicing
agreement shall be performed as an agent of the Servicer with the same force and
effect as if performed directly by the Servicer.
(b) For purposes of this Agreement, the 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 Servicer.
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Section 3.03 Rights of the Depositor, the Seller and the Trustee in
Respect of the Servicer.
None of the Trustee, the Seller or the Depositor shall have any
responsibility or liability for any action or failure to act by the Servicer,
and none of them is obligated to supervise the performance of the Servicer
hereunder or otherwise.
Section 3.04 Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
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
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 hereof or any acts or
omissions of the predecessor 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
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 Servicer shall for any reason no
longer be the 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 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 Servicer thereunder; and the Servicer shall not thereby be
relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession.
The Servicer shall, upon request of the Trustee, but at the expense of
the Servicer, deliver to the assuming party all documents and records relating
to each subservicing agreement and the Mortgage Loans then being serviced
thereunder and an accounting of amounts collected held by it and otherwise use
its best efforts to effect the orderly and efficient transfer of the
subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; Seller Shortfall Interest Requirement.
(a) The 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 Servicer may in its discretion (i) waive any late payment charge
or any Prepayment Charge (except as noted below) 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 Servicer shall make Advances on the
related Mortgage Loan during the scheduled period in accordance
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with the amortization schedule of such Mortgage Loan without modification
thereof by reason of such arrangements. The 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 Servicer shall establish and maintain a Certificate
Account into which the Servicer shall deposit or cause to be deposited on a
daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans before the Cut-off Date) and the following amounts required to be
deposited hereunder:
(i) all payments on account of principal, including
Principal Prepayments received, on the Mortgage Loans;
(ii) all payments on account of interest (other than
interest accrued on the Mortgage Loans and due on or prior to the
related Cut-off Date) on the Mortgage Loans net of the related
Servicing Fee permitted under Section 3.15 and Prepayment Interest
Excess;
(iii) all Insurance Proceeds, Liquidation Proceeds and
Subsequent Recoveries, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicer's normal servicing
procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(vi) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment
Amount;
(viii) all Advances made by the Servicer pursuant to Section
4.01;
(ix) the Seller Shortfall Interest Requirement;
(x) all Prepayment Charges collected; and
(xi) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Certificate Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of
prepayment penalties, late payment charges or assumption fees, if collected,
need not be remitted by the Servicer. In the event that the Servicer shall remit
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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 Servicer shall
maintain adequate records with respect to all withdrawals made pursuant to this
Section. All funds deposited in the Certificate Account shall be held in trust
for the Certificateholders until withdrawn in accordance with Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer
pursuant to the second paragraph of Section 3.08(a); and
(ii) any amount required to be deposited by the Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments.
The foregoing requirements for remittance by the Servicer and deposit
by the Trustee into the Distribution Account shall be exclusive. In the event
that the 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
Servicer.
(d) No later than 1:00 p.m. Pacific time on the Business Day prior
to the Servicer Advance Date in December 2004, the Seller shall remit to the
Servicer, and the Servicer shall deposit in the Certificate Account, the Seller
Shortfall Interest Requirement (if any) for such Servicer Advance Date.
(e) [reserved]
(f) Each institution that maintains the Certificate Account or the
Distribution Account shall invest the funds in each such account, as directed by
the Servicer, in Permitted Investments, which shall mature not later than (x) in
the case of the Certificate Account, the second Business Day next preceding the
related Distribution Account Deposit Date (except that if such Permitted
Investment is an obligation of the institution that maintains such Certificate
Account, then such Permitted Investment shall mature not later than the Business
Day next preceding such Distribution Account Deposit Date) and (y) in the case
of the Distribution Account, the Business Day immediately preceding the first
Distribution Date that follows the date of such investment (except that if such
Permitted Investment is an obligation of the
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institution that maintains such Distribution Account, then such Permitted
Investment shall mature not later than such Distribution Date), in each case,
shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. In the case of the Certificate Account and the Distribution
Account, all income and gain net of any losses realized from any such investment
shall be for the benefit of the Servicer as servicing compensation and shall be
remitted to it monthly as provided herein, 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 Servicer in the Certificate
Account or paid to the Trustee for deposit into the Distribution Account out of
the Servicer's own funds immediately as realized. Any losses incurred in the
Carryover Reserve Fund in respect of any such investments shall be charged
against amounts on deposit in the Carryover Reserve Fund (or such investments)
immediately as realized. The Trustee shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in the Certificate Account, the Distribution Account, the Carryover Reserve Fund
and made in accordance with this Section 3.05 (or in the case of the Carryover
Reserve Fund, Section 4.08).
(g) The Servicer shall give at least 30 days advance notice to the
Trustee, the Seller, each Rating Agency and the Depositor of any proposed change
of location of the Certificate Account prior to any change thereof. The Trustee
shall give at least 30 days advance notice to the Servicer, the Seller, each
Rating Agency and the Depositor of any proposed change of the location of the
Distribution Account, the Carryover Reserve Fund prior to any change thereof.
(h) The Trustee shall establish and maintain, on behalf of the
Class P Certificateholders, the Class P Distribution Account. Funds in the Class
P Distribution Account shall be held in trust for the Class P Certificateholders
for the uses and purposes set forth in this Agreement. On the Closing Date, an
amount equal to $100 shall be deposited in the Class P Distribution Account and
shall be held in trust for the Class P Certificateholders for the uses and
purposes set forth in this Agreement. Such funds may not be invested.
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the 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 Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
With respect to each first lien Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and fire, flood and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date and at a time appropriate for securing maximum
discounts allowable,
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employing for such purpose deposits of the Mortgagor in the Escrow Account which
shall have been estimated and accumulated by the Servicer in amounts sufficient
for such purposes, as allowed under the terms of the Mortgage or Applicable
Regulations. To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer (i) shall determine whether any such payments are made by the
Mortgagor in a manner and at a time that is necessary to avoid the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien and (ii) shall ensure that all insurance required to be maintained on the
Mortgaged Property pursuant to this Agreement is maintained. If any such payment
has not been made and the Servicer receives notice of a tax lien with respect to
the Mortgage Loan being imposed, the Servicer will, to the extent required to
avoid loss of the Mortgaged Property, advance or cause to be advanced funds
necessary to discharge such lien on the Mortgaged Property.
Section 3.07 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The 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 Servicer designated by it.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder or Certificate
Owner that is a savings and loan association, bank or insurance company certain
reports and reasonable access to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder or Certificate Owner
to comply with applicable regulations of the OTS or other regulatory authorities
with respect to investment in the Certificates; provided that the Servicer shall
be entitled to be reimbursed by each such Certificateholder or Certificate Owner
for actual expenses incurred by the 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 Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously paid to
or withheld by the 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 each of the Servicer and the Trustee for Advances
made by it with respect to the Mortgage Loans, such right of reimbursement
pursuant to this subclause (ii) being limited to amounts received on particular
Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and Subsequent Recoveries)
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that represent late recoveries of payments of principal and/or interest on such
particular Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to reimburse each of the Servicer and the Trustee for any
Nonrecoverable Advance previously made by it;
(iv) to reimburse the Servicer from Insurance Proceeds for
Insured Expenses covered by the related Required Insurance Policy;
(v) to pay the Servicer any unpaid Servicing Fees and to reimburse
it for any unreimbursed Servicing Advances, the 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 Subsequent
Recoveries and purchase and repurchase proceeds) that represent late recoveries
of the payments for which such advances were made pursuant to Section 3.01 or
Section 3.06;
(vi) to pay to the Seller, the Depositor or the 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;
(vii) to reimburse the Seller, the Servicer or the Depositor for
expenses incurred by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 6.03 hereof provided that such
amount shall only be withdrawn following the withdrawal from the Certificate
Account for deposit into the Distribution Account pursuant to the following
paragraph;
(viii) to withdraw pursuant to Section 3.05 any amount deposited in
the Certificate Account and not required to be deposited therein;
(ix) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof; and
(x) to pay itself as servicing compensation, any interest earned
on funds in the Certificate Account.
In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Servicer shall withdraw from the Certificate Account
and remit to the Trustee the Interest Remittance Amount and the Principal
Remittance Amount for each Loan Group for such Distribution Date to the extent
on deposit in the Certificate Account, and the Trustee shall deposit such amount
in the Distribution Account.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Certificate Account pursuant to subclauses (i), (ii), (iv), (v) and (vi)
above. Prior to making any withdrawal from the Certificate Account pursuant to
subclause (iii), the Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
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determined by the 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 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;
(iv) to reimburse the Trustee for any unreimbursed
Advances made by it pursuant to Section 4.01(b) hereof, such right of
reimbursement pursuant to this subclause (iv) being limited to (x)
amounts received on the related Mortgage Loan(s) in respect of which
any such Advance was made and (y) amounts not otherwise reimbursed to
the Trustee pursuant to Section 3.08(a)(ii) hereof;
(v) to reimburse the Trustee for any Nonrecoverable
Advance previously made by the Trustee pursuant to Section 4.01(b)
hereof, such right of reimbursement pursuant to this subclause (v)
being limited to amounts not otherwise reimbursed to the Trustee
pursuant to Section 3.08(a)(iii) hereof; and
(vi) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
(c) The Trustee shall withdraw funds from the Carryover Reserve
Fund for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount
deposited in the Carryover Reserve Fund and not required to be
deposited therein; and
(ii) to clear and terminate the Carryover Reserve Fund
upon termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 [Reserved.]
Section 3.10 Maintenance of Hazard Insurance.
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The Servicer shall cause to be maintained, for each first lien 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 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. It is understood and agreed
that no earthquake or other additional insurance is required to be maintained by
the Servicer or the Mortgagor or maintained on property acquired in respect of
the Mortgage Loan, other than pursuant to such Applicable Regulations as shall
at any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable to
the Servicer and shall provide for at least thirty days prior written notice of
any cancellation, reduction in the amount of or material change in coverage to
the Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a general policy rating of
B:VI or better in Best's Key Rating Guide and are licensed to do business in the
state wherein the property subject to the policy is located. Pursuant to Section
3.05 hereof, any amounts collected by the 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 Servicer's normal servicing procedures) shall
be deposited in the Certificate Account. Any cost incurred by the 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 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 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 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
86
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 Servicer is not required to exercise such
rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the 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 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 Servicer
enters such agreement) by the applicable Required Insurance Policies. The
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
Xxxxxxxxx and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
3.11(a) by reason of any transfer or assumption that the Servicer reasonably
believes it is restricted by law from preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the 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
Servicer in accordance with its underwriting standards as then in effect. The
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 Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Servicer as additional servicing compensation.
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Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans.
(a) The 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 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 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
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 Servicer has knowledge that a
Mortgaged Property that the 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 Servicer, the
Servicer will, prior to acquiring the Mortgaged Property, consider such risks
and only take action in accordance with its established environmental review
procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The 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 Servicer
shall either itself or through an agent selected by the 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 Servicer deems to be in the best interest of
the Servicer and the Certificateholders for the period prior to the sale of such
REO Property. The 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 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 Servicer
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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
Servicer shall request, more than 60 days prior to the day on which such
three-year period would otherwise expire, an extension of the three-year grace
period. In the event the Trustee shall have been supplied with an Opinion of
Counsel (such opinion not to be an expense of the Trustee) to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund as defined in section 860F of the Code or cause
the Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding, the Trust Fund may continue to hold such Mortgaged Property
(subject to any conditions contained in such Opinion of Counsel) after the
expiration of such three-year period. Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject the Trust Fund to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Servicer has agreed to indemnify
and hold harmless the Trust Fund with respect to the imposition of any such
taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the 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
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 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 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 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 Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii)
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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 Servicer shall determine the
respective aggregate amounts of Excess Proceeds and Realized Losses, if any, for
the related Prepayment Period.
(c) The Servicer (or an affiliate of the Servicer) may, at its
option, purchase a Mortgage Loan or REO Property which becomes ninety (90) or
more days Delinquent or for which the Servicer has accepted a deed in lieu of
foreclosure. Prior to purchase pursuant to this Section 3.12(c), the Servicer
shall be required to continue to make monthly advances pursuant to Section 4.01.
The Servicer shall purchase such (i) delinquent Mortgage Loan at a price equal
to the Principal Balance of the Mortgage Loan plus accrued interest thereon at
the Mortgage Rate from the date to which interest has last been paid to the
Trust Fund to the date of purchase plus any unreimbursed Servicing Advances and
Advances or (ii) REO Property at its fair market value, which for purposes of
this Agreement shall be the lesser of (x) the appraised value of any REO
Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer at the expense of the Servicer
and (y) the Stated Principal Balance of each Mortgage Loan related to any REO
Property plus accrued interest and reimbursement for unpaid Advances, Servicing
Advances and costs and damages incurred by the Trust Fund in connection with a
repurchase pursuant to Section 2.03 hereof that arises out of a violation of any
predatory or abusive lending law which also constitutes an actual breach of
representation (xxxiv) of Section 2.03(b) hereof . Any such purchase of a
Mortgage Loan or REO Property pursuant to this Section 3.12 shall be
accomplished by delivery to the Trustee for deposit in the Distribution Account
of the amount of the purchase price. The Trustee shall immediately effectuate
the conveyance of such delinquent Mortgage Loan or REO Property to the Servicer
to the extent necessary, including the prompt delivery of all documentation to
the Servicer.
Notwithstanding the preceding paragraph, in the event that the Servicer
or an affiliate thereof is the owner of more than 50% of a class of Certificates
which is then currently in a first loss position and such party is deemed to be
the "Primary Beneficiary" as defined in FIN 40, the Servicer (or an affiliate of
the Servicer) may, at its option, purchase a Mortgage Loan or REO Property which
becomes 120 or more days Delinquent or for which the Servicer has accepted a
deed in lieu of foreclosure, during the period commencing on the first day of
the calendar quarter succeeding the calendar quarter in which the Initial
Delinquency Date occurred with respect to such Mortgage Loan and ending on the
last Business Day of such calendar quarter. If the Servicer (or an affiliate of
the Servicer) does not exercise its purchase right with respect to a Mortgage
Loan during the period specified in the preceding sentence, such Mortgage Loan
shall thereafter again become eligible for purchase pursuant to the preceding
sentence only after the Mortgage Loan ceases to be 120 days or more Delinquent
and thereafter becomes 120 days Delinquent again. The "Initial Delinquency Date"
of a Mortgage Loan shall mean the date on which the Mortgage Loan first became
120 days Delinquent. Prior to repurchase pursuant to this Section 3.12(c), the
Servicer shall be required to continue to make monthly advances pursuant to
Section 4.01. The Servicer shall not use any procedure in selecting Mortgage
Loans to be
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repurchased which is materially adverse to the interests of the
Certificateholders. The Servicer shall purchase such (i) delinquent Mortgage
Loan at a price equal to the Principal Balance of the Mortgage Loan plus accrued
interest thereon at the Mortgage Rate from the date to which interest has last
been paid to the Trust Fund to the date of purchase plus any unreimbursed
Servicing Advances and Advances or (ii) REO Property at its fair market value.
Any such repurchase of a Mortgage Loan or REO Property pursuant to this Section
3.12(c) shall be accomplished by delivery to the Trustee for deposit in the
Distribution Account of the amount of the purchase price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan or REO
Property to the Servicer to the extent necessary, including the prompt delivery
of all documentation to the Servicer. In addition, the Servicer may write-off
any second lien Mortgage Loan that is delinquent by 180 days or more.
Section 3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the 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 Servicer, and the Trustee shall at the Servicer's direction execute
and deliver to the 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 Servicer, together with the Mortgage
Note with written evidence of cancellation thereon. The 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 Servicer. Subject to the further
limitations set forth below, the Servicer shall cause the Mortgage File or
documents so released to be returned to the Trustee when the need therefor by
the 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 Servicer.
If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property as authorized by this Agreement, the
Servicer shall deliver or cause to be delivered to the Trustee, for signature,
as appropriate, any court pleadings, requests for trustee's sale or other
documents necessary to effectuate such foreclosure or any legal action brought
to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage or
to obtain a deficiency judgment or to enforce any other remedies or rights
provided by the Mortgage Note or the Mortgage or otherwise available at law or
in equity. Notwithstanding the foregoing, the
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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 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
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 Servicer to
be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the 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
Servicer from time to time and shall account fully to the Trustee for any funds
received by the Servicer or that otherwise are collected by the Servicer as
Liquidation Proceeds, Subsequent Recoveries or Insurance Proceeds in respect of
any Mortgage Loan. All Mortgage Files and funds collected or held by, or under
the control of, the 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 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 Servicer also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are deposited
in the Certificate Account, Distribution Account or Carryover Reserve Fund or in
any Escrow Account (as defined in Section 3.06), or any funds that otherwise are
or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Certificate Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan for the period covered by such interest payment.
Additional servicing compensation in the form of Excess Proceeds,
assumption fees, late payment charges, Prepayment Interest Excess, and customary
real estate referral fees and all income and gain net of any losses realized
from Permitted Investments shall be retained by the Servicer to the extent not
required to be deposited in the Certificate Account pursuant to Section
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3.05 or 3.12(a) hereof. The 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 Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates or Certificate
Owners and the examiners and supervisory agents of the OTS, the FDIC and such
other authorities, access to the documentation regarding the Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices of the Servicer designated by it.
Nothing in this Section shall limit the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
The Servicer acknowledges that as part of its servicing activities,
the Servicer shall fully furnish, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.
favorable and unfavorable) on its borrower credit files related to the Mortgage
Loans to Equifax, Experian and Trans Union Credit Information Company (three of
the nationally recognized credit bureaus) on a monthly basis.
Section 3.17 Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor and the Trustee on or
before March 15 of each calendar year, commencing in 2005, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of the
performance of the 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 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 Servicer's
expense, provided such statement is delivered by the Servicer to the Trustee.
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before March 15 of each calendar year, commencing in 2005, the
Servicer at its expense shall cause a nationally recognized firm of independent
public accountants (who may also render other services to the Servicer, the
Seller or any affiliate thereof) that is a member of the American Institute of
Certified Public Accountants to furnish a report to the Trustee, Depositor and
the Seller in compliance with the Uniform Single Attestation Program for
Mortgage Bankers. Copies of such report shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided such report
is delivered by the
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Servicer to the Trustee. Upon written request, the Servicer shall provide to the
Certificateholders its publicly available annual financial statements, if any,
promptly after they become available.
Section 3.19 The Corridor Contracts.
The Seller shall assign all of its right, title and interest in and to
the interest rate cap transactions evidenced by the Corridor Contracts 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 Corridor Contract Novation Agreement. The Corridor Contracts will
be assets of the Trust Fund but will not be assets of any REMIC. The Servicer,
on behalf of the Trustee, shall deposit any amounts received from time to time
with respect to the Corridor Contracts into the Carryover Reserve Fund. The
parties hereto acknowledge and agree that the Trustee is directed and authorized
by the Depositor to sign the Corridor Contract Novation Agreement and shall be
fully protected in relying thereon. The representations made by the Bank of New
York as Assignee under the Corridor Contract Novation Agreement are made by the
Trustee on behalf of, and solely as Trustee (and not in its individual capacity)
for the Trust Fund. The representations made by the Bank of New York as Assignee
under the Corridor Contract Novation Agreement are made by the Trustee on behalf
of, and solely as Trustee (and not in its individual capacity) for the Trust
Fund.
The Seller shall prepare and deliver any notices required to be
delivered under the Corridor Contracts.
The Seller shall act as calculation agent and/or shall terminate the
Corridor Contracts, in each case upon the occurrence of certain events of
default or termination events to the extent specified thereunder. Upon any such
termination, the Corridor Contract Counterparty will be obligated to pay the
Trustee or the Servicer for the benefit of the Trust Fund an amount in respect
of such termination. Any amounts received by the Trustee or the Servicer for the
benefit of the Trust Fund, as the case may be, in respect of such termination
shall be deposited and held in the Carryover Reserve Fund to pay Net Rate
Carryover for the applicable Certificates (by deposit of the amount of any such
Net Rate Carryover in the Carryover Reserve Fund for payment to the related
Certificateholders) as provided in Section 4.04(a) on Distribution Dates
following such termination to and including the Cap Contract Termination Date.
On the related Corridor Contract Termination Date, after all other distributions
on such date, if any such amounts in respect of early termination remain in the
Carryover Reserve Fund, such amounts shall be distributed by the Trustee to the
Class C Certificateholder.
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may
not 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, (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
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prohibited by applicable law or (iii) the Servicer has not been provided with
information sufficient to enable it to collect the Prepayment Charge. If the
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 Servicer, other than as provided above, the Servicer shall
deliver to the Trustee, together with the Principal Prepayment in full or in
part, the amount of such Prepayment Charge (or such portion thereof as had been
waived) for deposit into the Certificate Account (not later than the immediately
succeeding Servicer Advance Date, in the case of such Prepayment Charge) for
distribution in accordance with the terms of this Agreement.
(b) Upon discovery by the Servicer or a Responsible Officer of the
Trustee of a breach of the foregoing subsection (a), the party discovering the
breach shall give prompt written notice to the other parties.
(c) The Seller represents and warrants to the Depositor and the
Trustee, as of the Closing Date, that the information in the Prepayment Charge
Schedule (including the attached prepayment charge summary) is complete and
accurate in all material respects at the dates as of which the information is
furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms under applicable state law, except as the
enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.
(d) Upon discovery by the Seller, the Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing clause (c) that materially
and adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties. Within 60 days of the earlier of discovery by the
Seller or receipt of notice by the Seller of breach, the Seller shall cure the
breach in all material respects or shall pay into the Certificate Account the
amount of the Prepayment Charge that would otherwise be due from the Mortgagor,
less any amount representing such Prepayment Charge previously collected and
paid by the Servicer into the Certificate Account.
Section 3.21 Advance Facility
(a) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the documentation
for which complies with Section 3.21(e) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an
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Advance Financing Person agrees to fund Advances and/or Servicing Advances, (A)
the Servicer (i) shall remain obligated pursuant to this Agreement to make
Advances and/or Servicing Advances pursuant to and as required by this Agreement
and (ii) shall not be relieved of such obligations by virtue of such Advance
Facility and (B) neither the Advance Financing Person nor any Servicer's
Assignee (as hereinafter defined) shall have any right to proceed against or
otherwise contact any Mortgagor for the purpose of collecting any payment that
may be due with respect to any related Mortgage Loan or enforcing any covenant
of such Mortgagor under the related Mortgage Loan documents.
(b) If the Servicer enters into an Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee at the
address set forth in Section 10.07 hereof a written notice (an "Advance Facility
Notice"), stating (a) the identity of the Advance Financing Person and (b) the
identity of the Person (the "Servicer's Assignee") that will, subject to Section
3.21(c) hereof, have the right to make withdrawals from the Certificate Account
pursuant to Section 3.08 hereof to reimburse previously unreimbursed Advances
and/or Servicing Advances ("Advance Reimbursement Amounts"). Advance
Reimbursement Amounts (i) shall consist solely of amounts in respect of Advances
and/or Servicing Advances for which the Servicer would be permitted to reimburse
itself in accordance with Section 3.08 hereof, assuming the Servicer had made
the related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of
amounts payable to a successor Servicer in accordance with Section 3.08 hereof
to the extent permitted under Section 3.21(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person, shall be entitled to
receive reimbursements of Advances and/or Servicing Advances in accordance with
Section 3.08 hereof, which entitlement may be terminated by the Advance
Financing Person pursuant to a written notice to the Trustee in the manner set
forth in Section 10.07 hereof. Upon receipt of such written notice, the Servicer
shall no longer be entitled to receive reimbursement for any Advance
Reimbursement Amounts and the Servicer's Assignee shall immediately have the
right to receive from the Certificate Account all Advance Reimbursement Amounts.
Notwithstanding the foregoing, and for the avoidance of doubt, (i) the Servicer
and/or the Servicer's Assignee shall only be entitled to reimbursement of
Advance Reimbursement Amounts hereunder pursuant to Section 3.08 of this
Agreement and shall not otherwise be entitled to make withdrawals of, or
receive, Advance Reimbursement Amounts that shall be deposited in the
Distribution Account pursuant to Section 3.05 hereof, and (ii) none of the
Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer or
Servicer's Assignee, as applicable, shall be entitled pursuant to Section 3.08
hereof. An Advance Facility may be terminated by the joint written direction of
the Servicer and the related Advance Financing Person. Written notice of such
termination shall be delivered to the Trustee in the manner set forth in Section
10.07 hereof. The Trustee shall have no duty or liability with respect to the
calculation of any Advance Reimbursement Amount and shall be entitled to rely
without independent investigation on the Advance Facility Notice and on such
Servicer's report of the amount of Advance Reimbursement Amounts and Servicing
Advance Reimbursement Amounts that were included in the remittance from such
Servicer to the Trustee pursuant to Section 4.01. Such Servicer shall maintain
and provide to any successor Servicer a detailed accounting on a loan-by-loan
basis as to amounts advanced by, pledged or assigned to, and reimbursed to any
Advance Financing Person. The successor Servicer shall be entitled to rely on
any such
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information provided by the predecessor Servicer, and the successor Servicer
shall not be liable for any errors in such information.
(d) [Reserved].
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which a Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an Advance Reimbursement Amount related to
Advances and/or Servicing Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person in error, then such
Servicer's Assignee shall be required to remit any portion of such Advance
Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement Amount. Without limiting the generality of the foregoing, the
Servicer shall remain entitled to be reimbursed by the Advance Financing Person
for all Advances and/or Servicing Advances funded by the Servicer to the extent
the related Advance Reimbursement Amounts have not been assigned or pledged to
such Advance Financing Person or Servicer's Assignee.
(f) For purposes of any certification of the Servicer made
pursuant to Section 4.01(b), any Nonrecoverable Advance referred to therein may
have been made by the Servicer or any predecessor Servicer. In making its
determination that any Advance or Servicing Advance theretofore made has become
a Nonrecoverable Advance, the Servicer shall apply the same criteria in making
such determination regardless of whether such Advance or Servicing Advance shall
have been made by the Servicer or any predecessor Servicer.
The Trustee shall not, as a result of the existence of any Advance Facility,
have any additional responsibility to track or monitor Advance Reimbursement
Amounts or any Advance Facility, and, except as expressly provided in Section
3.21(c) above, is not and shall not be obligated to make any payment with
respect to any Advance Reimbursement Amount. The Servicer hereby indemnifies the
Trustee, the Trust Fund and any successor Servicer, as applicable, from and
against any claims, losses, liabilities or damages resulting from any claim by
the related Advancing Person, except to the extent that such claim, loss,
liability or damage resulted from or arose out of negligence, recklessness or
willful misconduct on the part of the Trustee or the successor Servicer, or
failure by the successor Servicer or the Trustee to remit funds as required by
this Agreement or the commission of an act or omission to act by the successor
Servicer or the Trustee, and the passage of any applicable cure or grace period,
such that an Event of Termination under this Agreement occurs or such entity is
subject to termination for cause under this Agreement.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.
(a) The Servicer shall determine on or before each Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Servicer determines it is required to make an
Advance, it shall, on or before the Servicer Advance Date, either (i) deposit
into the Certificate Account an amount equal to the Advance or (ii) make an
appropriate entry in its records relating to the Certificate Account that any
Amount Held for Future Distribution has been used by the Servicer in discharge
of its obligation to make any such Advance. Any funds so applied shall be
replaced by the Servicer by deposit in the Certificate Account no later than the
close of business on the next Servicer Advance Date. The 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 if
such Mortgage Loan has been foreclosed or otherwise terminated and the related
Mortgaged Property has not been liquidated. The Servicer will not make Advances
of principal on any second lien Mortgage Loans or REO Properties.
(b) If the Servicer determines that it will be unable to comply
with its obligation to make the Advances as and when described in the second
sentence of Section 4.01(a), it shall use its best efforts to give written
notice thereof to the Trustee (each such notice a "Trustee Advance Notice"; and
such notice may be given by telecopy), not later than 3:00 P.M., New York time,
on the Business Day immediately preceding the related Servicer Advance Date,
specifying the amount that it will be unable to deposit (each such amount an
"Advance Deficiency") and certifying that such Advance Deficiency constitutes an
Advance hereunder and is not a Nonrecoverable Advance. If the Trustee receives a
Trustee Advance Notice on or before 3:30 P.M., New York time on a Servicer
Advance Date, the Trustee shall, not later than 3:00 P.M., New York time, on the
related Distribution Date, deposit in the Distribution Account an amount equal
to the Advance Deficiency identified in such Trustee Advance Notice unless it is
prohibited from so doing by applicable law. Notwithstanding the foregoing, the
Trustee shall not be required to make such deposit if the Trustee shall have
received written notification from the Servicer that the Servicer has deposited
or caused to be deposited in the Certificate Account an amount equal to such
Advance Deficiency. All Advances made by the Trustee pursuant to this Section
4.01(b) shall accrue interest on behalf of the Trustee at the Trustee Advance
Rate from and including the date such Advances are made to but excluding the
date of repayment, with such interest being an obligation of the Servicer and
not the Trust Fund. The Servicer shall reimburse the Trustee for the amount of
any Advance made by the Trustee pursuant to this Section 4.01(b) together with
accrued interest, not later than 6:00 P.M., New York time on the Business Day
following the related Distribution Date. In the event that the Servicer does not
reimburse the Trustee in accordance with the requirements of the preceding
sentence, the Trustee shall immediately (a) terminate all of the rights and
obligations of the Servicer under this
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Agreement in accordance with Section 7.01 and (b) subject to the limitations set
forth in Section 3.04, assume all of the rights and obligations of the Servicer
hereunder.
(c) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.01(d), (i) the aggregate
amount of monthly payments (net of the related Servicing Fee and other than the
portion of such payment representing principal on any second lien Mortgage
Loan), due during the related Due Period in respect of the Mortgage Loans, which
payments were delinquent on a contractual basis as of the close of business on
the related Determination Date and (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Prepayment Period and
as to which such REO Property an REO Disposition did not occur during the
related Prepayment Period, an amount equal to the excess, if any, of only the
interest portion of the monthly payments (net of the related Servicing Fee) that
would have been due on the related Due Date in respect of the related Mortgage
Loans, over the net income from such REO Property deposited in the Certificate
Account for distribution on such Distribution Date. For purposes of the
preceding sentence, the monthly payment on each Balloon Mortgage Loan with a
delinquent Balloon Payment is equal to the assumed monthly payment that would
have been due on the related Due Date based on the original principal
amortization schedule for the such Balloon Mortgage Loan.
(d) On or before the close of business New York time on the
Distribution Account Deposit Date, the Servicer shall remit in immediately
available funds to the Trustee for deposit in the Distribution Account an amount
equal to the aggregate amount of Advances, if any, to be made in respect of the
Mortgage Loans and REO Properties for the related Distribution Date either (i)
from its own funds or (ii) from the Certificate Account, to the extent of funds
held therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of the Certificate Account that amounts held
for future distribution have been, as permitted by this Section 4.01, used by
the Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Servicer with respect to the Mortgage Loans and REO Properties. Any
amounts held for future distribution and so used shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Certificate Account on or before any future Distribution Account Deposit
Date to the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Distribution Account
Deposit Date) shall be less than the total amount that would be distributed to
the Classes of Certificateholders pursuant to Section 4.04 on such Distribution
Date if such amounts held for future distributions had not been so used to make
Advances. The Trustee will provide notice to the Servicer by telecopy by the
close of business on any Distribution Account Deposit Date in the event that the
amount remitted by the Servicer to the Trustee on such date is less than the
Advances required to be made by the Servicer for the related Distribution Date,
as set forth in the related report to the Trustee.
(e) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(e) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until the earlier of such time as such Mortgage Loan is paid in full by
the Mortgagor or disposed of by the Trust, or until the recovery of all
Liquidation Proceeds thereon.
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(f) The Servicer, not later than the close of business on the
fifth Business Day immediately preceding each Distribution Date, shall deliver
to the Trustee a report (in the form and substance reasonably satisfactory to
the Trustee) that indicates (i) the Mortgage Loans with respect to which the
Servicer has determined that the related Scheduled Payments should be advanced
and (ii) the amount of the related Scheduled Payments. The Servicer shall
deliver to the Trustee on the related Servicer Advance Date an Officer's
Certificate of a Servicing Officer indicating the amount of any proposed Advance
determined by the Servicer to be a Nonrecoverable Advance.
(g) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance would, if made, constitute a Nonrecoverable Advance. The determination
by the Servicer that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officers' Certificate of the Servicer delivered to the Depositor and the
Trustee.
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 resulting from a Principal Prepayment in full, the Servicer
shall deposit into the Certificate Account an amount equal to the Compensating
Interest for such Distribution Date, no later than the close of business on the
Business Day immediately preceding such Distribution Date, and in case of such
deposit, the Servicer shall not be entitled to any recovery or reimbursement
from the Depositor, the Trustee, 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, until such Interest Funds have been
fully disbursed:
(i) concurrently
(A) from the Interest Funds for Loan Group 1
(and after the distribution of Interest Funds from Loan Group
2 as provided in clause (B) below, from Interest Funds for
Loan Group 2), to each Class of the Class 1-A Certificates,
pro rata, based on their respective entitlements, the Current
Interest and any Interest Carry Forward Amount for such Class,
and
(B) from the Interest Funds for Loan Group 2
(and after the distribution of Interest Funds from Loan Group
1 as provided in clause (A) above, from Interest Funds for
Loan Group 1), to each Class of the Class 2-A Certificates,
pro rata, based on their respective entitlements, the Current
Interest and any Interest Carry Forward Amount for such Class;
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(ii) from the Interest Funds for both Loan Groups to the
Class M-1 Certificates, the Class M-1 Current Interest;
(iii) from the Interest Funds for both Loan Groups to the
Class M-2 Certificates, the Class M-2 Current Interest;
(iv) from the Interest Funds for both Loan Groups to the
Class M-3 Certificates, the Class M-3 Current Interest;
(v) from the Interest Funds for both Loan Groups to the
Class M-4 Certificates, the Class M-4 Current Interest;
(vi) from the Interest Funds for both Loan Groups to the
Class M-5 Certificates, the Class M-5 Current Interest;
(vii) from the Interest Funds for both Loan Groups to the
Class M-6 Certificates, the Class M-6 Current Interest;
(viii) from the Interest Funds for both Loan Groups to the
Class M-7 Certificates, the Class M-7 Current Interest;
(ix) from the Interest Funds for both Loan Groups to the
Class B Certificates, the Class B Current Interest; and
(x) any remainder, as part of the Excess Cashflow.
(b) On each Distribution Date on or prior to the related Corridor
Contract Termination Date, amounts received in respect of the Corridor Contracts
for such Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each applicable Class of Certificates (other than the Class A-R
Certificates and Class P Certificates) pursuant to Section 4.04(e)(iv);
provided, however, that if the Corridor Contracts are subject to early
termination, early termination payments shall be held by the Trustee until the
related Corridor Contract Termination Date and deposited in the Carryover
Reserve Fund, as necessary, to pay any Net Rate Carryover as provided in Section
3.19.
(c) Upon the earlier of (a) the exercise of the Optional
Termination by the Servicer pursuant to Section 9.01 and (b) the Class P
Principal Distribution Date, all funds on deposit in the Class P Distribution
Account shall be distributed the Class P Certificates.
(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
until such Principal Distribution Amount has been fully distributed:
(i) with respect to any Distribution Date prior to the
Stepdown Date or as to which a Trigger Event is in effect:
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(A) concurrently, (i) from the Principal
Distribution Amount for Loan Group 1, sequentially, (a) to the
Class A-R Certificates until the Certificate Principal Balance
thereof is reduced to zero and, (b) pro rata, to the Class
1-A-1 Certificates and Class 1-A-2 Certificates, until the
Certificate Principal Balance of each such Class is reduced to
zero; provided, however, that if a Group 1 Sequential Trigger
Event is in effect, the distribution in this clause (b) will
be sequential to the Class 1-A-1 Certificates and Class 1-A-2
Certificates, in that order, until the Certificate Principal
Balance of each such Class is reduced to zero and (ii) from
the Principal Distribution Amount for Loan Group 2,
sequentially, to the Class 2-A-1, Class 2-A-2, and Class 2-A-3
Certificates, in that order, until the Certificate Principal
Balance of each such Class is reduced to zero; provided,
however, that if (i) the aggregate Certificate Principal
Balance of the Senior Certificates is greater than the
aggregate Stated Principal Balance of the Mortgage Loans and
(ii) the aggregate Certificate Principal Balance of the Class
2-A Certificates is greater than the Stated Principal Balance
of the Mortgage Loans in Loan Group 2, the distributions on
the Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates will
be made concurrently on a pro rata basis; provided, further,
however, that (x) after the Certificate Principal Balances of
the Class 1-A Certificates have been reduced to zero, the
Principal Distribution Amount remaining from both Loan Groups
will be applied to the Class 2-A-1, Class 2-A-2, and Class
2-A-3 Certificates, on a pro rata basis, until the Certificate
Principal Balance of each such Class is reduced to zero and
(y) after the Certificate Principal Balances of the Class 2-A
Certificates have been reduced to zero, the Principal
Distribution Amount remaining from both Loan Groups will be
applied to the Class 1-A-1 Certificates and Class 1-A-2
Certificates, on a pro rata basis, until the Certificate
Principal Balance of each such Class is reduced to zero;
provided, however, that if a Group 1 Sequential Trigger Event
is in effect, the distribution in this clause (y) will be
sequential to the Class 1-A-1 Certificates and Class 1-A-2
Certificates, in that order, until the Certificate Principal
Balance of each such Class is reduced to zero;
(B) the remaining Principal Distribution Amount
for both Loan Groups, to the Class 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 M-3 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(E) the remaining Principal Distribution Amount
for both Loan Groups, to the Class M-4 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
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(F) the remaining Principal Distribution Amount
for both Loan Groups, to the Class M-5 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(G) the remaining Principal Distribution Amount
for both Loan Groups, to the Class M-6 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(H) the remaining Principal Distribution Amount
for both Loan Groups, to the Class M-7 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(I) the remaining Principal Distribution Amount
for both Loan Groups, to the Class B Certificates, until the
Certificate Principal Balance thereof is reduced to zero; and
(J) 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) concurrently, (i) the Class 1-A Principal
Distribution Amount will be distributed to the Class 1-A-1
Certificates and Class 1-A-2 Certificates, pro rata, until the
Certificate Principal Balance of each such Class is reduced to
zero; provided, however, that if a Group 1 Sequential Trigger
Event is in effect, the distribution in this clause (i) will
be sequential to the Class 1-A-1 Certificates and Class 1-A-2
Certificates, in that order, until the Certificate Principal
Balance of each such Class is reduced to zero and (ii) the
Class 2-A Principal Distribution Amount will be distributed
sequentially, to the Class 2-A-1, Class 2-A-2, and Class 2-A-3
Certificates, in that order, until the Certificate Principal
Balance of each such Class is reduced to zero; provided,
however, that if (i) the aggregate Certificate Principal
Balance of the Senior Certificates is greater than the
aggregate Stated Principal Balance of the Mortgage Loans and
(ii) the aggregate Certificate Principal Balance of the Class
2-A Certificates is greater than the Stated Principal Balance
of the Mortgage Loans in Loan Group 2, the distributions on
the Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates will
be made concurrently on a pro rata basis; provided, further
however, that (x) after the Certificate Principal Balances of
the Class 1-A Certificates have been reduced to zero, the
remaining Class 1-A Principal Distribution Amount will be
applied to the Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates concurrently, on a pro rata basis after giving
effect to payments made pursuant to clause (A)(ii) above,
until the Certificate Principal Balance of each such Class is
reduced to zero and (y) after the Certificate Principal
Balances of the Class 2-A Certificates have been reduced to
zero, the remaining Class 2-A Principal Distribution Amount
will be applied to the Class 1-A-1 Certificates and Class
1-A-2 Certificates concurrently, on a pro rata basis after
giving effect to payments made pursuant to clause (A)(i)
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above, until the Certificate Principal Balance of each such
Class is reduced to zero;
(B) to the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(C) to the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(D) to the Class M-3 Certificates, the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(E) to the Class M-4 Certificates, the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(F) to the Class M-5 Certificates, the Class M-5
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(G) to the Class M-6 Certificates, the Class M-6
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(H) to the Class M-7 Certificates, the Class M-7
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(I) to the Class B Certificates, the Class B
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero; and
(J) any remainder, as part of the Excess
Cashflow.
(e) With respect to any Distribution Date, any Excess Cashflow and
each Corridor Contract Payment Amount will be paid to the Classes of
Certificates, after payment of the Seller Shortfall Interest Requirement, if
any, as follows:
(i) from Excess Cashflow from both Loan Groups, to the
holders of the Class or Classes of Offered Certificates (other than the
Class A-R Certificates) then entitled to receive distributions in
respect of principal, in an amount equal to the Extra Principal
Distribution Amount, payable to such holders as part of the Principal
Distribution Amount pursuant to Section 4.04(d) above
(ii) from any remaining Excess Cashflow from both Loan
Groups, sequentially to the holders of the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class B
Certificates, in that order, in an amount equal to any Interest Carry
Forward Amount for each such Class;
(iii) from any remaining Excess Cashflow from both Loan
Groups, sequentially to the holders of the Class 1-A-2, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and
Class B Certificates, in that order, in an amount equal to the Unpaid
Realized Loss Amounts for each such Class;
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(iv) (a) from the Class 1-A Corridor Contract Payment
Amount, to the Class 1-A-1 Certificates and Class 1-A-2 Certificates,
on a pro rata basis, based on the Certificate Principal Balances
thereof, to the extent needed to pay any related Net Rate Carryover for
each such Class; provided that any Class 1-A Corridor Contract Payment
Amount remaining after such allocation to pay Net Rate Carryover based
on the Certificate Principal Balances of these Certificates will be
distributed to each such Class of Certificates with respect to which
there remains any unpaid Net Rate Carryover (after the distribution
based on Certificate Principal Balances), pro rata, based on the amount
of such unpaid Net Rate Carryover, until reduced to zero, (b) from the
Class 2-A Corridor Contract Payment Amount, to the Class 2-A-1, Class
2-A-2, and Class 2-A-3 Certificates, on a pro rata basis, based on the
Certificate Principal Balances thereof, to the extent needed to pay any
related Net Rate Carryover for each such Class; provided that any Class
2-A Corridor Contract Payment Amount remaining after such allocation to
pay Net Rate Carryover based on the Certificate Principal Balances of
these Certificates will be distributed to each such Class of
Certificates with respect to which there remains any unpaid Net Rate
Carryover (after the distribution based on Certificate Principal
Balances), pro rata, based on the amount of such unpaid Net Rate
Carryover, until reduced to zero, and (c) from the Subordinated
Corridor Contract Payment Amount, to the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class B
Certificates, on a pro rata basis, based on the Certificate Principal
Balances thereof, to the extent needed to pay any related Net Rate
Carryover for each such Class; provided that any Subordinated Corridor
Contract Payment Amount remaining after such allocation to pay Net Rate
Carryover based on the Certificate Principal Balances of these
Certificates will be distributed to each such Class of Certificates
with respect to which there remains any unpaid Net Rate Carryover
(after the distribution based on Certificate Principal Balances), pro
rata, based on the amount of such unpaid Net Rate Carryover, until
reduced to zero;
(v) from any remaining Excess Cashflow from both Loan
Groups and any remaining Corridor Contract Payment Amounts as provided
in clause (iv) above, to the Class 1-A-1, Class 1-A-2, Class 2-A-1,
Class 2-A-2, Class 2-A-3, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7 and Class B Certificates, on a pro rata
basis, based on the Certificate Principal Balances thereof, to the
extent needed to pay any remaining Net Rate Carryover for each such
Class; provided that any amounts remaining after such allocation to pay
Net Rate Carryover based on the Certificate Principal Balances of these
Certificates will be distributed to each such Class of Certificates
with respect to which there remains any unpaid Net Rate Carryover
(after the distribution based on Certificate Principal Balances), pro
rata, based on the amount of such unpaid Net Rate Carryover, until
reduced to zero
(vi) from any remaining Excess Cashflow from both Loan
Groups, to the Class C Certificates, (x) the Current Interest for such
Class and (y) any remaining Excess Cashflow shall be paid to the Class
C Certificates;
(vii) from any remaining Excess Cashflow from both Loan
Groups and any remaining Corridor Contract Payment Amount, if (x) the
related Corridor Contract has
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not been terminated or (y) on any Distribution Date on or after the
related Corridor Contract Termination Date, to the Class C
Certificates; and
(viii) any remaining Excess Cashflow from both Loan Groups,
to the Class A-R Certificates.
(f) On each Distribution Date, all Prepayment Charges (including
amounts deposited in connection with the full or partial waiver of such
Prepayment Charges pursuant to Section 3.20) shall be distributed to the Class P
Certificates.
(g) To the extent that a Class of Certificates (other than the
Class A-R, Class C and Class P Certificates) receives interest in excess of the
Net Rate Cap, such interest shall be treated as having been paid to the
Carryover Reserve Fund and then paid by the Carryover Reserve Fund to such
Certificateholders.
(h) [reserved]
(i) On each Distribution Date, the Trustee shall allocate the
Applied Realized Loss Amount to reduce the Certificate Principal Balances of the
Subordinate Certificates and Class 1-A-2 Certificates in the following order of
priority:
(i) to the Class B Certificates until the Class B
Certificate Principal Balance is reduced to zero;
(ii) to the Class M-7 Certificates until the Class M-7
Certificate Principal Balance is reduced to zero;
(iii) to the Class M-6 Certificates until the Class M-6
Certificate Principal Balance is reduced to zero;
(iv) to the Class M-5 Certificates until the Class M-5
Certificate Principal Balance is reduced to zero;
(v) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero;
(vi) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(vii) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero;
(viii) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero; and
(ix) with respect to Realized Losses on the Mortgage Loans
in Loan Group 1 only, to the Class 1-A-2 Certificates until the Class
1-A-2 Certificate Principal Balance is reduced to zero.
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(j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least 5 Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with aggregate
principal denominations of not less than $1,000,000 or evidencing a Percentage
Interest aggregating 10% or more with respect to such Class or, if not, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
No later than the close of business on the fifth Business Day before
the related Distribution Date, the Servicer shall deliver a report to the
Trustee in the form of a computer readable magnetic tape (or by such other means
as the Servicer and the Trustee may agree from time to time) containing such
data and information as agreed to by the Servicer and the Trustee such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and
make the required distributions for the related Distribution Date (the
"Remittance Report"). The information contained in this report may be
consolidated with the information contained in the report to be delivered by the
Servicer pursuant to Section 4.01(f) hereof. The Trustee shall not be
responsible to recompute, recalculate or verify information provided to it by
the Servicer and shall be permitted to conclusively rely on any information
provided to it by the 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 Servicer, the Seller and the Depositor a
statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of
each Class allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein and (B)
the aggregate of all scheduled payments of principal included therein;
(ii) the amount of such distribution to Holders of each
Class allocable to interest;
(iii) any Interest Carry Forward Amount for each Class;
(iv) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss
Amounts for such Distribution Date;
(v) the aggregate of the Stated Principal Balances of the
Mortgage Loans for the Mortgage Pool and each Loan Group;
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(vi) the related amount of the Servicing Fees paid to or
retained by the Servicer for the related Due Period;
(vii) the Pass-Through Rate for each Class of Certificates
with respect to the current Accrual Period;
(viii) with respect to the December 2004 Distribution Date,
the Seller Shortfall Interest Requirement (if any) for the related
Servicer Advance Date;
(ix) the amount of Advances for each Loan Group included
in the distribution on such Distribution Date;
(x) the cumulative amount of Applied Realized Loss
Amounts to date;
(xi) [reserved];
(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 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) whether a Trigger Event is in effect;
(xviii) any Net Rate Carryover paid on each Class of
Certificates (other than the Class A-R, Class C and Class P
Certificates) and any remaining Net Rate Carryover remaining on each
Class of Certificates (other than the Class A-R, Class C and Class P
Certificates) on such Distribution Date;
(xix) the amount of Prepayment Charges collected or waived
by the Servicer;
(xx) [reserved];
(xxi) [reserved]; and
108
(xxii) the amount, if any, due, and the amount received
under each Cap Contract for such Distribution Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the 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.xxxxxxxxxxxxxxxxxxxx.xxx.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee
shall furnish to the Holders of the Class A-R Certificates the Form 1066 and
each Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class A-R Certificates with respect
to the following matters:
(i) The original projected principal and interest cash
flows on the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The projected remaining principal and interest cash
flows as of the end of any calendar quarter with respect to each
related Class of regular and residual interests created hereunder and
the Mortgage Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with 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
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(vii) Any taxes (including penalties and interest) imposed
on the related REMIC, including, without limitation, taxes on
"prohibited transactions," "contributions" or "net income from
foreclosure property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 [Reserved]
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain
in its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund. The Carryover Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement.
(b) The Trustee shall make withdrawals from the Carryover Reserve
Fund to make distributions of amounts payable from each Corridor Contract to the
related Certificates pursuant to paragraph (e) of Section 4.04 hereof. Any
amounts remaining after the distributions required pursuant to preceding
sentence shall be distributed to the Class C Certificates; provided, however,
that if a Corridor Contract is subject to early termination, early termination
payments received on such Corridor Contract will be held by the Trustee until
the related Corridor Contract Termination Date and deposited in the Carryover
Reserve Fund as necessary to cover any Net Rate Carryover on the Certificates
entitled thereto on future Distribution Dates.
(c) Funds in the Carryover Reserve Fund may be invested in
Permitted Investments. Any earnings on such amounts shall be payable to the
Class C Certificates. The Class C Certificates shall evidence ownership of the
Carryover Reserve Fund for federal tax purposes and the Holders thereof
evidencing not less than 50% of the Voting Rights of such Class shall direct the
Trustee in writing as to the investment of amounts therein. In the absence of
such written direction, all funds in the Carryover Reserve Fund shall be
invested by the Trustee in The Bank of New York cash reserves.
(d) Upon termination of the Trust Fund, any amounts remaining in
the Carryover Reserve Fund shall be distributed to the Holders of the Class C
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.
Section 4.09 Distributions on the REMIC I Regular Interests.
(a) (1)(A) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class AR Certificates (in respect
of the Class R-I Interest), as the case may be:
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(i) first, (a) to Holders of REMIC I Regular Interest
LT-AA, REMIC Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2,
REMIC I Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC
I Regular Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC Regular Interest LT-M3, REMIC Regular
Interest LT-M4, REMIC Regular Interest LT-M5, REMIC 1 REGULAR Interest
LT-M6, REMIC 1 Regular Interest LT-M7, REMIC Regular Interest LT-B,
REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest LT-P and REMIC
I Regular Interest LT-R, pro rata, in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B)
any amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC I Regular Interest LT-ZZ shall be reduced and
deferred when the REMIC I Overcollateralized Amount is less than the
REMIC I Overcollateralization Target Amount, by the lesser of (x) the
amount of such difference and (y) the REMIC I Regular Interest LT-ZZ
Maximum Interest Deferral Amount and such amount will be payable to the
Holders of REMIC Regular Interest LT-1A1, REMIC I Regular Interest
LT-1A2, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC Regular Interest LT-2A3, REMIC I Regular Interest LT-M1,
REMIC I Regular Interest LT-M2, REMIC Regular Interest LT-M3, REMIC
Regular Interest LT-M4, REMIC Regular Interest LT-M5, REMIC 1 REGULAR
Interest LT-M6, REMIC 1 Regular Interest LT-M7 and REMIC Regular
Interest LT-B in the same proportion as the Overcollateralization
Increase Amount is allocated to the Corresponding Certificates and the
Uncertificated Principal Balance of REMIC I Regular Interest LT-ZZ
shall be increased by such amount; and
(b) to Holders of REMIC I Regular Interest LT-1SUB, REMIC I
Regular Interest LT-1GRP, REMIC I Regular Interest LT-2SUB, REMIC I Regular
Interest LT-2GRP and REMIC I Regular Interest LT-XX, pro rata, in an amount
equal to (A) the Uncertificated Accrued Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates
(i) second, to the Holders of REMIC I Regular Interests,
in an amount equal to the remainder of the REMIC I Marker Allocation
Percentage of Available Funds for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
(a) 98.00% of such remainder (other than amounts payable
under clause (c) below), to the Holders of REMIC I Regular Interest
LT-AA and REMIC I Regular Interest LT-P, until the Uncertificated
Principal Balance of such REMIC I Regular Interest is reduced to zero,
provided, however, that REMIC I Regular Interest LT-P shall not be
reduced until the Distribution Date immediately following the
expiration of the latest Prepayment Charge as identified on the
Prepayment Charge Schedule or any Distribution Date thereafter, at
which point such amount shall be distributed to REMIC I Regular
Interest LT-P, until $100 has been distributed pursuant to this clause;
(b) 2.00% of such remainder first, to the Holders of
REMIC I Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC
I Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I
Regular Interest LT-2A, REMIC I Regular Interest
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LT-M1, REMIC I Regular Interest LT-M2, REMIC I Regular Interest LT-M3,
REMIC I Regular Interest LT-M4, REMIC I Regular Interest LT-M5, REMIC 1
REGULAR Interest LT-M6, REMIC 1 Regular Interest LT-M7, and REMIC
Regular Interest LT-B, 1.00% in the same proportion as principal
payments are allocated to the Corresponding Certificates, until the
Uncertificated Principal Balances of such REMIC I Regular Interests are
reduced to zero and second, to the Holders of REMIC I Regular Interest
LT-ZZ, until the Uncertificated Principal Balance of such REMIC I
Regular Interest is reduced to zero; then
(c) any remaining amount to the Holders of the Class AR
Certificates (in respect of the Class R-I Interest); and
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of (i) REMIC I Regular Interest LT-AA and REMIC I Regular Interest
LT-P, in that order and (ii) REMIC I Regular Interest LT-ZZ, respectively;
provided that REMIC I Regular Interest LT-P shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest LT-P, until $100 has been distributed pursuant to this clause.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
will be distributed by REMIC I to the Holders of REMIC I Regular Interest LT-P.
The payment of the foregoing amounts to the Holders of REMIC I Regular Interest
LT-P shall not reduce the Uncertificated Principal Balance thereof.
(ii) third, to the Holders of REMIC I Regular Interests,
in an amount equal to the remainder of the REMIC I Sub WAC Allocation
Percentage of Available Funds for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
(a) Distributions of principal shall be deemed to be made
to the REMIC I Regular Interests first, so as to keep the
Uncertificated Principal Balance of each REMIC I Regular Interest
ending with the designation "GRP" equal to 0.01% of the aggregate
Stated Principal Balance of the Mortgage Loans in the related Group;
second, to each REMIC I Regular Interest ending with the designation
"SUB," so that the Uncertificated Principal Balance of each such REMIC
I Regular Interest is equal to 0.01% of the excess of (x) the aggregate
Stated Principal Balance of the Mortgage Loans in the related Group
over (y) the Certificate Principal Balance of the Class A Certificate
in the related Group (except that if any such excess is a larger number
than in the preceding distribution period, the least amount of
principal shall be distributed to such REMIC I Regular Interests such
that the REMIC I Subordinated Balance Ratio is maintained); and third,
any remaining principal to REMIC I Regular Interest LT-XX.
(b) Notwithstanding the distributions described in this
Section 4.09, distribution of funds shall be made only in accordance
with Section 4.04.
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Section 4.10 [Reserved].
Section 4.11 Allocation of Realized Losses on the REMIC I Regular
Interests.
(a) The REMIC I Marker Percentage of all Realized Losses on the
Mortgage Loans shall be allocated by the Trustee on each Distribution Date to
the following REMIC I Regular Interests in the specified percentages, as
follows: first, to Uncertificated Interest payable to the REMIC I Regular
Interest LT AA and REMIC I Regular Interest LT ZZ up to an aggregate amount
equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of the REMIC I Regular Interest
LT AA and REMIC I Regular Interest LT ZZ up to an aggregate amount equal to the
REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Principal Balances of REMIC I Regular Interest LT AA, REMIC I
Regular Interest LT B and REMIC I Regular Interest LT ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balances of REMIC I Regular
Interest LT B has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC I Regular Interest LT AA, REMIC I Regular Interest LT M7 and
REMIC I Regular Interest LT ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT M7 has been
reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I
Regular Interest LT AA, REMIC I Regular Interest LT M6 and REMIC I Regular
Interest LT ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT M6 has been reduced to zero; sixth to the
Uncertificated Principal Balances of REMIC I Regular Interest LT AA, REMIC I
Regular Interest LT M5 and REMIC I Regular Interest LT ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT M5 has been reduced to zero; seventh to the Uncertificated Principal
Balances of REMIC I Regular Interest LT AA, REMIC I Regular Interest LT M4 and
REMIC I Regular Interest LT ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT M4 has been
reduced to zero; eighth to the Uncertificated Principal Balances of REMIC I
Regular Interest LT AA, REMIC I Regular Interest LT M3 and REMIC I Regular
Interest LT ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT M3 has been reduced to zero; ninth to the
Uncertificated Principal Balances of REMIC I Regular Interest LT AA, REMIC I
Regular Interest LT M2 and REMIC I Regular Interest LT ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT M2 has been reduced to zero; and tenth to the Uncertificated
Principal Balances of REMIC I Regular Interest LT AA, REMIC I Regular Interest
LT M1 and REMIC I Regular Interest LT ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC I Regular Interest LT M1 has been
reduced to zero.
(b) The REMIC I Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Principal Balance of
each REMIC I Regular Interest ending with the designation "GRP" equal to 0.01%
of the aggregate Stated Principal Balance of the Mortgage Loans in the related
Group; second, to each REMIC I Regular Interest ending with the designation
"SUB," so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in the related Group over (y) the Certificate
Principal Balance of the Senior Certificate in the related Group (except that if
any such excess is a larger number than in the preceding distribution
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period, the least amount of Realized Losses shall be applied to such REMIC I
Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining Realized Losses shall be allocated to
REMIC I Regular Interest LT-XX.
Section 4.12 The Class P Certificates.
On the Closing Date, $100 shall be deposited into the Class P
Distribution Account and shall be held in trust for the benefit of the Class P
Certificateholders for payment pursuant to Section 4.04 upon the earlier of (a)
the exercise of the Optional Termination by the Servicer pursuant to Section
9.01 and (b) the Class P Principal Distribution Date. Such funds may not be
invested.
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ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-8, B, C and D. The Certificates shall be issuable in
registered form, in the minimum dollar denominations, integral dollar multiples
in excess thereof and aggregate dollar denominations as set forth in the
following table:
Integral Multiples in Original Certificate Principal
Class Minimum Denomination Excess of Minimum Balance
------- -------------------- --------------------- -----------------------------
1-A-1 $20,000 $1,000 $328,830,000.00
1-A-2 $20,000 $1,000 $ 82,207,000.00
2-A-1 $20,000 $1,000 $ 63,412,000.00
2-A-2 $20,000 $1,000 $ 66,190,000.00
2-A-3 $20,000 $1,000 $ 11,580,000.00
A-R $99.95(1) N/A $ 100.00
M-1 $20,000 $1,000 $ 33,562,000.00
M-2 $20,000 $1,000 $ 21,798,000.00
M-3 $20,000 $1,000 $ 13,494,000.00
M-4 $20,000 $1,000 $ 12,110,000.00
M-5 $20,000 $1,000 $ 12,110,000.00
M-6 $20,000 $1,000 $ 10,380,000.00
M-7 $20,000 $1,000 $ 6,920,000.00
B $20,000 $1,000 $ 6,920,000.00
C 20% 1% $ 0.00
P 20% 1% $ 100.00
(1) 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
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any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee in writing the facts
surrounding the Transfer in substantially the forms set forth in Exhibit J (the
"Transferor Certificate") and (i) deliver a letter in substantially the form of
either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee
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designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee and
the Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor, the Seller and the Servicer against any
liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.
No Transfer of an ERISA-Restricted Certificate or a Subordinate
Certificate shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee (in the event such Certificate is a
Private Certificate that is a Definitive Certificate, such requirement is
satisfied only by the Trustee's receipt of a representation letter from the
transferee substantially in the form of Exhibit K or Exhibit L, or in the event
such Certificate is a Class A-R Certificate, such requirement is satisfied only
by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code, nor a Person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement to effect such transfer, or (ii) in the case of the Subordinate
Certificates, a representation from the transferee of such Certificates that (A)
it has acquired and is holding such Certificate in reliance on the Underwriters'
Exemption and that it understands that there are certain conditions to the
availability of the Underwriters' Exemption, including that the Certificate must
be rated, at the time of purchase, not less than "BBB-" or its equivalent by one
of the Rating Agencies or (B) 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 the conditions of Sections
I and III of PTCE 95-60 have been satisfied or (iii) in the case of the Class C
Certificates or the Class P Certificates if such Certificates have been offered
in a placement or underwriting which meets the requirements of the Underwriter's
Exemption, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in or "insurance company
general account" (as such term is defined in Section V(e) of PTCE 95-60) and the
conditions of sections I and III of PTCE 95-60 have been satisfied, or (iv) in
the case of a Class A-R Certificate, an opinion of counsel satisfactory to the
Trustee, for the benefit of the Trustee, the Depositor and the Servicer, and on
which they may rely, which opinion of counsel shall not be an expense of either
the Trustee or the Trust Fund, addressed to the Trustee to the effect that the
purchase and holding of such ERISA-Restricted Certificate is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Depositor, the Servicer or Trustee to any obligation, or liability
(including liabilities or obligations under ERISA or Section 4975 of the Code)
in addition to those expressly undertaken in this Agreement or to any liability.
For purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Book-Entry Certificate or
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a Class A-R Certificate, in the event the representation letter referred to in
the preceding sentence is not so furnished, such representation shall be deemed
to have been made to the Trustee by the transferee's (including an initial
acquiror's) acceptance of such ERISA-Restricted Certificate. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate or a Subordinate Certificate to or on behalf of an
employee benefit plan subject to ERISA or the Code other than as described above
shall be void and of no effect. Any purported beneficial owner whose acquisition
or holding of the Certificate or interest therein was effected in violation of
the conditions described in this paragraph shall indemnify and hold harmless the
Depositor, the Trustee, the Servicer, any Subservicer and the Trust Fund from
and against any and all liabilities, claims, costs or expenses incurred by those
parties as a result of that acquisition or holding.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of Transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the Transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in
a Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may
be registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, in addition to the representation letters required to be
delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached
hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall agree (A) to obtain a
Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Class A-R Certificate and (C) not to Transfer its Ownership Interest
in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported
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transferee shall become a Holder of a Class A-R Certificate in
violation of the provisions of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of
such Class A-R Certificate. The Trustee shall be under no liability to
any Person for any registration of Transfer of a Class A-R Certificate
that is in fact not permitted by Section 5.02(b) and this Section
5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and either the Rule 144A Letter or the Investment Letter.
The Trustee shall be entitled but not obligated to recover from any
Holder of a Class A-R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time
as it became other than a Permitted Transferee, all payments made on
such Class A-R Certificate at and after either such time. Any such
payments so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Seller or
the Servicer, to the effect that the elimination of such restrictions will not
cause any REMIC hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the Trust
Fund, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Class A-R Certificate hereby consents to any
amendment of this Agreement that, based on an Opinion of Counsel furnished to
the Trustee, is reasonably necessary (a) to ensure that the record ownership of,
or any beneficial interest in, a Class A-R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all representation letters and
opinions referred to above in this Section 5.02 in connection with any Transfers
shall be at the expense of the parties to such Transfers.
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 Servicer and the Trustee such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall
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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 Servicer, the Trustee and any agent of the 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 Servicer, the
Trustee nor any agent of the Servicer or the Trustee shall be affected by any
notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders and/or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders and/or Certificate Owners desire to communicate with other
Certificateholders and/or Certificate Owners with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders and/or Certificate Owners propose to
transmit or if the Depositor or 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 Servicer or such
Certificateholders and/or Certificate Owners at such recipients' expense the
most recent list of the Certificateholders and/or Certificate Owners of the
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder or Certificate Owner, by receiving and holding a Certificate,
agree that the Trustee shall not be held accountable by reason of the disclosure
of any such information as to the list of the Certificateholders hereunder,
regardless of the source from which such information was derived.
Section 5.06 Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
5.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
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(b) the Depositor, the Seller, the Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor or (b) 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
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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 SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Servicer and
the Seller.
The Depositor, the 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 Servicer or
the Seller.
Each of the Depositor and the Seller will keep in full effect its
existence, rights and franchises as a corporation under the laws of the United
States or under the laws of one of the states thereof and will each obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans and
to perform its duties under this Agreement. The 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 Servicer or the Seller may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor, the Servicer or the Seller shall be a party, or any
person succeeding to the business of the Depositor, the Servicer or the Seller,
shall be the successor of the Depositor, the 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 Servicer
shall be qualified to service mortgage loans on behalf of Xxxxxx Xxx or Freddie
Mac.
Section 6.03 Limitation on Liability of the Depositor, the Seller, the
Servicer and Others.
None of the Depositor, the Seller, the Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Depositor, the Seller, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Seller, the Servicer or any such
Person from any liability that would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Seller, the Servicer and any director, officer, employee or agent of the
Depositor, the Seller or the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person
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respecting any matters arising hereunder. The Depositor, the Seller, the
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Seller or the
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and that
in its opinion may involve it in any expense or liability; provided that any of
the Depositor, the Seller or the Servicer may, in its discretion undertake any
such action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee and
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Seller and the Servicer
shall be entitled to be reimbursed therefor out of the Certificate Account as
provided by Section 3.08 hereof.
Section 6.04 Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer to such appointment shall have assumed
the Servicer's responsibilities, duties, liabilities and obligations hereunder.
Notwithstanding the above, the Trustee and the Depositor hereby
specifically (i) consent to the pledge and assignment by the Servicer of all of
its right, title and interest in, to and under this Agreement to the Servicing
Rights Pledgee, for the benefit of certain lenders, and (ii) provided that no
Event of Default exists, agree that upon delivery to the Trustee by the
Servicing Rights Pledgee of a letter signed by the Servicer whereunder the
Servicer shall resign as Servicer under this Agreement, the Trustee shall
appoint the Servicing Rights Pledgee or its designee as successor Servicer,
provided that at the time of such appointment, the Servicing Rights Pledgee or
such designee meets the requirements of a successor Servicer pursuant to Section
7.02 and agrees to be subject to the terms of this Agreement. If, pursuant to
any provision hereof, the duties of the Servicer are transferred to a successor,
the entire amount of the Servicing Fee and other compensation payable to the
Servicer pursuant hereto shall thereafter be payable to such successor.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The 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
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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
Freddie Mac for persons performing servicing for mortgage loans purchased by
Xxxxxx Xxx or Freddie Mac. In the event that any such policy or bond ceases to
be in effect, the Servicer shall use its reasonable best efforts to obtain a
comparable replacement policy or bond from an insurer or issuer, meeting the
requirements set forth above as of the date of such replacement.
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ARTICLE VII
DEFAULT; TERMINATION OF 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 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 Business Day, after the date on which
written notice of such failure shall have been given to the Servicer by the
Trustee, the Seller or the Depositor, or to the Trustee and the Servicer by the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
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 Servicer by the Trustee or the Depositor, or to the
Trustee by the Holders of Certificates evidencing not less than 25% of the
Voting Rights evidenced by the Certificates; provided that the sixty-day cure
period shall not apply to the initial delivery of the Mortgage File for Delay
Delivery Mortgage Loans nor the failure to repurchase or substitute in lieu
thereof; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the 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 Servicer or all or
substantially all of the property of the Servicer;
(v) the 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;
(vi) the Servicer shall fail to reimburse in full the Trustee not
later than 6:00 P.M. New York time on the Business Day following the related
Distribution Date for any Advance made by the Trustee pursuant to Section
4.01(b) together with accrued and unpaid interest; or
(vii) a Servicer Termination Trigger is in effect.
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If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
shall, but only at the direction of the Holders of Certificates evidencing not
less than 25% of the Voting Rights evidenced by the Certificates, by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the 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 Servicer of such
written notice, all authority and power of the 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 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 Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Certificate Account, or thereafter be received
with respect to the Mortgage Loans. The Trustee shall promptly notify the Rating
Agencies of the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Servicer
hereunder, such 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 Servicer's rights and obligations as Servicer hereunder
and received after such notice, that portion thereof to which such Servicer
would have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any
other amounts payable to such 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 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 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 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 Servicer would have been
entitled to if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Trustee has become the successor to the 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 Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the
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Servicer hereunder. Any successor Servicer shall be an institution that is a
Xxxxxx Xxx and Freddie Mac approved seller/servicer in good standing, that has a
net worth of at least $15,000,000, and that is willing to service the Mortgage
Loans and executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the 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 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 Servicer hereunder, the Trustee, unless the Trustee is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided that
no such compensation shall be in excess of that permitted the 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 Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
In the event of a the termination of the Servicer, notwithstanding
anything to the contrary contained herein, the Trustee and the Depositor hereby
agree that upon delivery to the Trustee by the Servicing Rights Pledgee of a
letter signed by the Servicer within ten (10) Business Days of when notification
of such event shall have been provided to the Trustee, whereunder the Servicer
shall resign as Servicer under this Agreement, the Servicing Rights Pledgee or
its designee shall be appointed as successor Servicer (provided that at the time
of such appointment the Servicing Rights Pledgee or such designee meets the
requirements of a successor Servicer set forth above) and the Servicing Rights
Pledgee agrees to be subject to the terms of this Agreement.
Any successor to the 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 Servicer is
required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the Servicer
hereunder, either (i) the successor Servicer, including the Trustee if the
Trustee is acting as successor 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
Servicer shall cooperate with the successor 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
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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 Servicer. The
predecessor Servicer shall file or cause to be filed any such assignment in the
appropriate recording office. The successor Servicer shall cause such assignment
to be delivered to the Trustee or the Custodian promptly upon receipt of the
original with evidence of recording thereon or a copy certified by the public
recording office in which such assignment was recorded.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
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;
(iii) the Trustee shall not be liable, individually or as Trustee,
with respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class relating to the
time, method and place of conducting any proceeding for any remedy
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available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement; and
(vi) without in any way limiting the provisions of this Section
8.01 or Section 8.02 hereof, the Trustee shall be entitled to rely conclusively
on the information delivered to it by the Servicer in a Trustee Advance Notice
in determining whether or not it is required to make an Advance under Section
4.01(b), shall have no responsibility to ascertain or confirm any information
contained in any Trustee Advance Notice, and shall have no obligation to make
any Advance under Section 4.01(b) in the absence of a Trustee Advance Notice or
actual knowledge of a Responsible Officer of the Trustee that (A) such Advance
was not made by the Servicer and (B) that such Advance is not a Nonrecoverable
Advance.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) the Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default that may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by Holders of each Class of Certificates evidencing not less than 25%
of the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than in its commercial capacity as issuer of the
investment security);
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(viii) the Trustee shall not be deemed to have knowledge of
an Event of Default until a Responsible Officer of the Trustee shall
have received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute, conduct
or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred
therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the 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 Servicer
of any funds paid to the Depositor or the Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Certificate Account by the Depositor
or the 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 Indemnification of Trustee; Trustee's Fees and Expenses
The Seller covenants and agrees to pay or reimburse the Trustee, upon
its request, for all reasonable expenses, disbursements and advances incurred or
made by the Trustee on behalf of the Trust Fund in accordance with any of the
provisions of this Agreement (including, without limitation: (A) the reasonable
compensation and the expenses and disbursements of its counsel, but only for
representation of the Trustee acting in its capacity as Trustee hereunder and
(B) to the extent that the Trustee must engage persons not regularly in its
employ to perform acts or services on behalf of the Trust Fund, which acts or
services are not in the ordinary course of the duties of a trustee, paying agent
or certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Seller and
held harmless against any loss, liability or expense (i)
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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 Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder.
The Servicer shall indemnify the Trustee and any director, officer
employee or agent of the Trustee against any claim or legal action (including
any pending or threatened claim or legal action), loss, liability, fee or
expense that may be sustained in connection with this Agreement related to the
willful malfeasance, bad faith or gross negligence in the performance of the
Servicer's duties under this Agreement.
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 Servicer and their
respective affiliates; provided that such corporation cannot be an affiliate of
the Servicer other than the Trustee in its role as successor to the Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Servicer and by mailing notice of resignation by first class mail, postage
prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register and each Rating Agency, not less than 60 days before the
date specified in such notice when, subject to Section 8.08, such resignation is
to take effect, and (2) acceptance of appointment by a successor trustee in
accordance with Section 8.08 and meeting the qualifications set forth in Section
8.06. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or
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resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the 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 Servicer and one copy of which shall be
delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the 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 Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
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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 Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the 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 Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
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(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII created hereunder. 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 Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
will qualify as a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Trust Fund and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each REMIC created hereunder
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code
for the Trust Fund; (c) make or cause to be made elections, on behalf of each
REMIC created hereunder to be treated as a REMIC on the federal tax return of
each such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when required
to be provided to them in accordance with the REMIC Provisions, including
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without limitation, the calculation of any original issue discount using the
Prepayment Assumption; (e) provide information necessary for the computation of
tax imposed on the transfer of a Class A-R Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax); (f) to the extent that they are under its control conduct
the affairs of the Trust Fund at all times that any Certificates are outstanding
so as to maintain the status of each REMIC created hereunder as a REMIC under
the REMIC Provisions; (g) not knowingly or intentionally take any action or omit
to take any action that would cause the termination of the REMIC status of any
REMIC created hereunder; (h) pay, from the sources specified in the last
paragraph of this Section 8.11, the amount of any federal, state and local
taxes, including prohibited transaction taxes as described below, imposed on any
REMIC created hereunder prior to the termination of the Trust Fund when and as
the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) sign or cause to be signed federal, state or local income tax
or information returns; (j) maintain records relating to each REMIC created
hereunder, including but not limited to the income, expenses, assets and
liabilities of each such REMIC, and the fair market value and adjusted basis of
the Trust Fund property determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC created hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of any REMIC created hereunder in relation to any tax matter
involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors, omissions or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
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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 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 Certificates (pro rata), second, to the Class M-5
Certificates (pro rata), third, to the Class M-4 Certificates (pro rata),
fourth, to the Class M-3 Certificates (pro rata), fifth, to the Class M-2
Certificates (pro rata), sixth, to the Class M-1 Certificates (pro rata), and
seventh, to the Class 1-A Certificates (pro rata) and Class 2-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 1-A-1, Class 1-A-2,
Class 2-A-1, Class 2-A-2, Class 2-A-3, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7 and Class B Certificateholders to receive
payments from the Carryover Reserve Fund as rights in an interest rate cap
contracts written by the Corridor Contract Counterparty with respect to the Net
Rate Carryover funded by the Corridor Contracts and Excess Cashflow, in favor of
the Certificateholders (other than the Holders of the Class A-R, Class C and
Class P Certificates). Thus, each Certificate (other than the Class A-R, Class C
and Class P Certificates) shall be treated as representing ownership of not only
REMIC II Regular Interests, but also ownership of an interest in an interest
rate cap contract. For purposes of determining the issue price of the REMIC II
Regular Interests, the Trustee shall assume that the Class I-A Corridor
Contract, the Class 2-A Corridor Contract and Subordinated Corridor Contract
have values of $82,000, $32,000 and $46,000 respectively.
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ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Servicer, the Seller and
the Trustee created hereby shall terminate upon the earlier of (a) the purchase
by the 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 plus one month's accrued interest thereon at the
applicable Mortgage Rate less the Servicing Fee Rate, (ii) the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Servicer at
the expense of the Servicer and (y) the Stated Principal Balance of each
Mortgage Loan related to any REO Property and (iii) any remaining unpaid costs
and damages incurred by the Trust Fund that arises out of a violation of any
predatory or abusive lending law that also constitutes an actual breach of
representation (xxxiv) of Section 2.03(b) hereof 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 Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the earlier of (i) the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. Xxxxx', living on
the date hereof and (ii) the Latest Possible Maturity Date.
(b) The right to purchase all Mortgage Loans and REO Properties by the
Servicer pursuant to clause (a) above shall be conditioned upon the Stated
Principal Balance of the Mortgage Loans at the time of any such repurchase,
aggregating ten percent (10%) or less of the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Certificate Account, the Servicer shall direct the
Trustee to send a final distribution notice promptly to each Certificateholder
or (ii) the Trustee determines that a Class of Certificates shall be retired
after a final distribution on such Class, the Trustee shall notify the related
Certificateholders within five (5) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the related Certificates at the
Corporate Trust Office of the Trustee. If the Servicer elects to terminate the
Trust Fund pursuant to clause (a) of Section 9.01, at least 5 days prior to the
date notice is to be mailed to the Certificateholders, such electing party shall
notify the Depositor and the Trustee of
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the date such electing party intends to terminate the Trust Fund and of the
applicable repurchase price of the related Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month 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 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 Servicer shall cause all funds
in the Certificate Account to be remitted to the Trustee for deposit in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of the related
Certificates. Upon such final deposit and the receipt by the Trustee of a
Request for Release therefor, the Trustee shall promptly release to the Servicer
the Mortgage Files for the related Mortgage Loans.
Upon presentation and surrender of the related Certificates, the
Trustee shall cause to be distributed to Certificateholders of each affected
Class the amounts allocable to such Certificates held in the Distribution
Account (and, if applicable, the Carryover Reserve Fund) in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
related Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R Certificates shall be entitled to all unclaimed
funds and other assets that remain subject hereto.
Section 9.03 Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option on the
Mortgage Loans, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure of the Trust Fund to comply with the requirements of this Section
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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 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 Servicer shall prepare a plan of
complete liquidation and shall otherwise satisfy all the requirements of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained at the expense of the
Servicer;
(2) During such 90 day liquidation period, and at or prior to the
time of making the final payment on the Certificates, the Servicer as agent of
the Trustee shall sell all of the assets of the Trust Fund for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class A-R Certificateholders all cash on hand (other than
cash retained to meet claims) related to such Class of Certificates, and the
Trust Fund shall terminate at that time
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the 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 xxxxxx
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Servicer, 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 Servicer.
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer, the Seller and the Trustee, without the consent of any of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, to comply with any rule of the U.S. Securities and Exchange
Commission, to make such other provisions with respect to matters or questions
arising under this Agreement, as shall not be inconsistent with any other
provisions herein or to give effect to the expectations of the investors if such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder; provided that any such
amendment shall be deemed not to adversely affect in any material respect the
interests of the Certificateholders and no such Opinion of Counsel shall be
required if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates, it being
understood and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating.
Notwithstanding the foregoing, no amendment that significantly changes the
permitted activities of the trust created by this Agreement may be made without
the consent of Certificateholders representing not less than 51% of the Voting
Rights of each Class of Certificates affected by such amendment.
The Trustee, the Depositor, the Servicer and the Seller may also at any
time and from time to time amend this Agreement, without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or appropriate to maintain the qualification of the
Trust Fund as a REMIC under the Code or to avoid or minimize the risk of the
imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such opinion
but in any case shall not be an expense of the Trustee, to the effect that such
action is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Servicer, the Seller and the Trustee and the Holders of each Class of
Certificates adversely affected thereby evidencing not less than a majority
Percentage Interest of the Voting Rights of such Class for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided that no such amendment pursuant to this paragraph shall
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as
142
described in (i), without the consent of the Holders of Certificates of such
Class evidencing 66% or more of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
143
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement (within the
meaning of the Uniform Commercial Code of the State of New York) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not
been cured;
(iii) The resignation or termination of the Servicer or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans
pursuant to Sections 2.02, 2.03, 2.04 and 3.12; and
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
144
(i) Each report to Certificateholders described in
Section 4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the Depositor,
CWABS, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx
Xxxxx, with a copy to the same address, Attention: Legal Department; (ii) in the
case of the Seller, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx, with a copy to the same address,
Attention: Legal Department, or such other address as may be hereafter furnished
to the Depositor and the Trustee by the Servicer in writing; (iii) in the case
of the Servicer, Xxxxxx Loan Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxx 00000 or such other address as may be hereafter furnished to the Depositor
and the Trustee by the 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, CPT Series 2004-EC1, or such other address
as the Trustee may hereafter furnish to the Depositor or the Servicer; and (v)
in the case of the Rating Agencies, (y) Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., Attention: Mortgage Surveillance
Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (z) Xxxxx'x
Investors Service, Inc., Residential Mortgage Monitoring Department, 00 Xxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, or such other address as may hereinafter be
furnished to the Depositor in writing by Moody's. Notices to Certificateholders
shall be deemed given when mailed, first class postage prepaid, to their
respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
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
145
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 Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor, the Seller or the Trustee during the
Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the 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 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
Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
146
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.
[Signature Pages Follow]
147
IN WITNESS WHEREOF, the Depositor, the 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 Xxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By:
----------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
XXXXXX LOAN SERVICING LP,
as Servicer
By:
----------------------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK
(solely with respect to its obligations under Section 4.01(b))
By:____________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
STATE OF TEXAS )
) ss.:
COUNTY OF )
On this 30th day of November, 2004, before me, a notary public in and
for said State, appeared Xxxxx Xxxxxx, personally known to me on the basis of
satisfactory evidence to be a 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]
150
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of November, 2004, before me, a notary public in and
for said State, appeared Xxxxxx XxXxxxx personally known to me on the basis of
satisfactory evidence to be a Senior Vice President of Xxxxxx Loan Servicing LP,
one of the organizations that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
[Notarial Seal]
151
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of November, 2004, before me, a notary public in and
for said State, appeared Xxxxx Xxxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
[Notarial Seal]
152
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of November, 2004, before me, a notary public in and
for said State, appeared Xxxxx Xxxxxx, personally known to me on the basis of
satisfactory evidence to be an assistant treasurer 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
[Notarial Seal]
153
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of November, 2004, before me, a notary public in and
for said State, appeared Xxxx Xxxxxxxx, 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
[Notarial Seal]
154
Exhibit A-1
Exhibit A-1 is a photocopy
of the Class 1-A-1 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-1
Exhibit A-2
Exhibit A-2 is a photocopy
of the Class 1-A-2 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-2
Exhibit A-3
Exhibit A-3 is a photocopy
of the Class 2-A-1 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-3
Exhibit A-4
Exhibit A-4 is a photocopy
of the Class 2-A-2 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-4
Exhibit A-5
Exhibit A-5 is a photocopy
of the Class 2-A-3 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-5
Exhibit A-6
Exhibit A-6 is a photocopy
of the Class M-1 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-6
Exhibit A-7
Exhibit A-7 is a photocopy
of the Class M-2 Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-7
Exhibit A-8
Exhibit A-8 is a photocopy
of the Class M-3 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-8
Exhibit A-9
Exhibit A-9 is a photocopy
of the Class M-4 Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-9
Exhibit A-10
Exhibit A-10 is a photocopy
of the Class M-5 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-10
Exhibit A-11
Exhibit A-11 is a photocopy
of the Class M-6 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-11
Exhibit A-12
Exhibit A-12 is a photocopy
of the Class M-7 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-12
Exhibit A-13
Exhibit A-13 is a photocopy
of the Class B Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-13
Exhibit B
Exhibit B is a photocopy
of the Class C Certificate
as delivered.
[See appropriate documents delivered at closing]
B-1
Exhibit C
Exhibit C is a photocopy
of the Class P Certificate
as delivered.
[See appropriate documents delivered at closing]
C-1
Exhibit D-1
Exhibit D-1 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 and F-2
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement, dated as of November 1, 2004,
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Xxxxxx Loan Servicing LP, as Master Servicer and
The Bank of New York, as Trustee, relating to the Asset-Backed
Certificates, Series 2004-EC1
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee (the "Trustee"), hereby
certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or listed on the attachment hereto)
it has reviewed the Mortgage File and the Mortgage Loan Schedule and has
determined that: (i) all documents required to be included in the Mortgage File
are in its possession; (ii) such documents have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan; and (iii) based on
examination by it, and only as to such documents, the information set forth in
items (i), (ii), (iii) and (iv) of the definition or description of "Mortgage
Loan Schedule" is correct.
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
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.
G-1-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:_______________________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement, dated as of November 1, 2004,
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Xxxxxx Loan Servicing LP, as Master Servicer and
The Bank of New York, as Trustee, relating to the Asset-Backed
Certificates, Series 2004-EC1
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) the Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to the
Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related
Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, and in the case of each
Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting thereon the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which
such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-
G-2-1
EC1, CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the Pooling and Servicing
Agreement, dated as of November 1, 2004, without recourse",
or, in the case of each Mortgage Loan with respect to property
located in the State of California that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage in blank
(each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of
and transfer to the assignee thereof, under the Mortgage to
which such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such Mortgage [(noting the presence of a MIN in the case of
each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto
or, in the event such original title policy has not been
received from the insurer, any one of an original title
binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title
company, with the original policy of title insurance to be
delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
G-2-2
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:
G-2-3
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement, dated as of November 1, 2004
(the "Pooling and Servicing Agreement"), among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, Xxxxxx
Loan Servicing LP, as Master Servicer and The Bank of New
York, as Trustee, relating to the Asset-Backed Certificates,
Series 2004-EC1
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement. The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Trustee has received:
(i). the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to the
Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related
Mortgage Note; and
(ii). in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-EC1, CWABS, Inc., by
The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement, dated as of
November 1, 2004, without recourse", or, in the case of each
Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and
G-3-1
sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment
relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE BANK OF NEW YORK,
as Trustee
By:______________________
Name:
Title:
G-3-2
EXHIBIT G-4
[RESERVED]
G-4
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement, dated as of November 1, 2004
(the "Pooling and Servicing Agreement"), among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, Xxxxxx
Loan Servicing LP, as Master Servicer and The Bank of New
York, as Trustee, relating to the Asset-Backed Certificates,
Series 2004-EC1
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) the
Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _________________ without
recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to the
Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related
Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, and in the case of each
Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting thereon the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which
such Mortgage has been recorded;
H-1
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-EC1, CWABS, Inc., by
The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement, dated as of
November 1, 2004, without recourse", or, in the case of each
Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment
relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such Mortgage [(noting the presence of a MIN in the case of
each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto
or any one of an original title binder, an original
preliminary title report or an original title commitment, or a
copy thereof certified by the title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xiii) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
H-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:__________________
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of __________, the proposed transferee
of an Ownership Interest in a Class A-R Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, dated as of November 1, 2004
(the "Agreement"), by and among CWABS, Inc., as depositor (the "Depositor"),
Countrywide Home Loans, Inc., as Seller, Xxxxxx Loan 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. Either (a) the transferee is not an employee benefit plan that is
subject to Section 406 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, or
(b) the transferee has provided the opinion of counsel specified in Section
5.02(b) of the Agreement. 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
I-1
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives and, except as
may be provided in Treasury Regulations, persons holding interests in
pass-through entities as a nominee for another Person.)
5. The transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the transferee contemplated hereby null and void.
6. The transferee agrees to require a Transfer Affidavit from any
Person to whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I 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 __th 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 __th day of _______, 20__.
____________________________________
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-3
EXHIBIT 1
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
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.
"Transfer": Any direct or indirect transfer or sale of 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 representation letters required to be
delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached
hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall agree (A) to obtain a
Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Class A-R Certificate and (C) not to Transfer its Ownership Interest
in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any
other action with respect to such Holder under the provisions of this
Agreement so long as the Transfer was registered after receipt of the
related Transfer Affidavit, Transferor Certificate and either the Rule
144A Letter or the Investment Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Class A-R Certificate
that was in fact not a Permitted Transferee at the time it became a
Holder or,
I-5
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 Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Seller or
the Master Servicer, to the effect that the elimination of such restrictions
will not cause any REMIC hereunder to fail to qualify as a REMIC at any time
that the Certificates are outstanding or result in the imposition of any tax on
the Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Class A-R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Class A-R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
I-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS A-R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates, Series 2004-EC1
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 November 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Xxxxxx Loan Servicing LP, as Master Servicer and The Bank of New York, as
Trustee.
Very truly yours,
__________________________________
Name of Transferor
By:_______________________________
Name:
Title:
J-1-1
EXHIBIT J-2
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates, Series 2004-EC1, Class
[ ]
Ladies and Gentlemen:
In connection with our disposition of the above-captioned Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement, dated as of November 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Xxxxxx Loan Servicing LP, as Master Servicer and The Bank of New York, as
Trustee.
__________________________________
Name of Transferor
By:_______________________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates, Series 2004-EC1, Class
[ ]
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has provided the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement, (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration
K-1
statement under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
November 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Xxxxxx Loan Servicing LP, as Master Servicer and The Bank of New
York, as Trustee.
__________________________________
Name of Transferor
By:_______________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates, Series 2004-EC1, Class
[ ]
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has provided the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement, (e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the
L-1
Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
November 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Xxxxxx Loan Servicing LP, as Master Servicer and The Bank of New
York, as Trustee.
L-2
ANNEX 1 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis either at least $100,000 in securities or, if
Buyer is a dealer, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities (except for the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
L-3
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction.
L-4
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
____________________________________
Print Name of Buyer
By:_________________________________
Name:
Title:
Date:_______________________________
L-5
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
L-6
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
_________________________________________
Print Name of Buyer or Adviser
By: _____________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date: ___________________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
Loan Information
Name of Mortgagor: ________________________________________
Master Servicer
Loan No.: ________________________________________
Trustee
Name: ________________________________________
Address: ________________________________________
Trustee
Mortgage File No.: ________________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2004-EC1, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of November 1, 2004 (the "Pooling and Servicing
Agreement"), among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Xxxxxx Loan Servicing LP, as Master Servicer and the Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum
of $________, made by __________________, payable to, or endorsed to
the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image -------------.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image________________.
M-1
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's
Office of the County of __________, State of _______________ in
book/reel/docket _______________ of official records at page/image
_____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ________________________________________
( ) ________________________________________
( ) ________________________________________
( ) ________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession
of the Documents in trust for the benefit of the Trust Fund, solely for
the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly
permit the Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or other
impositions nor shall the Master Servicer assert or seek to assert any
claims or rights of setoff to or against the Documents or any proceeds
thereof.
(3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the Trustee
when the need therefor no longer exists, unless the Mortgage Loan
relating to the Documents has been liquidated and the proceeds thereof
have been remitted to the Certificate Account and except as expressly
provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trust Fund, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
[Master Servicer]
By _______________________________
Its ________________________________
Date: _________________, ____
M-2
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2004-EC1
__________________________________________ 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:_______________ XXXXXXXX'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
N-1
/ / ASSISTANT VICE PRESIDENT
N-2
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
[Provide Upon Request]
P-1
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
FORM OF CAP CONTRACT
Transaction
Date: [________], 2004
To: Countrywide Home Loans, Inc.
Facsimile: 000-000-0000
Telephone: 000-000-0000
From: Xxxxxx Brothers Special Financing Inc.
Transaction Management Group
Facsimile: 000-000-0000 (United States of America)
Telephone: 000-000-0000(Xxxxx Xxxxxxxxx)
Ref. Numbers: Risk ID: [______] / Effort ID: [______] /Global Deal ID: [______]
--------------------------------------------------------------------------------
Dear Sir or Madam:
The purpose of this communication (this "Confirmation") is to confirm the terms
and conditions of the transaction (the "Transaction") entered into between
Xxxxxx Brothers Special Financing Inc. ("Party A") and Countrywide Home Loans,
Inc. ("Party B") on the Trade Date specified below. This Confirmation
constitutes a "Confirmation" as referred to in the Agreement specified below.
THIS CONFIRMATION SUPERSEDES AND REPLACES IN ITS ENTIRETY ANY OTHER CONFIRMATION
REFERENCING THE TRANSACTION TO WHICH THIS CONFIRMATION RELATES.
This Confirmation supplements, forms part of, and is subject to, the ISDA Master
Agreement dated as of 06 June, 1996, as amended and supplemented from time to
time, between Party A and Party B (the "Agreement"). All provisions contained in
the Agreement shall govern this Confirmation except as expressly modified below.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and the terms of this Confirmation, this
Confirmation will govern. For the purpose of the Definitions, references herein
to a "Transaction" shall be deemed to be references to a "Swap Transaction".
R-1
Party A and Party B each represents that entering into the Transaction is within
its capacity, is duly authorized and does not violate any laws of its
jurisdiction of organization or residence or the terms of any agreement to which
it is a party. Party A and Party B each represents that (a) it is not relying on
the other party in connection with its decision to enter into this Transaction,
and neither party is acting as an advisor to or fiduciary of the other party in
connection with this Transaction regardless of whether the other party provides
it with market information or its views; (b) it understands the risks of the
Transaction and any legal, regulatory, tax, accounting and economic consequences
resulting therefrom; and (c) it has determined based upon its own judgment and
upon any advice received from its own professional advisors as it has deemed
necessary to consult that entering into the Transaction is appropriate for such
party in light of its financial capabilities and objectives. Party A and Party B
each represents that upon due execution and delivery of this Confirmation, it
will constitute a legally valid and binding obligation, enforceable against it
in accordance with its terms, subject to applicable principles of bankruptcy and
creditors' rights generally and to equitable principles of general application.
The terms of the particular Transaction to which this Confirmation relates are
as follows:
R-2
GENERAL TERMS:
Trade Date: [______], 2004
Effective Date: [______], 2004
Termination Date: [______], 2010, subject to
adjustment in accordance with the
Modified Following Business Day
Convention.
Notional Amount: USD [______] - subject to
adjustment in accordance with
Appendix A attached hereto.
FIXED AMOUNTS:
Fixed Amount Payer Payment Dates: [______], 2004, subject to
adjustment in accordance with the
Following Business Day Convention.
Fixed Amount: USD [______]
FLOATING AMOUNTS:
Floating Amount Payer: Party A
FLOATING RATE: SHALL BE EQUAL TO 100 MULTIPLIED BY
THE LESSER OF (A) THE DIFFERENCE OF
THE CEILING RATE MINUS THE STRIKE
RATE (AS SET FORTH IN SCHEDULE
BELOW) AND (B) THE GREATER OF (I)
0% AND (II) THE EXCESS OF
USD-LIBOR-BBA WITH DESIGNATED
MATURITY OF 3 MONTHS OVER THE
STRIKE RATE.
------------------ ---------------- ----------- ------------
From and including To but excluding Strike Rate Ceiling Rate
------------------ ---------------- ----------- ------------
------------------ ---------------- ----------- ------------
------------------ ---------------- ----------- ------------
R-3
Floating Amount Payer Payment End The 25th calendar day of each
month, from and including Dates:
25 December, 2004 to and
including the Termination Date,
subject to adjustment in
accordance with the Modified
Following Business Day
Convention.
Floating Rate Payer One (1) Business Day preceding each
Floating Rate
Payment Dates: Payer Period End Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: Inapplicable
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period
BUSINESS DAYS: New York
MISCELLANEOUS:
Calculation Agent: Party A
R-4
Please confirm your agreement with the foregoing by executing this Confirmation
and returning such Confirmation, in its entirety, to us at facsimile number
000-000-0000 (United States of America), Attention: Documentation.
Yours sincerely, Accepted and agreed to:
XXXXXX BROTHERS SPECIAL FINANCING INC. COUNTRYWIDE HOME LOANS, INC.
By: _________________________________
Name:
Title:
R-5
Appendix A
*CALCULATION PERIODS UP TO BUT EXCLUDING OUTSTANDING NOTIONAL AMOUNT:
THE PAYMENT DATE SCHEDULED TO OCCUR:
* subject to adjustment in accordance with the relevant Business Day Convention.
R-6
EXHIBIT S
FORM OF NOVATION AGREEMENT
dated as of [________, 200_] among:
[_______] (the "REMAINING PARTY"),
[_______] (the "TRANSFEROR")
AND
The [_______], not in its individual capacity, but solely as trustee
for [_______] (the "TRANSFEREE") pursuant to a Pooling and Servicing Agreement,
dated and effective as of [_______, 200_], among [_______], as Depositor,
[_______], as seller (the "Seller"), [_______], as master servicer, and
[_______], as trustee (the "POOLING AND SERVICING AGREEMENT").
The Transferor and the Remaining Party have entered into one or more
Transactions as identified in the attached Annex (each an "OLD TRANSACTION"),
each evidenced by a Confirmation (an "OLD CONFIRMATION") attached hereto,
subject to a 1992 ISDA Master Agreement (as defined below) dated as of [_______]
(the "OLD AGREEMENT").
With effect from and including [_______, 200_] (the "NOVATION DATE"), the
Transferor wishes to transfer by novation to the Transferee, and the Transferee
wishes to accept the transfer by novation of, all the rights, liabilities,
duties and obligations of the Transferor under and in respect of each Old
Transaction, with the effect that the Remaining Party and the Transferee enter
into a new transaction (each a "NEW TRANSACTION") between them having terms
identical to those of each Old Transaction, as more particularly described
below, but with the modifications provided for herein.
The Remaining Party wishes to accept the Transferee as its sole counterparty
with respect to the New Transactions.
The Transferor and the Remaining Party wish to have released and discharged, as
a result and to the extent of the transfer described above, their respective
obligations under and in respect of the Old Transactions.
Accordingly, the parties agree as follows: ---
1. DEFINITIONS.
Terms defined in the ISDA Master Agreement (Multicurrency-Cross Border) as
published in 1992 by the International Swaps and Derivatives Association, Inc.,
(the "1992 ISDA MASTER AGREEMENT") are used herein as so defined, unless
otherwise provided herein.
2. TRANSFER, RELEASE, DISCHARGE AND UNDERTAKINGS.
With effect from and including the Novation Date and in consideration of the
mutual representations, warranties and covenants contained in this Novation
Agreement and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged by each of the parties):
(a) the Remaining Party and the Transferor are each released and
discharged from further obligations to each other with respect
to each Old Transaction and their respective rights against
each other thereunder are cancelled, provided that such
release and discharge shall not affect any rights, liabilities
or obligations of the Remaining Party or the Transferor with
respect to payments or other obligations due and payable or
due to be performed on or prior to the Novation Date, and all
such payments and obligations shall be paid or performed by
the Remaining Party or the Transferor in accordance with
S-1
the terms of the Old Transactions; provided further, for the
avoidance of doubt, the Transferee shall not be liable with
respect to payments or other obligations due and payable or
due to be performed under the Old Transactions on or prior to
the Novation Date.
(b) in respect of each New Transaction, the Transferee (pursuant
to the Pooling and Servicing Agreement) and the Remaining
Party each undertake duties and obligations towards the other
and acquire rights against each other identical in their terms
to each corresponding Old Transaction (and, for the avoidance
of doubt, as if the Transferee were the Transferor and with
the Remaining Party remaining the Remaining Party, save for
any rights, liabilities or obligations of the Remaining Party
or the Transferor with respect to payments or other
obligations due and payable or due to be performed on or prior
to the Novation Date); and
(c) each New Transaction shall be governed by and form part of an
agreement in the form of a 1992 ISDA Master Agreement between
the Remaining Party and Transferee as if the parties had
executed on [_______, 2004_], a 1992 ISDA Master Agreement
(but without any Schedule except for (i) the election of the
laws of the State of New York (without reference to choice of
law doctrine) as the governing law and USD as Termination
Currency and (ii) the items specified in Section 10 below (the
"NEW AGREEMENT")), and the relevant Old Confirmation, as
amended pursuant to this Novation Agreement, shall be deemed
to be a Confirmation between the Remaining Party and the
Transferee.
3. REPRESENTATIONS AND WARRANTIES.
(a) On the date of this Novation Agreement:
(i) Each of the parties makes to each of the other
parties those representations and warranties set
forth in Section 3(a) of the 1992 ISDA Master
Agreement with references in such Section to "this
Agreement" or "any Credit Support Document" being
deemed references to this Novation Agreement alone.
(ii) The Remaining Party and the Transferor each makes to
the other and the Remaining Party and the Transferee
each makes to the other the representation set forth
in Section 3(b) of the 1992 ISDA Master Agreement, in
the former case with respect to the Old Agreement,
and in the latter case with respect to the New
Agreement and taking into account the parties
entering into and performing their obligations under
this Novation Agreement.
(iii) Each of the Transferor and the Remaining Party
represents and warrants to each other and to the
Transferee that :
(A) it has made no prior transfer (whether by
way of security or otherwise) of the Old
Agreement or any interest or obligation in
or under the Old Agreement or in respect of
any Old Transaction; and
(B) as of the Novation Date, all obligations of
the Transferor and the Remaining Party under
each Old Transaction required to be
performed on or before the Novation Date
have been fulfilled.
(b) Subject to its obligations under the Pooling and Servicing
Agreement, the Transferor makes no representation or warranty
and does not assume any responsibility with respect to the
legality, validity, effectiveness, adequacy or enforceability
of any New Transaction or the New Agreement or any documents
relating thereto and assumes no responsibility for the
condition, financial or otherwise, of the Remaining Party, the
Transferee or any other person or for the performance and
observance by the Remaining Party, the Transferee or any other
person of any of its obligations under any New Transaction or
the New Agreement or any document relating thereto and any and
all such conditions and warranties, whether express or implied
by law or otherwise, are hereby excluded.
S-2
4. COUNTERPARTS.
This Novation Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.
5. COSTS AND EXPENSES.
The parties will each pay their own costs and expenses (including legal fees)
incurred in connection with this Novation Agreement and as a result of the
negotiation, preparation and execution of this Novation Agreement.
6. AMENDMENTS.
No amendment, modification or waiver in respect of this Novation Agreement will
be effective unless in writing (including a writing evidenced by a facsimile
transmission) and executed by each of the parties or confirmed by an exchange of
telexes or electronic messages on an electronic messaging system.
7. GOVERNING LAW; JURISDICTION.
This Novation Agreement will be governed by and construed in accordance with the
laws of the State of New York without reference to the conflict of laws
provisions thereof.
The terms of Section 13(b) of the 1992 ISDA Master Agreement shall apply to this
Novation Agreement with references in such Section to "this Agreement" being
deemed references to this Novation Agreement alone.
8. NOTICES.
For the purposes of this Novation Agreement and Section 12(a) of the New
Agreement, the addresses for notices or communications are as follows: (i) in
the case of Transferor, as specified in the Old Confirmations, or such other
address as may be hereafter furnished in writing to Transferee and Remaining
Party; (ii) in the case of Transferee, [_______], or such other address as may
be hereafter furnished in writing to Transferor and Remaining Party; and (iii)
in the case of Remaining Party, as specified in the Old Confirmations, or such
other address as may be hereafter furnished in writing to Transferor and
Transferee.
9. PAYMENTS.
Any payments remitted by Remaining Party under the New Transaction shall be made
by wire transfer according to the following instructions:
[_________]
10. PROVISIONS DEEMED INCORPORATED INTO THE NEW AGREEMENT.
(a) Limitation on Events of Default. Notwithstanding the terms of
Sections 5 and 6 of the New Agreement, if at any time and so
long as the Transferee has satisfied in full all its payment
obligations under Section 2(a)(i) of the New Agreement and has
at the time no future payment obligations, whether absolute or
contingent, under such Section, then unless Remaining Party is
required pursuant to appropriate proceedings to return to the
Transferee or otherwise returns to the Transferee upon demand
of the Transferee any portion of any such payment: (i) the
occurrence of an event described in Section 5(a) (other than
Sections 5(a)(vii)(1), 5(a)(vii)(3), 5(a)(vii)(4),
5(a)(vii)(5), 5(a)(vii)(6), 5(a)(vii)(7) or 5(a)(vii)(8)) of
the New Agreement with respect to the Transferee shall not
constitute an Event of Default or Potential Event of Default
with respect to the Transferee as Defaulting Party; and (ii)
Remaining Party shall be entitled to designate an Early
Termination Date pursuant to Section 6 of the New 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 the New
Agreement with respect to Remaining Party as the Affected
Party or Section 5(b)(iii) of the New Agreement with respect
to Remaining Party as the Burdened Party.
S-3
(b) Non-Petition. Remaining Party hereby irrevocably and
unconditionally agrees that it will not institute against, or
join any other person in instituting against, the Transferee,
any bankruptcy, reorganization, arrangement, insolvency, or
similar proceeding under the laws of the United States or any
other jurisdiction for the non-payment of any amount due
hereunder or any other reason until the payment in full of the
Certificates (as defined in the Pooling and Servicing
Agreement) and the expiration of a period of one year plus one
day (or, if longer, the applicable preference period)
following such payment. Nothing herein shall prevent Remaining
Party from participating in any such proceeding once
commenced.
(c) Additional Provisions. Notwithstanding the terms of Sections 5
and 6 of the New Agreement, the provisions of Sections
5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(b)(iv)
shall not apply to Remaining Party or the Transferee.
(d) No Set-off. Notwithstanding any provision of this Novation
Agreement or any other existing or future agreement, each
party irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or condition
payment or performance of any obligation between it and the
other party hereunder against any obligation between it and
the other party under any other agreements. The provisions for
Set-off set forth in Section 6(e) of the New Agreement shall
not apply for purposes of the New Transactions.
(e) Section 3 of the New Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each of Transferor, Transferee and Remaining Party
represents to the other on each date when it enters
into a Transaction that:
(1) Nonreliance. Each party represents to the
other party (which representation will be
deemed to be repeated by each party on each
date on which a Transaction is entered into
or amended, extended or otherwise modified)
that it is acting for its own account, and
has made its own independent decisions to
enter into the New Agreement and any
Transaction thereunder and as to whether the
New Agreement and any Transaction thereunder
is appropriate or proper for it based on its
own judgment and upon advice from such
advisors as it has deemed necessary. It is
not relying on any communication (written or
oral) of the other party as investment
advice or as a recommendation to enter into
the New Agreement or any Transaction
thereunder, it being understood that
information and explanations related to the
terms and conditions of the New Agreement
and any Transaction thereunder shall not be
considered investment advice or a
recommendation to enter into the New
Agreement or any Transaction thereunder. No
communication (written or oral) received
from the other party shall be deemed to be
an assurance or guarantee as to the expected
results of any Transaction thereunder.
(2) Purpose. Remaining Party is entering into
the New Transactions for the purposes of
managing its borrowings or investments,
hedging its underlying assets or liabilities
or in connection with a line of business
(including financial intermediation
services) or the financing of its business.
The Transferee is entering into the New
Transactions pursuant to the Pooling and
Servicing Agreement.
(3) Principal. The other party is not acting as
an agent, fiduciary or advisor for it in
respect of the New Transactions.
(4) Eligible Contract Participant. It
constitutes an "eligible contract
participant" as such term is defined in
Section 1(a)(12) of the Commodity Exchange
Act, as amended."
S-4
(5) Evaluation and Understanding. Each party
represents to the other party (which
representation will be deemed to be repeated
by each party on each date on which a
Transaction is entered into or amended,
extended or otherwise modified) that it is
capable of evaluating and understanding (on
its own behalf or through independent
professional advice), and understands and
accepts, the terms, conditions and risks of
that Transaction. It is also capable of
assuming, and assumes, the financial and
other risks of that Transaction.
(f) Substitution Event. If at any time the long-term senior
unsecured deposit ratings of Remaining Party shall be rated
below "BBB+" by Standard & Poor's Ratings Service, below
"Baa1" by Xxxxx'x Investors Service, Inc. and below "BBB+" by
Fitch, Inc., and within ten (10) Local Business Days following
the publication date(s) of such ratings, Remaining Party,
using its good faith efforts, fails to find an entity
acceptable to the Transferee, as directed in writing by the
Master Servicer, which acceptance shall not be unreasonably
withheld or delayed, to whom all of Remaining Party's
interests and obligations under this Agreement shall be
assigned at no cost to the Transferee, and following which
Remaining Party shall be released from all further obligations
under this Agreement, then, at the option of the Transferee,
such failure shall constitute an Additional Termination Event
with Remaining Party as the Affected Party.
(g) Amendment. Section 9(b) of the New Agreement is hereby amended
by adding the following at the end of such Section: "No
transfer, supplement, assignment, amendment, modification or
waiver in respect of the New Agreement will be effective
without the prior written consent of Standard & Poor's Ratings
Group, Xxxxx'x Investors Service, Inc. and Fitch, Inc."
(h) Consent to Recording. The parties agree that each may tape
(and/or electronically) record all telephonic conversations
between marketing and trading personnel in connection herewith
and/or the New Agreement (and/or any Transaction thereunder)
and that any such recordings may be submitted in evidence in
any proceedings relating hereto and/or the New Agreement
(and/or any Transaction).
(i) Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE NEW AGREEMENT OR
ANY TRANSACTION CONTEMPLATED THEREUNDER.
(j) Multibranch Party. For purpose of Section 10 of the New
Agreement: (i) Remaining Party is a Multibranch Party, and may
act through its Charlotte, North Carolina, Chicago, Illinois,
San Francisco, California, New York, New York or London,
England Office or such other Office as may be agreed to by the
parties in connection with a Transaction; and (ii) Transferee
is not a Multibranch Party.
(k) Amendments to Old Confirmations.
(i) The term "Floating Amount I" on page two of each Old
Confirmation is amended by deleting "I".
(ii) The term "Cap Rate I" on page two and Schedule B of
each Old Confirmation is amended by deleting "I".
(iii) The definition of "Floating Rate Option" on page two
of each Old Confirmation under the caption "Floating
Amount" is amended by inserting at the end of
"USD-LIBOR-BBA" the following:
"provided, however, that if USD-LIBOR-BBA for any
Calculation Period is greater than the Ceiling Rate
(as set forth in Schedule B attached hereto) then the
USD-LIBOR-BBA for such Calculation Period shall be
deemed to be the Ceiling Rate"
S-5
(iv) The term "Floating Amount II" and all terms related
to the term "Floating Amount II" (not including
Calculation Agent) are deleted in their entirety from
each Old Confirmation.
(v) The term "Cap Rate II" on Schedule B of each Old
Confirmation is amended by deleting it in its
entirety and inserting in its place "Ceiling Rate."
(l) Consent and Acknowledgment of Remaining Party. Remaining Party
hereby consents to the assignment and delegation by Transferor
to Transferee of all of Transferor's rights, duties, and
obligations under the Old Transactions pursuant to this
Novation Agreement. In addition, Remaining Party hereby
acknowledges that the responsibilities of Transferee under the
New Transactions will be performed on its behalf by [_______],
as master servicer under the Pooling and Servicing Agreement.
(m) Limitation on Liability. Transferee and Remaining Party agree
that the sole recourse in respect of the obligations of
Transferee under each New Transaction shall be to the Trust
Fund (as defined in the Pooling and Servicing Agreement).
Transferor and Remaining Party agree that: (i) Transferee is
entering into this Novation Agreement solely in its capacity
as trustee under the Pooling and Servicing Agreement (and not
in its individual capacity); and (ii) in no case shall
Transferee (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
Transferee under the terms of each New Transaction, all such
liability, if any, being expressly waived by Transferor and
Remaining Party and any person claiming by, through or under
either such party. Transferor hereby agrees to indemnify and
hold harmless the Trustee with respect to any and all claims
under the Old Transactions.
Notwithstanding the foregoing (or anything to the contrary in
this Novation Agreement), [_______] shall be liable for its
own negligence, willful misconduct, bad faith and/or fraud.
S-6
IN WITNESS WHEREOF the parties have executed this Novation Agreement on
the respective dates specified below with effect from and including the Novation
Date.
[_______] [_______]
By:................................... By:.................................
Name: Name:
Title: Title:
Date: _________, 2004 Date: _________, 2004
The [_______], not in its individual capacity, but solely as trustee for
[_______].
By:...................................
Name:
Title:
Date:
S-7
ANNEX
Transactions between [_______] and [_______]
Trade Date [_______],[_______] Reference No. [_______]
Trade Date [_______],[_______] Reference No. [_______]
Trade Date [_______],[_______] Reference No. [_______]
S-8
OLD CONFIRMATIONS
S-9
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2004-EC1
[Date]
Via Facsimile
The Bank of New York,
as Trustee
000 Xxxxxxx Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated as of
November 1, 2004, (the "Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, Xxxxxx Loan Servicing LP, as
Master Servicer and The Bank of New York, as Trustee. Capitalized terms used
herein shall have the meanings ascribed to such terms in the Pooling and
Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing Officer,
holding the office set forth beneath his/her name and hereby further certifies
as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note with
respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and deposited
in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan,
taking into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
and
4. We certify that all amounts due in connection with the waiver of a
Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Servicer pursuant to Section 3.20 of the Pooling and Servicing
Agreement, have been or will be so deposited.
XXXXXX LOAN SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:
------------------------------------
Name:
Title:
T-2
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
DURING THE RELATED PREPAYMENT PERIOD
----------- ----------------- ----------------------
LOAN NUMBER CLAUSE 2: YES/NO CLAUSE 3: (I) OR (II)
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
----------- ----------------- ----------------------
T-3
EXHIBIT U: Standard & Poor's Predatory Lending Categorization
Standard & Poor's has categorized loans governed by anti-predatory
lending laws in the Jurisdictions listed below into three categories based upon
a combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High Cost
by the industry.
------------------------------------------------------------------
STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION
----------------------------- ---------------------------------
STATE/JURISDICTION CATEGORY UNDER APPLICABLE
ANTI-PREDATORY LENDING LAW
----------------------------- ---------------------------------
Arkansas High Cost Home Loan
----------------------------- ---------------------------------
Cleveland Heights, Ohio Covered Loan
----------------------------- ---------------------------------
Colorado Covered Loan
----------------------------- ---------------------------------
Connecticut High Cost Home Loan
----------------------------- ---------------------------------
District of Columbia Covered Loan
----------------------------- ---------------------------------
Florida High Cost Home Loan
----------------------------- ---------------------------------
Georgia (Oct. 1, 2002 -
March 6, 2003) High Cost Home Loan
----------------------------- ---------------------------------
Georgia as amended
(March 7, 2003 - current) High Cost Home Loan
----------------------------- ---------------------------------
HOEPA Section 32 High Cost Loan
----------------------------- ---------------------------------
Illinois High Risk Home Loan
----------------------------- ---------------------------------
Kansas High Loan-to-Value Consumer
Loans and High APR Consumer Loans
----------------------------- ---------------------------------
Kentucky High Cost Home Loan
----------------------------- ---------------------------------
Los Angeles, Calif. High Cost Refinance Home Loan
----------------------------- ---------------------------------
Maine High Rate High Fee Mortgage
----------------------------- ---------------------------------
Massachusetts High Cost Home Loan
----------------------------- ---------------------------------
Nevada Home Loan
----------------------------- ---------------------------------
New Jersey High Cost Home Loan
----------------------------- ---------------------------------
New York High Cost Home Loan
----------------------------- ---------------------------------
New Mexico High Cost Home Loan
----------------------------- ---------------------------------
North Carolina High Cost Home Loan
----------------------------- ---------------------------------
Oakland, Calif. High Cost Home Loan
----------------------------- ---------------------------------
Ohio Covered Loan
----------------------------- ---------------------------------
Oklahoma Subsection 10 Mortgage
----------------------------- ---------------------------------
South Carolina High Cost Home Loan
----------------------------- ---------------------------------
West Virginia West Virginia Mortgage
Loan Act Loan
----------------------------- ---------------------------------
------------------------------------------------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
----------------------------- ---------------------------------
STATE/JURISDICTION CATEGORY UNDER APPLICABLE
ANTI-PREDATORY LENDING LAW
----------------------------- ---------------------------------
Georgia (Oct. 1, 2002-
March 6, 2003) Covered Loan
----------------------------- ---------------------------------
New Jersey Covered Home Loan
----------------------------- ---------------------------------
U-1
------------------------------------------------------------------
STANDARD & POOR'S HOME LOAN CATEGORIZATION
----------------------------------------------------- ------------
STATE/JURISDICTION CATEGORY UNDER APPLICABLE
ANTI-PREDATORY LENDING LAW
----------------------------- ---------------------------------
Georgia (Oct. 1, 2002-
March 6, 2003) Home Loan
----------------------------- ---------------------------------
New Jersey Home Loan
----------------------------- ---------------------------------
New Mexico Home Loan
----------------------------- ---------------------------------
North Carolina Consumer Home Loan
----------------------------- ---------------------------------
Oakland, Calif. Home Loan
----------------------------- ---------------------------------
South Carolina Consumer Home Loan
----------------------------- ---------------------------------
U-2
EXHIBIT V: Form of Power of Attorney
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
XXXXXX LOAN SERVICING LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: _________________________________
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that , having its principal place of business at
, as Trustee (the "Trustee") pursuant to that Pooling and Servicing Agreement
among (the "Depositor"), Xxxxxx Loan Servicing LP (the "Servicer"), and the
Trustee, dated as of 1, 200__ (the "Pooling and Servicing Agreement"), hereby
constitutes and appoints the Servicer, by and through the Servicer's officers,
the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name, place and
stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by the Servicer pursuant to the Pooling and Servicing Agreement for the
purpose of performing all acts and executing all documents in the name of the
Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recordings is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent of the
parties thereto or to correct title errors discovered after such title
insurance was issued and said modification or re-recording, in either
instance, does not adversely affect the lien of the Mortgage or Deed of
Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency or
unit with powers of eminent domain; this section shall include, without
limitation, the execution of partial
satisfactions/releases, partial reconveyances or the execution or
requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage loan
secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment of
the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of judicial
or non-judicial foreclosure or termination, cancellation or rescission
of any such foreclosure, including, without limitation, any and all of
the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust,
in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8.a.
through 8.e., above.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the
undersigned might or could do, and hereby does ratify and confirm to all that
said Attorney-in-Fact shall lawfully do or cause to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
IN WITNESS WHEREOF, as Trustee pursuant to that Pooling and Servicing Agreement
among the Depositor, the Servicer, and the Trustee, dated as of 1, 200__ (
Mortgage Loan Asset Backed Certificates, Series 200__-___), has caused its
corporate seal to be hereto affixed and these presents to be signed and
acknowledged in its name and behalf by its duly elected and authorized Vice
President this day of , 200__.
________________________________________
as Trustee for _____ Mortgage Loan Asset
Backed Certificates, Series 200__-___
By __________________________________
STATE OF___________
COUNTY OF__________
On , 200__, before me, the undersigned, a Notary Public in and for said state,
personally appeared , Vice President of as Trustee for Mortgage Loan Asset
Backed Certificates, Series 200__-___, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed that same in his/her authorized capacity, and that by his/her
signature on the instrument the entity upon behalf of which the person acted and
executed the instrument.
WITESS my hand and official seal.
(SEAL)
___________________________
Notary Public
My Commission Expires ________________________
