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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
and
BNY WESTERN TRUST COMPANY,
Co-Trustee
______________________________________
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2003
______________________________________
ASSET-BACKED CERTIFICATES, SERIES 2003-BC1
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS 3
Section 1.01. Defined Terms. 3
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES 44
Section 2.01. Conveyance of Mortgage Loans. 44
Section 2.02. Acceptance of the Mortgage Loans. 48
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Seller. 50
Section 2.04. Representations and Warranties of the Depositor. 65
Section 2.05. Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases. 66
Section 2.06. Authentication and Delivery of Certificates. 67
Section 2.07. Covenants of the Master Servicer. 67
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 69
Section 3.01. Master Servicer to Service Mortgage Loans. 69
Section 3.02. Subservicing; Enforcement of the Obligations of Master Servicer. 70
Section 3.03. Rights of the Depositor, the Seller and the Trustee in Respect of the Master Servicer. 71
Section 3.04. Trustee to Act as Master Servicer. 71
Section 3.05. Collection of Mortgage Loan Payments; Certificate Account; Distribution Account; Seller Shortfall
Interest Requirement. 72
Section 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts. 75
Section 3.07. Access to Certain Documentation and Information Regarding the Mortgage Loans. 76
Section 3.08. Permitted Withdrawals from the Certificate Account, Distribution Account and the Carryover Reserve
Fund. 76
Section 3.09. [Reserved.] 78
Section 3.10. Maintenance of Hazard Insurance. 78
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements. 79
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and Realized Losses;
Repurchase of Certain Mortgage Loans. 80
Section 3.13. Co-Trustee to Cooperate; Release of Mortgage Files. 83
i
Section 3.14. Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee. 84
Section 3.15. Servicing Compensation. 85
Section 3.16. Access to Certain Documentation. 85
Section 3.17. Annual Statement as to Compliance. 85
Section 3.18. Annual Independent Public Accountants' Servicing Statement; Financial Statements. 86
Section 3.19. The Cap Contract. 86
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER 88
Section 4.01. Advances. 88
Section 4.02. Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls. 88
Section 4.03. [Reserved] 89
Section 4.04. Distributions. 89
Section 4.05. Monthly Statements to Certificateholders. 92
Section 4.06. [Reserved] 95
Section 4.07. [Reserved] 95
Section 4.08. Carryover Reserve Fund. 95
Section 4.09. Distributions on the REMIC I Regular Interests. 96
Section 4.10. Distributions on the REMIC II Regular Interests 97
Section 4.11. Allocation of Realized Losses on the REMIC I and REMIC II Regular Interests. 98
Section 4.12. Termination of the Mortgage Insurance Policy. 99
ARTICLE V. THE CERTIFICATES 100
Section 5.01. The Certificates. 100
Section 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates. 100
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates. 104
Section 5.04. Persons Deemed Owners. 105
Section 5.05. Access to List of Certificateholders' Names and Addresses. 105
Section 5.06. Book-Entry Certificates. 105
Section 5.07. Notices to Depository. 106
Section 5.08. Definitive Certificates. 106
Section 5.09. Maintenance of Office or Agency. 107
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER 108
Section 6.01. Respective Liabilities of the Depositor, the Master Servicer and the Seller. 108
ii
Section 6.02. Merger or Consolidation of the Depositor, the Master Servicer or the Seller. 108
Section 6.03. Limitation on Liability of the Depositor, the Seller, the Master Servicer and Others. 108
Section 6.04. Limitation on Resignation of Master Servicer. 109
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds. 109
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER 111
Section 7.01. Events of Default. 111
Section 7.02. Trustee to Act; Appointment of Successor. 112
Section 7.03. Notification to Certificateholders. 114
ARTICLE VIII. CONCERNING THE TRUSTEE AND THE CO-TRUSTEE 115
Section 8.01. Duties of Trustee. 115
Section 8.02. Certain Matters Affecting the Trustee. 116
Section 8.03. Trustee Not Liable for Mortgage Loans. 117
Section 8.04. Trustee May Own Certificates. 117
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses. 117
Section 8.06. Eligibility Requirements for Trustee. 118
Section 8.07. Resignation and Removal of Trustee. 118
Section 8.08. Successor Trustee. 119
Section 8.09. Merger or Consolidation of Trustee. 120
Section 8.10. Appointment of Co-Trustee or Separate Trustee. 120
Section 8.11. Tax Matters. 121
Section 8.12. Co-Trustee. 123
ARTICLE IX. TERMINATION 127
Section 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans. 127
Section 9.02. Final Distribution on the Certificates. 127
Section 9.03. Additional Termination Requirements. 129
ARTICLE X. MISCELLANEOUS PROVISIONS 130
Section 10.01. Amendment. 130
Section 10.02. Recordation of Agreement; Counterparts. 131
Section 10.03. Governing Law. 131
Section 10.04. Intention of Parties. 132
Section 10.05. Notices. 132
Section 10.06. Severability of Provisions. 133
Section 10.07. Assignment. 134
iii
Section 10.08. Limitation on Rights of Certificateholders. 134
Section 10.09. Inspection and Audit Rights. 135
Section 10.10. Certificates Nonassessable and Fully Paid. 135
EXHIBITS
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-IO Certificate
EXHIBIT A-3 Form of Class M-1 Certificate
EXHIBIT A-4 Form of Class M-2 Certificate
EXHIBIT A-5 Form of Class B-1 Certificate
EXHIBIT 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
Co-Trustee on or prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 [Reserved]
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit
EXHIBIT J-1 Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Request for Release (for Co-Trustee)
EXHIBIT N Request for Release (for Mortgage Loans Paid in
Full, Repurchased or Replaced)
EXHIBIT O Copy of Depositary Agreement
EXHIBIT P Form of Mortgage Note and Mortgage
EXHIBIT Q [reserved]
EXHIBIT R Form of Cap Contract
EXHIBIT S Form of Cap Contract Assignment Agreement
iv
POOLING AND SERVICING AGREEMENT, dated as of January 1, 2003,
by and among CWABS, INC., a Delaware corporation, as depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller
(the "Seller"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership, as master servicer (the "Master Servicer"), The Bank of New York, a
New York banking corporation, as trustee (the "Trustee"), and BNY WESTERN TRUST
COMPANY, a California banking corporation, as Co-Trustee (the "Co-Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in eight
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 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.
Designation Uncertificated REMIC I Uncertificated Principal Balance Latest Possible Maturity
Pass-Through Rate Date
LT-1 Variable(1) $781,144,218.00 January 25, 2033
LT-IO Variable(1) $85,000,000.00 January 25, 0000
XX-X Variable(1) $100.00 January 25, 2033
_______________
(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
1
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, remittance rate (the "Uncertificated REMIC II
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 II Regular Interest shall
be the 360th Distribution Date. None of the REMIC II Regular Interests will be
certificated.
Designation Uncertificated REMIC II Uncertificated Principal BalancE Latest Possible Maturity
Pass-Through Rate Date
----------------- ----
MT-AA Variable(1) $848,821,333.64 January 25, 2033
MT-A1 Variable(1) $7,735,000.00 January 25, 2033
MT-M1 Variable(1) $297,500.00 January 25, 2033
MT-M2 Variable(1) $255,000.00 January 25, 2033
MT-B1 Variable(1) $212,500.00 January 25, 2033
MT-ZZ Variable(1) $8,822,884.36 January 25, 2033
MT-IO-1 0.50% (2) January 25, 2033
MT-IO-2 0.50% (2) January 25, 2033
MT-P Variable(1) $100.00 January 25, 2033
_______________
(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass- Through Rate.
(2) Calculated as provided in the definition of Uncertificated Notional
Amount.
REMIC III
---------
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC II Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
REMIC III. The Class R-III 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, Final
Scheduled Distribution Date and initial ratings for each Class of Certificates
comprising the interests representing "regular interests" in REMIC III. 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 III
Regular Certificates shall be the 360th Distribution Date.
Designation Pass-Through Rate Aggregate Initial Final Scheduled Distribution Date
Certificate Principal Balance
Class A-1 (1) $ 773,500,000.00 January 25, 2003
2
Class A-IO (1) (3) January 25, 2003
Class M-1 (1) $ 29,750,000.00 January 25, 2003
Class M-2 (1) $ 22,500,000.00 January 25, 2003
Class B-1 (1) $ 21,250,000.00 January 25, 2003
Class C (2) $ 16,144,218.00(2) January 25, 2003
Class P (4) $ 100.00 January 25, 2003
_______________
(1) Interest will accrue at a rate equal to the Pass-Through Rate, as
defined herein.
(2) The Class C Certificates will accrue interest on a Notional Balance as
described in the definition of Current Interest. The Class C
Certificates will not accrue interest on their Certificate Principal
Balance.
(3) The Class A-IO Certificates will accrue interest on a Notional Balance
as described in the definition of Notional Balance herein.
(4) The Class P Certificates 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-IO, Class A-R, Class P and Class C
Certificates), the period commencing on the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, the Closing Date) and
ending on the day immediately preceding such Distribution Date. With respect to
any Distribution Date and the Class A-IO Certificates and 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-IO
Certificates 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 A-IO Certificates and 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.
ACTUARIAL MORTGAGE LOAN: Any Mortgage Loan other than a Simple
Interest Mortgage Loan.
ADJUSTABLE RATE MORTGAGE LOANS: The Mortgage Loans identified
in the Mortgage Loan Schedule as having a Mortgage Rate which is adjustable for
the life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.
ADJUSTED MAXIMUM MORTGAGE RATE: With respect to each
Adjustable Rate Mortgage Loan, the Maximum Mortgage Rate less the Expense Fee
Rate. With respect to each Fixed Rate Mortgage Loan, the Adjusted Net Mortgage
Rate.
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ADJUSTED NET MORTGAGE RATE: As to each Mortgage Loan, the
Mortgage Rate less the Expense Fee Rate.
ADJUSTMENT DATE: As to each Adjustable Rate Mortgage Loan,
each date on which the related Mortgage Rate is subject to adjustment, as
provided in the related Mortgage Note.
ADVANCE: The aggregate of the advances required to be made by
the Master Servicer with respect to any Distribution Date pursuant to Section
4.01, the amount of any such advances being equal to the sum of (A) the
aggregate of payments of principal and interest on the Actuarial Mortgage Loans
and payments of interest on the Simple Interest Mortgage Loans (in each case,
net of the Servicing Fees) on the Mortgage Loans that were due on the related
Due Date and not received as of the close of business on the related
Determination Date and (B) with respect to each REO Property that has not been
liquidated, an amount equal to the excess, if any, of (x) one month's interest
(adjusted to the Net Mortgage Rate) on the Stated Principal Balance of the
related Mortgage Loan over (y) the net monthly rental income (if any) from such
REO Property deposited in the Certificate Account for such Distribution Date
pursuant to Section 3.12, less the aggregate amount of any such delinquent
payments that the Master Servicer has determined would constitute a
Nonrecoverable Advance were an advance to be made with respect thereto.
Notwithstanding the foregoing, all references to scheduled interest or interest
due on a related Due Date with respect to a Simple Interest Mortgage Loan will
mean an amount equal to the excess of (i) 30 days' interest at the applicable
Net Mortgage Rate on the Stated Principal Balance of such Simple Interest
Mortgage Loan as of the last day of the related Due Period over (ii) the portion
of any monthly payment received from the borrower during the related Due Period
which was allocable to interest.
AGREEMENT: This Pooling and Servicing Agreement and any and
all amendments or supplements hereto made in accordance with the terms herein.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Date and (ii) Principal Prepayments and Liquidation
Proceeds received in respect of such Mortgage Loans after the last day of the
related Prepayment Period or Due Period, respectively.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution
Date, the sum of the Realized Losses with respect to the Mortgage Loans which
are to be applied in reduction of the Certificate Principal Balance the most
subordinate Class of Subordinate Certificates outstanding pursuant to this
Agreement, which shall equal the amount, if any, by which, Certificate Principal
Balance of all Certificates (after all distributions of principal on such
Distribution Date) exceeds the Stated Principal Balance of the Mortgage Loans
for such Distribution Date.
4
APPRAISED VALUE: The appraised value of the Mortgaged Property
based upon the appraisal made for the Seller by a fee appraiser at the time of
the origination of the related Mortgage Loan, or the sales price of the
Mortgaged Property at the time of such origination, whichever is less, or with
respect to any Mortgage Loan originated in connection with a refinancing, the
appraised value of the Mortgaged Property based upon the appraisal made at the
time of such refinancing.
BANKRUPTCY CODE: Title 11 of the United States Code.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the State of California, City of
New York, New York or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
CAP CONTRACT: The transaction evidenced by the Confirmation
And Agreement (as assigned to the Trustee pursuant to the Cap Contract
Assignment Agreement), a form of which is attached hereto as Exhibit R.
CAP CONTRACT ASSIGNMENT AGREEMENT: The Assignment Agreement
regarding the Cap Contract dated as of the Closing Date among the Seller, the
Trustee and the Cap Contract Counterparty, a form of which is attached hereto as
Exhibit S.
CAP CONTRACT COUNTERPARTY: Bank of America, N.A., and any
permitted successors and assigns pursuant to Cap Contract.
CAP CONTRACT TERMINATION DATE: The Distribution Date in
February 2010.
CARRYOVER RESERVE FUND: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 4.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". 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-5, Exhibit B, Exhibit C and Exhibit D.
5
CERTIFICATE ACCOUNT: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans, Inc. in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". 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 Master Servicer before the Closing Date and
not applied in computing the Cut-off Date Principal Balance thereof, and (ii)
interest on the Mortgage Loans due on and after the Cut-off Date and received by
the Master Servicer before the Closing Date.
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 A-IO Certificates and Class C Certificates) and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
LESS the sum of (i) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (ii) in the case of any Subordinate
Certificate, any Applied Realized Loss Amounts allocated to such Certificate on
previous Distribution Dates pursuant to Section 4.04. 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
(other than the Class A-IO 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. The Class A-IO
Certificates do not have a Certificate Principal Balance.
CERTIFICATE REGISTER: The register maintained pursuant to
Section 5.02 hereof.
CERTIFICATEHOLDER or HOLDER: The person in whose name a
Certificate is registered in the Certificate Register (initially, Cede & Co., as
nominee for the Depository, in the case of any Class of Regular Certificates,
except that solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor or any
affiliate of the Depositor shall be deemed not to be Outstanding and the Voting
Interest evidenced thereby shall not be taken into account in determining
whether the requisite amount of Voting Interests necessary to effect such
consent has been obtained; provided that if any such Person (including the
Depositor) owns 100% of the Voting Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof (other than the second sentence of Section 10.01 hereof)
that requires the consent of the Holders of Certificates of a particular Class
as a condition to the taking of any action hereunder. The Trustee is entitled to
rely conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
CLASS: All Certificates bearing the same Class designation as
set forth in Section 5.01 hereof.
6
CLASS A-1 CERTIFICATE: Any Certificate designated as a "Class
A-1 Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
CLASS A-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class A-1 Certificates.
CLASS A-1 CURRENT INTEREST: For any Distribution Date, the
interest accrued during the related Accrual Period at the Class A-1 Pass-Through
Rate on the Class A-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
CLASS A-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-1
Certificates with respect to interest on such prior Distribution Dates.
CLASS A-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class A-1 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
A-1 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
A-1 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest accrued on the Class A Certificates at the Net Rate
Cap for such Distribution Date and (B) the Class 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 A-1 Pass-Through Rate (without
giving effect to the Net Rate Cap up to the Weighted Maximum Rate Cap).
CLASS A-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.400% per annum and, for any Distribution Date after
the Optional Termination Date, 0.800% per annum.
CLASS A-1 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class A-1 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.
CLASS A-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (A) the Certificate Principal Balance of the
Class A-1 Certificates immediately prior to such Distribution Date over (B) the
lesser of (1) 81.00% 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 (2) the aggregate Stated Principal Balances of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date minus the OC Floor.
7
CLASS A-IO CERTIFICATES: Any Certificate designated as a
"Class A-IO Certificate" on the face thereof, in the form of Exhibit A-2 hereto.
CLASS A-IO CURRENT INTEREST: For any Distribution Date, the
interest accrued on the Class A-IO Notional Balance during the related Accrual
Period at the Class A-IO Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
CLASS A-IO NOTIONAL BALANCE: For the Accrual Period for any
Distribution Date on or prior to the Distribution Date occurring in January
2005, the lesser of (i) $85,000,000 and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans. For the Accrual Period for each Distribution Date
after the January 2005 Distribution Date, the Class A-IO Notional Balance will
be zero. For federal income tax purposes, however, the Class A-IO Certificates
will not have a notional balance, but the Class A-IO Current Interest will be
deemed to be to (i) for any Distribution Date from February 2003 through January
2004, 100% of the interest payable on REMIC II Regular Interest MT-IO-1 and
REMIC II Regular Interest MT-IO-2, (ii) for any Distribution Date from February
2004 through January 2005, 100% of the interest payable on REMIC II Regular
Interest MT-IO-2 and (iii) for and Distribution Date thereafter, 0.00%.
CLASS A-IO PASS-THROUGH RATE: For each Accrual Period: (i) for
any Distribution Date on or prior to the January 2004 Distribution Date, 1.00%
per annum, (ii) for any Distribution Date from and including the February 2004
Distribution Date through the January 2005 Distribution Date, 0.50% per annum,
and (iii) for any Distribution Date after the January 2005 Distribution Date, 0%
per annum.
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, Class R-II Interest and the Class R-III
Interest, and evidencing an interest designated as a "residual interest" in
REMIC I, REMIC II and REMIC III for purposes of the REMIC Provisions.
CLASS A-R CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class A-R Certificates.
CLASS A-R PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (A) $100 over (B) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04.
CLASS B-1 CERTIFICATE: Any Certificate designated as a "Class
B-1 Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
CLASS B-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class B-1 Certificates.
8
CLASS B-1 CURRENT INTEREST: For any Distribution Date, the
interest accrued during the related Accrual Period at the Class B-1 Pass-Through
Rate on the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
CLASS B-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class B-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class B-1
Certificates with respect to interest on such prior Distribution Dates.
CLASS B-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class B-1 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
B-1 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
B-1 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest accrued on the Class B-1 Certificates at the Net
Rate Cap for such Distribution Date and (B) the Class B-1 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class B-1 Pass-Through Rate
(without giving effect to the Net Rate Cap up to the Weighted Maximum Rate Cap).
CLASS B-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 3.500% per annum and, for any Distribution Date after
the Optional Termination Date, 5.250% per annum.
CLASS B-1 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class B-1 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.
CLASS B-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class A-1 Certificate
Principal Balance (after taking into account distribution of the Class A-1
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), and
(D) the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 99.00% 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 after giving effect to
distributions to be made on that Distribution Date minus the OC Floor; provided,
however, that after the Class A-1 Certificate Principal Balance, the Class M-1
Certificate Principal Balance and the Class M-2 Certificate Principal Balance
have been reduced to zero, the Class B-1 Principal Distribution Amount for
9
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 plus any amount previously distributed
with respect to interest for such Class that is recovered as a voidable
preference by a trustee in bankruptcy.
CLASS C NOTIONAL AMOUNT: The aggregate amount of the
Uncertificated Principal Balance of the REMIC II Regular Interests other than
REMIC II Regular Interest MT-P, REMIC II Regular InterestMT-IO-1 and REMIC II
Regular Interest MT-IO-2.
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 (F) below, and the
denominator of which is the Uncertificated Principal Balance of the REMIC II
Regular Interests (other than REMIC II Regular Interest MT-P). 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 II Pass-Through Rate for
REMIC II Regular Interest MT-A1 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest MT-A1;
(B) the Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest MT-M1 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC I Regular
Interest MT-M1;
(C) the Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest MT-M2 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest MT-M2;
(D) the Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest MT-B1 minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest MT-B1;
(E) the Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest MT-ZZ minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest MT-ZZ; and
(F) 100% of the interest on REMIC II Regular Interest
MT-P
10
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, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
CLASS M-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class M-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class M-1
Certificates with respect to interest.
CLASS M-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class M-1 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
M-1 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
M-1 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest 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 up to the Weighted Maximum Rate Cap).
CLASS M-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.920% per annum and, for any Distribution Date after
the Optional Termination Date, 1.380% per annum.
CLASS M-1 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class M-1 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of (A) the Class A-1 Certificate
Principal Balance (after taking into account distribution of the Class A-1
Principal Distribution Amount 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) 88.00% 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 after giving effect to distributions to be made on that
Distribution Date minus the OC Floor; provided, however, that after the Class
A-1 Certificate Principal Balance, the Class M-2 Certificate Principal Balance
and the Class B-1
11
Certificate Principal Balance have been reduced to zero, the Class M-1 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class
M-2 Certificate" on the face thereof, in the form of Exhibit A-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, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
CLASS M-2 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class M-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class M-2
Certificates with respect to interest on such prior Distribution Dates.
CLASS M-2 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class M-2 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
M-2 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
M-2 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest 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 up to the Weighted Maximum Rate Cap).
CLASS M-2 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 2.000% per annum and, for any Distribution Date after
the Optional Termination Date, 3.000% per annum.
CLASS M-2 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class M-2 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Class A-1 Certificate
Principal Balance (after taking into account distribution of the Class A-1
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
12
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) 94.00% 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 after giving effect to distributions to
be made on that Distribution Date minus the OC Floor; provided, however, that
after the Class A-1 Certificate Principal Balance, the Class M-1 Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have been
reduced to zero, the Class M-2 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
CLASS 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 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 R-I INTEREST: The uncertificated Residual Interest in
REMIC I.
CLASS R-II INTEREST: The uncertificated Residual Interest in
REMIC II.
CLASS R-III INTEREST: The uncertificated Residual Interest in
REMIC III.
CLOSING DATE: January 28, 2003.
CO-TRUSTEE: BNY Western Trust Company, a California banking
corporation, not in its individual capacity, but solely in its capacity as
co-trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party.
CODE: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
COMPENSATING INTEREST: With respect to any Distribution Date,
an amount equal to one-half of the Servicing Fee, to be applied to the interest
portion of any Prepayment Interest Shortfall on the Mortgage Loans pursuant to
Section 4.02 hereof.
13
CONFIRMATION AND AGREEMENT: : The Confirmation and Agreement
dated January 28, 2003, reference number 3017354, evidencing the Cap Contract.
CORPORATE TRUST OFFICE: The designated office of the Trustee
in the State of New York where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (Attention: Corporate Trust MBS Administration),
telephone: (000) 000-0000, facsimile: (000) 000-0000.
CORRESPONDING CERTIFICATE: With respect to each REMIC II
Regular Interest set forth below, the Regular Certificate set forth in the table
below:
REMIC II REGULAR INTEREST REMIC III CERTIFICATE
------------------------- ---------------------
MT-A1 Class A-1
MT-IO-1 Class A-IO
MT-IO-2 Class A-IO
MT-M1 Class M-1
MT-M2 Class M-2
MT-B1 Class B-1
MT-P Class P
COVERED MORTGAGE LOAN: A mortgage loan listed on the Mortgage
Loan Schedule as being covered by the Mortgage Insurance Policy.
CURRENT INTEREST: With respect to (i) the Class A-1
Certificates, the Class A-1 Current Interest, (ii) the Class M-1 Certificates,
the Class M-1 Current Interest, (iii) the Class M-2 Certificates, the Class M-2
Current Interest, (iv) the Class B-1 Certificates, the Class B-1 Current
Interest and (v) the Class C Certificates, the Class C Current Interest.
CUMULATIVE LOSS TRIGGER EVENT: With respect to a Distribution
Date after the Stepdown Date exists if the aggregate amount of Realized Losses
on the Mortgage Loans from (and including) the Cut-off Date for each Mortgage
Loan to (and including) the last day of the related Due Period exceeds the
applicable percentage, for such Distribution Date, of the Cut-off Date Principal
Balance of the Mortgage Loans, as set forth below:
Distribution Date Percentage
----------------- ----------
February 2006-- January 2007..................... 1.45%
February 2007-- January 2008..................... 2.40%
February 2008-- January 2009..................... 3.00%
14
February 2009 and thereafter..................... 3.25%
CUT-OFF DATE: In the case of any Mortgage Loan, the later of
(x) January 1, 2003 and (y) the date of origination of such Mortgage Loan. When
used with respect to any Mortgage Loans "the Cut-off Date" shall mean the
related Cut-off Dates.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Actuarial Mortgage
Loan, the unpaid principal balance thereof as of the close of business on the
Cut-off Date after application of all payments of principal due on or prior to
the Cut-off Date, whether or not received, and all Principal Prepayments
received on or prior to the Cut-off Date, but without giving effect to any
installments of principal received in respect of Due Dates after the Cut-off
Date. As to any Simple Interest Mortgage Loan, the unpaid principal balance
thereof as of the close of business on the Cut-off Date after application of all
payments of principal made on or prior to the Cut-off Date and all Principal
Prepayments received on or prior to the Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.
DEFINITIVE CERTIFICATES: As defined in Section 5.06.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under such Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.
DELAY DELIVERY MORTGAGE LOANS: The Mortgage Loans identified
on the schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for
which all or a portion of a related Mortgage File is not delivered to the
Co-Trustee on or prior to the Closing Date. The Depositor shall deliver (or
cause delivery of) the Mortgage Files to the Co-Trustee: (A) with respect to at
least 50% of the Mortgage Loans, not later than the Closing Date, (B) with
respect to at least an additional 40% of the Mortgage Loans, not later than 20
days after the Closing Date, and (C) with respect to the remaining 10% of the
Mortgage Loans, not later than 30 days after the Closing Date. To the extent
that the Seller shall be in possession of any Mortgage Files with respect to any
Delay Delivery Loan, until delivery to of such Mortgage File to the Co-Trustee
as provided in Section 2.01, the Seller shall hold such files as agent and in
trust for the Trustee.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
15
DELINQUENCY TRIGGER EVENT: With respect to any Distribution
Date after the Stepdown Date exists if the product of (i) 1.33 times (ii) the
fraction (expressed as a percentage) of (A) the numerator of which is the
aggregate Stated Principal Balance for such Distribution Date of all Mortgage
Loans 60 or more days delinquent as of the close of business on the last day of
the calendar month preceding such Distribution Date (including Mortgage Loans in
foreclosure and REO Properties) and (B) the denominator of which is the
aggregate Stated Principal Balance for such Distribution Date of all Mortgage
Loans, equals or exceeds the related Required Percentage.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage Loan is "30
days delinquent" if such payment has not been received by the close of business
on the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
DENOMINATION: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the "Initial Notional Amount of this Certificate" or, if neither
of the foregoing, the Percentage Interest appearing on the face thereof.
DEPOSITOR: CWABS, Inc., a Delaware corporation, or its
successor in interest.
DEPOSITORY: The initial Depository shall be The Depository
Trust Company ("DTC"), the nominee of which is Cede & Co., or any other
organization registered as a "clearing agency" pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. The Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
O.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
DETERMINATION DATE: With respect to any Distribution Date, the
15th day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
16
DISTRIBUTION ACCOUNT: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.05 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". 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 February 2003.
DUE DATE: With respect to any Mortgage Loan and Due Period,
the due date for scheduled payments of interest and/or principal on that
Mortgage Loan occurring in such Due Period as provided in the related Mortgage
Note.
DUE PERIOD: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Xxxxx'x is not a Rating Agency) are rated by each Rating
Agency in one of its two highest long-term and its highest short-term rating
categories respectively, at the time any amounts are held on deposit therein, or
(ii) an account or accounts in a depository institution or trust company in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders have a claim with respect to the funds in
such account or a perfected first 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.
17
ERISA-QUALIFYING UNDERWRITING: A best efforts or firm
commitment underwriting or private placement that meets the applicable
requirements of the Underwriter's Exemption.
ERISA-RESTRICTED CERTIFICATES: The Class A-R, Class M-1, Class
M-2, Class B-1, 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)(v),
and (ii) the amount remaining after the distribution of principal to
Certificateholders for such Distribution Date pursuant to Section 4.04(d)(i)(B)
or 4.04(d)(ii)(E).
EXCESS PROCEEDS: With respect to any Liquidated Loan, any
Liquidation Proceeds that are in excess of the sum of (i) the unpaid principal
balance of such Liquidated Loan as of the date of such liquidation plus (ii)
interest at the Mortgage Rate from the Due Date as to which interest was last
paid or advanced to Certificateholders (and not reimbursed to the Master
Servicer) up to the Due Date in the month in which such Liquidation Proceeds are
required to be distributed on the Stated Principal Balance of such Liquidated
Loan outstanding during each Due Period as to which such interest was not paid
or advanced.
EXPENSE FEE RATE: The sum of (i) the Servicing Fee Rate, (ii)
the Trustee Fee Rate and (iii) with respect to a Covered Mortgage Loan, the
Mortgage Insurance Premium Rate.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the lesser of (1) the Overcollateralization Deficiency Amount
for such Distribution Date and (2) the Excess Cashflow for such Distribution
Date available for payment thereof pursuant to Section 4.04(e)(i).
XXXXXX XXX: The Federal National Mortgage Association, a
federally chartered and privately owned corporation organized and existing under
the Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
FIXED RATE MORTGAGE LOANS: The Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life
of the related Mortgage, including any Mortgage Loans delivered in replacement
thereof.
XXXXXXX MAC: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
18
GROSS MARGIN: The percentage set forth in the related Mortgage
Note for the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth in
the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.
INDEX: As to any Adjustable Rate Mortgage Loan on any
Adjustment Date related thereto, the index for the adjustment of the Mortgage
Rate set forth as such in the related Mortgage Note, such index in general being
the average of the London interbank offered rates for six-month U.S. dollar
deposits in the London market, as set forth in THE WALL STREET JOURNAL or some
other source generally accepted in the residential mortgage loan origination
business and specified in the related Mortgage Note, as most recently announced
as of either 45 days prior to, or the first business day of the month
immediately preceding the month of, such Adjustment Date or, if the Index ceases
to be published in the original source or becomes unavailable for any reason,
then the Index shall be a new index selected by the Master Servicer, based on
comparable information.
INITIAL ADJUSTMENT DATE: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of such Mortgage Loan.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate (other than the Class A-IO Certificates), the Certificate Principal
Balance of such Certificate or any predecessor Certificate on the Closing Date.
INITIAL MORTGAGE RATE: As to each Mortgage Loan, the Mortgage
Rate in effect prior to the Initial Adjustment Date.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage
Loans pursuant to any Required Insurance Policy or any other insurance policy
covering a Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under the Mortgage, the Master Servicer or the trustee under the deed
of trust and are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, in each case other than any amount included in such Insurance Proceeds
in respect of Insured Expenses.
INSURED EXPENSES: Expenses covered by a Required Insurance
Policy or any other insurance policy with respect to the Mortgage Loans.
INTEREST CARRY FORWARD AMOUNT: With respect to (i) the Class
A-1 Certificates, the Class A-1 Interest Carry Forward Amount, (ii) the Class
M-1 Certificates, the Class M-1 Interest Carry Forward Amount, (iii) the Class
M-2 Certificates, the Class M-2 Interest Carry Forward Amount and (iv) the Class
B-1 Certificates, the Class B-1 Interest Carry Forward Amount.
INTEREST DETERMINATION DATE: With respect to the Certificates
(other than the Class A-IO, Class A-R, Class C and Class P Certificates) for the
first Accrual Period, January 24,
19
2003. With respect to the Certificates (other than the Class A-IO, Class A-R,
Class C and Class P Certificates) and any Accrual 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 (1) the Trustee Fee for the Mortgage Loans for such
Distribution Date and less (2) the premium payable under the Mortgage Insurance
Policy for such Distribution Date.
INTEREST REMITTANCE AMOUNT: With respect to the Mortgage Loans
and any Master Servicer Advance Date, the sum, without duplication, of (i) all
scheduled interest collected during the related Due Period with respect to the
Mortgage Loans less the related Servicing Fee, (ii) 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 with respect to the Mortgage Loans
collected during the related Due Period (to the extent such Liquidation Proceeds
relate to interest), and (v) for the Master Servicer Advance Date in February
2003, the Seller Shortfall Interest Requirement for such Master Servicer Advance
Date (if any), less all Nonrecoverable Advances relating to interest reimbursed
during the related Due Period.
LATEST POSSIBLE MATURITY DATE: The Distribution Date in March
2033.
LIBOR BUSINESS DAY: Any day on which banks in the City of
London, England and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.
LIQUIDATED LOAN: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation.
LIQUIDATION PROCEEDS: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Advances, Servicing Fees and Servicing
Advances.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage,
the numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
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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 II Regular Interest (other than
REMIC II Regular Interest MT-AA, REMIC II Regular Interest MT-IO-1 and REMIC II
Regular Interest MT-IO-2), with the rates on each such REMIC II Regular Interest
subject to a cap equal to the Pass-Through Rate for the Corresponding Class for
such REMIC II Regular Interest, and the rate on REMIC II Regular Interest MT-ZZ
subject to a cap of zero for purposes of this calculation.
MASTER SERVICER: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its capacity as master
servicer hereunder.
MASTER SERVICER ADVANCE DATE: As to any Distribution Date,
1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.
MAXIMUM RATE: With respect to any Accural Period and the
related Distribution Date and any Class of Certificates (other than the Class
A-IO, Class A-R and Class P Certificates), is the sum of,
(a) the Weighted Maximum Rate Cap minus THE PRODUCT
OF (i) the Class A-IO Pass-Through Rate and (ii) a fraction (expressed as a
percentage), (x) the numerator of which is equal to the Class A-IO Notional
Balance and (y) the denominator of which is equal to the aggregate Stated
Principal Balance of the Mortgage Loans, as of the last day of the related Due
Period, adjusted to an effective rate reflecting the calculation of interest on
the basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year, and
(b) for purposes of calculating any Net Rate
Carryover on any Class of Certificates (other than the Class A-IO, Class A-R and
Class P Certificates) that may be entitled thereto, a fraction, expressed as a
percentage, the numerator of which is the product of the aggregate amount
received in respect of the Cap Contract for such Distribution Date MULTIPLIED BY
twelve, and the denominator of which is the aggregate Certificate Principal
Balance of the Class A-1, Class M-1, Class M-2 and Class B-1 Certificates on
such Distribution Date (prior to giving effect to distributions on such
Distribution Date).
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan registered with MERS on
the MERS(R)System.
MERS(R) SYSTEM: The system of recording transfers of mortgages
electronically maintained by MERS.
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MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.
MOM LOAN: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
MONTHLY STATEMENT: The statement delivered to the
Certificateholders pursuant to Section 4.05.
MOODY'S: Xxxxx'x Investors Service, Inc. or any successor
thereto.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest in an estate in
fee simple in real property securing a Mortgage Note.
MORTGAGE INSURANCE POLICY: The mortgage insurance policy
issued by Mortgage Guarantee Insurance Corporation with respect to certain
mortgage loans identified in the Mortgage Loan Schedule.
MORTGAGE INSURANCE PREMIUM: The premium payable on the
Mortgage Insurance Policy on each Distribution Date, plus the amount of any
Kentucky or West Virginia state taxes payable by the Co-Trustee as a result of
the payment of such premium in each case as provided by the Mortgage Insurance
Policy.
MORTGAGE INSURANCE PREMIUM RATE: With respect to a Covered
Mortgage Loan and any Distribution Date, the per annum rate equal to a quotient
(expressed as a percentage), the numerator of which is equal to the portion of
the Mortgage Insurance Premium payable with respect to such Distribution Date
attributable to such Covered Mortgage Loan times twelve and the denominator of
which is equal to the Stated Principal Balance of such Covered Mortgage Loan.
MORTGAGE FILE: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Co-Trustee to be added to the Mortgage File pursuant to this
Agreement.
MORTGAGE LOAN: Each of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof as from time to time
are held as a part of the Trust Fund (including any REO Property), the mortgage
loans so held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property. Any
Mortgage Loan subject to repurchase by the Seller or Master Servicer as provided
in this Agreement, shall continue to be a Mortgage Loan hereunder until the
Purchase Price with respect thereto has been paid to the Trust Fund.
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MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the deletion of Deleted
Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, attached hereto as Exhibit
F-1, setting forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Appraised Value;
(iii) the Initial Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date;
(ix) the Loan-to-Value Ratio at origination;
(x) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(xi) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling (b) a condominium
unit or (c) a two- to four-unit residential property;
(xii) a code indicating whether the Mortgage Loan is a Simple
Interest Mortgage Loan;
(xiii) a code indicating whether the Mortgage Loan is a
Covered Mortgage Loan and the rate for the Mortgage Insurance
Premium, if applicable;
(xiv) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
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(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan.
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE POOL: The aggregate of the Mortgage Loans identified
in the Mortgage Loan Schedule.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note from time to time.
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 Accrual Period, a per annum rate equal
to (i) the weighted average Adjusted Net Mortgage Rate of the Mortgage Loans
minus (ii) THE PRODUCT OF (a) the Class A-IO Pass-Through Rate for such Accrual
Period and (b) a fraction (expressed as a percentage), (x) the numerator of
which is equal to the Class A-IO Notional Balance for such Accrual Period and
(y) the denominator of which is equal to the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period, adjusted to
an effective rate reflecting the calculation of interest on the basis of the
actual number of days elapsed during the related Accrual Period and a 360-day
year.
NET RATE CARRYOVER: With respect to any Distribution Date, an
amount equal to the sum of (i) the Class A Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class M-1 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class M-2 Interest Carryover Amount
for such Distribution Date (if any), and (iv) the Class B-1 Interest Carryover
Amount for such Distribution Date (if any); provided that when the term Net Rate
Carryover is used with respect to one Class of Certificates (other than the
Class A-IO, Class A-R, Class C and Class P Certificates), it shall mean such
carryover amount listed in clauses (i), (ii), (iii) or (iv) as applicable, with
the same Class designation. The Class A-IO, 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.
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NONRECOVERABLE ADVANCE: Any portion of an Advance previously
made or proposed to be made by the Master Servicer that, in the good faith
judgment of the Master Servicer, will not or, in the case of a current
delinquency, would not, be ultimately recoverable by the Master Servicer from
the related Mortgagor, related Liquidation Proceeds or otherwise.
OC FLOOR: For any Distribution Date, 0.50% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.
OFFERED CERTIFICATES: The Class A-1, Class A-IO, Class A-R,
Class M-1, Class M-2 and Class B-1 Certificates.
OFFICER'S CERTIFICATE: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman of the Board,
the President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant
Treasurers or Assistant Secretaries of the Depositor, (ii) in the case of the
Master Servicer, (x) signed by the President, an Executive Vice President, a
Vice President, an Assistant Vice President, the Treasurer, or one of the
Assistant Treasurers or Assistant Secretaries or Countrywide GP, Inc., its
general partner, or (y) if provided for in this Agreement, signed by a Servicing
Officer, as the case may be, and delivered to the Depositor and the Trustee, as
the case may be, as required by this Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 1.81125% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period.
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
OPTIONAL TERMINATION: The termination of the Trust Fund
provided hereunder pursuant to the purchase of the Mortgage Loans pursuant to
the last sentence of Section 9.01 hereof.
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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 Master Servicer or
the sales price of such property or, in the case of a refinancing, on an
appraisal satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee
or delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee pursuant to this Agreement.
OUTSTANDING MORTGAGE LOAN: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a Liquidated
Loan, prior to the end of the related Prepayment Period.
OVERCOLLATERALIZED AMOUNT: For any Distribution Date, the
amount, if any, by which (x) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period exceeds (y) the
aggregate Certificate Principal Balance of the Offered Certificates (other than
the Class A-IO Certificates) as of such Distribution Date (after giving effect
to distributions in respect of the Principal Remittance Amount on such
Distribution Date).
OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount for such Distribution Date (after
giving effect to distributions in respect of the Principal Remittance Amount for
such Distribution Date).
OVERCOLLATERALIZATION TARGET AMOUNT: For any Distribution
Date, the OC Floor.
OWNERSHIP INTEREST: As to any Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
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PASS-THROUGH RATE: With respect to the Class A-1 Certificates,
the Class A-1 Pass-Through Rate; with respect to the Class A-IO Certificates,
the Class A-IO Pass-Through Rate; with respect to the Class M-1 Certificates,
the Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class B-1 Certificates, the
Class B-1 Pass-Through Rate; with respect to the Class IO Certificate, the Class
IO Pass-Through Rate and with respect to the Class 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 or
Notional Balance, as applicable, represented by such Certificate and the
denominator of which is the aggregate Certificate Principal Balance or Notional
Balance, as applicable, 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
27
system, the commercial paper or long-term unsecured debt obligations of
such holding company, but only if Xxxxx'x is not a Rating Agency) are
then rated one of the two highest long-term and the highest short-term
ratings of each such Rating Agency for such securities, or such lower
ratings as each Rating Agency has confirmed in writing will not result
in the downgrading or withdrawal of the rating then assigned to the
Certificates by such Rating Agency;
(vi) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (v) above;
(vii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest long term ratings of each Rating Agency (except if the
Rating Agency is Moody's, such rating shall be the highest commercial
paper rating of S&P for any such securities) or such lower rating as
each Rating Agency has confirmed in writing will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by such Rating Agency;
(viii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term
rating by each Rating Agency or such lower rating as each Rating Agency
has confirmed in writing will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by such
Rating Agency;
(ix) short term investment funds sponsored by any trust
company or national banking association incorporated under the laws of
the United States or any state thereof which on the date of acquisition
has been rated by each Rating Agency in their respective highest
applicable rating category or such lower rating as each Rating Agency
has confirmed in writing will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by such
Rating Agency; and
(x) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any
Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
28
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer shall receive an Opinion of Counsel, at the expense of Master
Servicer, to the effect that such investment will not adversely affect the
status of any such REMIC as a REMIC under the Code or result in imposition of a
tax on any such REMIC. Permitted Investments that are subject to prepayment or
call may not be purchased at a price in excess of par.
PERMITTED TRANSFEREE: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in Section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trustor unless such Person has
furnished the transferor and the Trustee with a duly completed Internal Revenue
Service Form W-8ECI, and (vii) any other Person so designated by the Trustee
based upon an Opinion of Counsel that the Transfer of an Ownership Interest in a
Class A-R Certificate to such Person may cause the Trust Fund to fail to qualify
as a REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
PERSON: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
29
POOL STATED PRINCIPAL BALANCE: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.
PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Offered Certificates.
PREPAYMENT CHARGE: As to a Mortgage Loan, any charge paid by a
Mortgagor in connection with certain partial prepayments and all prepayments in
full made within the related Prepayment Charge Period, the Prepayment Charges
with respect to each applicable Mortgage Loan being identified in the Prepayment
Charge Schedule.
PREPAYMENT CHARGE PERIOD: As to any Mortgage Loan the period
of time during which a Prepayment Charge may be imposed.
PREPAYMENT CHARGE SCHEDULE: As of any date, the list of
Prepayment Charges included in the Trust Fund on that date, (including the
prepayment charge summary attached thereto). The Prepayment Charge Schedule
shall contain the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan account number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination in which the related
Mortgage Property is located;
(iv) the first date on which a Monthly Payment is or was
due under the related Mortgage Note;
(v) the term of the Prepayment Charge;
(vi) the original principal amount of the related Mortgage
Loan; and
(vii) the Cut-off Date Principal Balance of the related
Mortgage Loan.
The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance with this Agreement.
PREPAYMENT INTEREST EXCESS: With respect to any Distribution
Date, for each Actuarial Mortgage Loan that was the subject of a Principal
Prepayment during the period from the second day through the fifteenth day of
the month of such Distribution Date, any payment of interest received in
connection therewith (net of any applicable Servicing Fee) representing interest
accrued for any portion of such month of receipt.
PREPAYMENT INTEREST SHORTFALL: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a Principal Prepayment in
30
full, or that became a Liquidated Loan during (i) the Prepayment Period with
respect to a Simple Interest Mortgage Loan or (ii) the period from the sixteenth
day of the month preceding such Distribution Date, or in the case of the first
Distribution Date, from January 1, 2003 through and including the last day of
the month preceding such Distribution Date (in each case, other than a Principal
Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof), the amount, if any, by which (i)
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such Mortgage Loan immediately prior to such prepayment (or
liquidation) or in the case of a partial Principal Prepayment on the amount of
such prepayment (or liquidation proceeds) exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment or such
liquidation proceeds.
PREPAYMENT PERIOD: As to any Distribution Date, (i) with
respect to Actuarial Mortgage Loans, the period beginning with the opening of
business on the sixteenth day of the calendar month preceding the month in which
such Distribution Date occurs (or, with respect to the first Distribution Date,
the period from January 1, 2003) and ending on the close of business on the
fifteenth day of the month in which such Distribution Date occurs or (ii) with
respect to Simple Interest Mortgage Loans, the calendar month preceding such
Distribution Date.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the sum of (i) the Principal Remittance Amount for such
Distribution Date, (ii) the funds, if any, withdrawn from the Principal Reserve
Fund and deposited in the Distribution Account pursuant to Section 3.05(e), and
(iii) the Extra Principal Distribution Amount for such Distribution Date
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery
of (or proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.
PRINCIPAL REMITTANCE AMOUNT: (a) The sum, without duplication,
of: (i) the scheduled principal collected with respect to the Actuarial Mortgage
Loans during the related Due Period or advanced on or before the related Master
Servicer Advance Date, (ii) prepayments collected in the related Prepayment
Period, with respect to the Actuarial Mortgage Loans and, with respect to the
Simple Interest Mortgage Loans, all payments received from the borrower which
are allocable to principal, (iii) the Stated Principal Balance of each Mortgage
Loan that was repurchased by the Seller or purchased by the Master Servicer,
(iv) the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans is less than the aggregate unpaid principal balance
of any Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds collected
during the related Due Period (to the extent such Liquidation Proceeds related
to principal); less (b) all non-recoverable Advances relating to principal and
certain expenses reimbursed during the related Due Period.
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PRINCIPAL RESERVE FUND: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 3.05(e) in the name
of the Trustee for the benefit of the Certificateholders and designated "The
Bank of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". Funds in the Principal Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement and shall not be a part of any REMIC created under this
Agreement. Any investment income earned from Permitted Investments made with
funds in the Principal Reserve Fund will be for the account of the Seller.
PRIVATE CERTIFICATES: The Class C Certificates and Class P
Certificates.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated January
23, 2003, relating to the public offering of the Offered Certificates offered
thereby.
PUD: A Planned Unit Development.
PURCHASE PRICE: With respect to any Mortgage Loan (x) required
to be (1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased by
the Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer
has a right to purchase pursuant to Section 3.12 hereof, an amount equal to the
sum of (i) 100% of the unpaid principal balance (or, if such purchase or
repurchase, as the case may be, is effected by the Master Servicer, the Stated
Principal Balance) of the Mortgage Loan as of the date of such purchase and (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such purchase
or repurchase, as the case may be, is effected by the Master Servicer, at the
Net Mortgage Rate) from (a) the date through which interest was last paid by the
Mortgagor (or, if such purchase or repurchase, as the case may be, is effected
by the Master Servicer, the date through which interest was last advanced and
not reimbursed by the Master Servicer) to (b) the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders.
RATING AGENCY: Each of Xxxxx'x and S&P. If any such
organization or its successor is no longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee. References herein to a given rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
REALIZED LOSS: With respect to each Liquidated Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of such Liquidated Loan as of the date of such liquidation, minus (ii)
the Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, and
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(ii) if the principal amount due under the related Mortgage Note has been
reduced, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation plus any
reduction in the interest component of the Scheduled Payments. With respect to
each Mortgage Loan that has become the subject of a Debt Service Reduction and
any Distribution Date, the amount, if any, by which the related Scheduled
Payment was reduced.
RECORD DATE: With respect to any Distribution Date and the
Certificates, other than the Class A-IO, 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-IO, Class A-R, Class C and Class P Certificates, the last Business
Day of the month preceding the month of a Distribution Date.
REFERENCE BANK RATE: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding balance of the Class A-1, Class M-1, Class M-2 and Class B-1
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%) of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York City time, on such date for loans in U.S. dollars to leading European
banks for a period of one month in amounts approximately equal to the
outstanding balance of the Class A-1, Class M-1, Class M-2 and Class B-1
Certificates on such Interest Determination Date.
REFERENCE BANKS: Barclays Bank PLC, Deutsche Bank and NatWest,
N.A., provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.
REFINANCING MORTGAGE LOAN: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
REGULAR CERTIFICATE: Any Offered Certificate other than a
Class A-R Certificate.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
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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 January 2003) 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.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-1,
REMIC I Regular Interest LT-IO and REMIC I Regular Interest LT-P.
REMIC I REGULAR INTEREST LT-1: 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-IO: 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 II: 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 the REMIC I Regular Interests.
REMIC II 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 II Regular Interests (other than
REMIC II Regular interest MT-IO-1 and MT-IO-2) then outstanding and (ii) the
Uncertificated Pass-Through Rate for REMIC II Regular Interest MT-AA minus the
Marker Rate, divided by (b) 12.
REMIC II OVERCOLLATERALIZED AMOUNT: With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
the REMIC II Regular Interests minus (ii) the Uncertificated Principal Balances
of the REMIC II Regular Interests (other than REMIC II Regular Interests MT-AA,
REMIC II Regular Interest MT-ZZ, REMIC II Regular Interest MT-IO-1 and REMIC II
Regular Interest MT-IO-2), in each case as of such date of determination.
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REMIC II OVERCOLLATERALIZATION TARGET AMOUNT:1% of the
Overcollateralization Target Amount.
REMIC II 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 II Regular Xxxxxxxxx XX-X0, MT-M1, MT-M2 and MT-B1
and the denominator of which is the sum of the Uncertificated Principal Balances
of REMIC II Regular Xxxxxxxxx XX-X0, MT-M1, MT-M2, MT-B1 and MT-ZZ.
REMIC II REGULAR INTERESTS: REMIC II Regular Interest MT-AA,
REMIC II Regular Interest MT-A1, REMIC II Regular Interest MT-M1, REMIC II
Regular Interest MT-M2, REMIC II Regular Interest MT-B1, REMIC I Regular
Interest MT-ZZ, REMIC II Regular Interest MT-IO-1, REMIC II Regular Interest
MT-IO-2 and REMIC I Regular Interest MT-X.
XXXXX XX REGULAR INTEREST MT-AA: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II REGULAR XXXXXXXX XX-X0: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II REGULAR INTEREST MT-M1: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II REGULAR INTEREST MT-M2: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II REGULAR INTEREST MT-B1: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II REGULAR INTEREST MT-ZZ: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated
35
Principal Balance, that bears interest at the related Uncertificated REMIC II
Pass-Through Rate, and that has such other terms as are described herein.
REMIC II REGULAR INTEREST MT-P: A regular interest in REMIC II
that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II REGULAR INTEREST MT-IO-1: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial notional amount
equal to the related Uncertificated Notional Amount, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other terms
as are described herein.
REMIC II REGULAR INTEREST MT-IO-2: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial notional amount
equal to the related Uncertificated Notional Amount, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other terms
as are described herein.
REMIC II REGULAR INTEREST MT-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 II Regular Interest MT-ZZ and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC II
Regular Interest MT-ZZ over (y) the REMIC II Overcollateralized Amount, in each
case for such Distribution Date, over (ii) Uncertificated Accrued Interest on
REMIC II Regular Xxxxxxxxx XX-X0, MT-M1, MT-M2 and MT-B1, with the rate on each
such REMIC II Regular Interest subject to a cap equal to the Pass-Through Rate
on the Corresponding Class for the purpose of this calculation.
REMIC III: 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 the REMIC II Regular Interests.
REMIC III REGULAR CERTIFICATES: Any of the Class A-1, Class
A-IO, Class M-1, Class M-2, Class C or Class P 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.
REO PROPERTY: A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
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REPLACEMENT MORTGAGE LOAN: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan, which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit N, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not less than 90% of the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) with respect to any 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) be a Covered Mortgage Loan if the Deleted
Mortgage Loan was a Covered Mortgage Loan, 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
Master Servicer to the Trustee, substantially in the form of Exhibits M and N,
as appropriate.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement, including, with respect to the Covered Mortgage Loans, the
Mortgage Insurance Policy.
REQUIRED PERCENTAGE: With respect to any Distribution Date
after the Stepdown Date, is equal to a fraction (expressed as a percentage) of
(x) the excess of (I) the aggregate Stated Principal Balance of the Mortgage
Loans for the preceding Distribution Date over (II) the Certificate Principal
Balance of the most senior Class of the Certificates outstanding as of the
preceding Master Servicer Advance Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for the preceding Distribution Date.
RESPONSIBLE OFFICER: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such
37
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
S&P: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or any successor thereto.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.
SECONDARY CARRYOVER RESERVE FUND DEPOSIT: With respect to any
Distribution Date, an amount equal to the excess of (i) $5,000 over (ii) the
amount of funds on deposit in the Carryover Reserve Fund (after giving effect to
all other deposits to and withdrawals from the Carryover Reserve Fund on such
Distribution Date).
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: Countrywide Home Loans, Inc., a New York corporation,
and its successors and assigns, in its capacity as seller of the Mortgage Loans
to the Depositor.
SELLER SHORTFALL INTEREST REQUIREMENT: For the Master Servicer
Advance Date in February 2003, 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.
SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations hereunder, including, but not limited to,
the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of any REO Property and (iv) compliance
with the obligations under Section 3.10.
SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Servicing Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period covered by such payment of interest.
SERVICING FEE RATE: With respect to each Mortgage Loan, 0.50%
per annum.
SERVICING OFFICER: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Master Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be amended.
SIMPLE INTEREST METHOD: The method of allocating a payment to
principal and interest pursuant to which the portion of such payment that is
allocated to interest is equal to the
38
product of the fixed rate of interest multiplied by the unpaid principal balance
multiplied by the period of time elapsed since the preceding payment of interest
was received and divided by either 360 or 365, as specified in the related
Mortgage Note, and the remainder of such payment is allocated to principal.
SIMPLE INTEREST MORTGAGE LOAN: Any Mortgage Loan under which
the portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid principal balance of
the Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due (with respect to Actuarial Mortgage
Loans) or actually paid (with respect to Simple Interest Mortgage Loans) on or
prior to such date and irrespective any delinquency in payment by the related
mortgagor with respect to Actuarial Mortgage Loans, and (ii) as of any
Distribution Date, the Stated Principal Balance of the Mortgage Loan as of its
Cut-off Date, minus the sum of (a) the principal portion of (i) for the
Actuarial Mortgage Loans, the Scheduled Payments (x) due with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date and
(y) that were received by the Master Servicer as of the close of business on the
Determination Date related to such Distribution Date or with respect to which
Advances were made as of the Master Servicer Advance Date related to such
Distribution Date, or (ii) for Simple Interest Mortgage Loans, actual payments
due with respect to the Mortgage Loans on or prior to the end of the most recent
Due Period that were received by the Master Servicer as of the close of business
on the Determination Date related to such Distribution Date, (b) all Principal
Prepayments with respect to such Mortgage Loan received by the Master Servicer
during each Prepayment Period ending prior to such Distribution Date, and (c)
all Liquidation Proceeds collected with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date, to the extent applied by
the Master Servicer as recoveries of principal in accordance with Section 3.12.
The Stated Principal Balance of any Mortgage Loan that becomes a Liquidated Loan
will be zero on the Distribution Date following the Due Period in which such
Mortgage Loan becomes a Liquidated Loan. References herein to the Stated
Principal Balance the Mortgage Loans at any time shall mean the aggregate Stated
Principal Balances of all Mortgage Loans in the Trust Fund as of such time.
STEPDOWN DATE: The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Senior
Certificates (other than the Cass A-IO Certificates) is reduced to zero and (ii)
the later to occur of (a) the Distribution Date in February 2006 or (b) the
first Distribution Date on which the Class A-1 Certificate Principal Balance is
less than or equal to 81.00% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date, after giving effect to all
distributions on the Class A-1 Certificates on such Distribution Date.
SUBORDINATE CERTIFICATES: The Class M-1, Class M-2 and Class
B-1 Certificates.
39
SUBSERVICER: As defined in Section 3.02(a).
SUBSERVICING AGREEMENT: As defined in Section 3.02(a).
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such
term pursuant to Section 2.03(c).
SUBSTITUTION AMOUNT: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(c), the excess of (x) the principal balance
of the Mortgage Loan that is substituted for, over (y) the principal balance of
the related substitute Mortgage Loan, each balance being determined as of the
date of substitution.
TAX MATTERS PERSON: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this person
shall be the Trustee.
TAX MATTERS PERSON CERTIFICATE: The Class A-R Certificate with
a Denomination of $0.05.
THREE-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a
Mortgage Rate that is fixed for 36 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
TRANSFER: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
TRIGGER EVENT: With respect to any Distribution Date after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger
Event.
TRUST FUND: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received on
or with respect thereto on and after the Cut-off Date to the extent not applied
in computing the Cut-off Date Principal Balance thereof, exclusive of interest
not required to be deposited in the Certificate Account pursuant to Section
3.05(b)(ii); (ii) the Certificate Account, the Distribution Account, the
Carryover Reserve Fund, the Principal Reserve Fund, and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (iii) the Cap
Contract; (iv) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (v) the mortgagee's
rights under any insurance policies with respect to the Mortgage Loan; and (vi)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.
TRUSTEE: The Bank of New York, a New York banking corporation,
not in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors
40
may be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
TRUSTEE FEE: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance for such Distribution Date.
TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.009%
per annum.
TWO-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a
Mortgage Rate that is fixed for 24 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
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, any Prepayment Interest
Shortfalls (to the extent not covered by Compensating Interest) relating to the
Mortgage Loans for any Distribution Date shall be allocated first to REMIC I
Regular Interest LT-I and REMIC I Regular Interest LT-P and then, to REMIC I
Regular Interest LT-IO, in each case 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. For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date, any
Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) relating to the Mortgage Loans for any Distribution Date shall be
allocated first, to Uncertificated Accrued Interest payable to REMIC II Regular
Interest MT-AA and REMIC II Regular Interest MT-ZZ up to an aggregate amount
equal to the REMIC II Interest Loss Allocation Amount, 98% and 2%, respectively,
and thereafter any remaining Prepayment Interest Shortfalls (to the extent not
covered by Compensating Interest) relating to the Mortgage Loans for any
Distribution Date shall be allocated among REMIC II Regular Interests MT-AA,
MT-A1, MT-M1, MT-M2, MT-B1, MT-ZZ, MT-IO-1 and MT-IO-2, pro rata based on, and
to the extent of, Uncertificated Accrued Interest, as calculated without
application of this sentence.
UNCERTIFICATED NOTIONAL AMOUNT: With respect to any
Distribution Date and REMIC II Regular Interest MT-IO-1 and REMIC II Regular
Intetest MT-IO-2, an amount equal to the Uncertificated Principal Balance of RE
MIC I Regular Interest LT-IO.
UNCERTIFICATED PASS-THROUGH RATE: The Uncertificated REMIC I
Pass-Through Rate or the Uncertificated REMIC II Pass-Through Rate.
UNCERTIFICATED PRINCIPAL BALANCE: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal
41
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 any
Distribution Date, a per annum rate equal to the weighted average Adjusted Net
Mortgage Rate.
UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to any
Distribution Date, a per annum rate equal:
(a) With respect to REMIC II Regular Interest MT-AA, REMIC II
Regular Interest MT-A1, REMIC II Regular Interest MT-M1, REMIC II Regular
Interest MT-M2, REMIC II Regular Interest MT-B1, REMIC II Regular Interest MT-ZZ
and REMIC II Regular Interest MT-P, and (i) the first 24 Distribution Dates, a
per annum rate equal to equal to the weighted average of (x) with respect to
REMIC I Regular Interest LT-1 and REMIC I Regular Interest LT-P, the
Uncertificated REMIC I Pass-Through Rate for each such REMIC I Regular Interest
for such Distribution Date and, (y) with respect to REMIC I Regular Interest
LT-IO, the excess, if any, of (1) the Uncertificated REMIC I Pass-Through Rate
with respect to such REMIC I Regular Interest for such Distribution Date over
(2)(A) for the first twelve Distribution Dates, 1.000% per annum and (B) for the
12th through the 24th Distribution Dates, 0.500%; weighted on the basis of the
Uncertificated Principal Balance of each REMIC I Regular Interest and (iii)
thereafter, a per annum rate equal to the weighted average of the Uncertificated
Pass-Through Rates for the REMIC I Regular Interests, weighted on the basis of
the respective Uncertificated Principal Balances thereof for such Distribution
Date.
(b) With respect to REMIC II Regular Interest MT-IO-1 and the
first 12 Distribution Dates, .500%, and with respect to REMIC II Regular
Interest MT-IO-1 and any Distribution Date thereafter, 0.00% per annum.
(c) With respect to REMIC II Regular Interest MT-IO-2 and the
first 24 Distribution Dates, .500%, and with respect to REMIC II Regular
Interest MT-IO-2 and any Distribution Date thereafter, 0.00% per annum.
UNCERTIFICATED REGULAR INTERESTS: The REMIC I Regular
Interests and the REMIC II Regular Interests.
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.
42
UNPAID REALIZED LOSS AMOUNT: For any Class of Subordinate
Certificates, the portion of the aggregate Applied Realized Loss Amount
previously allocated to that Class remaining unpaid from prior Distribution
Dates.
VOTING RIGHTS: The portion of the voting rights of all the
Certificates that is allocated to any Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 96% to the Certificates other than the Class A-IO, 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-IO, 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.
WEIGHTED MAXIMUM RATE CAP: As of any Distribution Date, a rate
equal to the weighted average of the Adjusted Maximum Mortgage Rates on the
Mortgage Loans.
43
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. CONVEYANCE OF MORTGAGE LOANS.
(a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans, including all interest and
principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date. The Seller
confirms that, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred
to in the preceding paragraph, the Depositor sells, transfers, assigns, sets
over and otherwise conveys to the Trustee for benefit of the Certificateholders,
without recourse, all right title and interest in the Mortgage Loans.
The Seller further agrees to assign all of its right, title
and interest in and to the interest rate cap transaction evidenced by the
Confirmation And Agreement , and to cause all of its obligations in respect of
such transaction to be assumed by, the Trustee on behalf of the Trust Fund, on
the terms and conditions set forth in the Cap Contract Assignment Agreement.
(b) [reserved]
(c) The Seller has entered into this Agreement in
consideration for the purchase of the Mortgage Loans by the Depositor and has
agreed to take the actions specified herein. The Depositor, concurrently with
the execution and delivery of this Agreement, hereby sells, transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of the
Certificateholders, without recourse, all right title and interest in the
portion of the Trust Fund not otherwise conveyed to the Trustee pursuant to
Sections 2.01(a) or (b).
(d) [reserved]
(e) [reserved]
(f) [reserved]
(g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited with, the
Co-Trustee (or, in the case of the Delay
44
Delivery Mortgage Loans, will deliver to, and deposit with, the Co-Trustee
within the time periods specified in the definition of Delay Delivery Mortgage
Loans) (except as provided in clause (vi) below) for the benefit of the
Certificateholders, the following documents or instruments with respect to each
such Mortgage Loan so assigned (with respect to each Mortgage Loan, clause (i)
through (vi) below, together, the "Mortgage File" for each such Mortgage Loan):
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following
form: "Pay to the order of ________________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from
the originator to the Seller, or, if the original Mortgage Note has
been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of each
MERS Mortgage Loan, the original Mortgage, noting the presence of the
MIN of the Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2003-BC1, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the
Pooling and Servicing Agreement dated as of January 1, 2003, without
recourse" (each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which such
assignment relates);
(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
45
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Seller further agrees that it will not, and will not permit
the Master Servicer to, and the Master Servicer agrees that it will not, alter
the codes referenced in this paragraph with respect to any Mortgage Loan during
the term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is
not a MERS Mortgage Loan the Seller cannot deliver the original recorded
Mortgage or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv) concurrently with the execution and
delivery hereof, the Seller shall deliver or cause to be delivered to the
Co-Trustee a true copy of such Mortgage and of each such undelivered interim
assignment of the Mortgage each certified by the Seller, the applicable title
company, escrow agent or attorney, or the originator of such Mortgage, as the
case may be, to be a true and complete copy of the original Mortgage or
assignment of Mortgage submitted for recording. For any such Mortgage Loan that
is not a MERS Mortgage Loan the Seller shall promptly deliver or cause to be
delivered to the Co-Trustee such original Mortgage and such assignment or
assignments with evidence of recording indicated thereon upon receipt thereof
from the public recording official, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery be made later than 270 days following the Closing Date; provided that
in the event that by such date the Seller is unable to deliver or cause to be
delivered each such Mortgage and each interim assignment by reason of the fact
that any such documents have not been returned by the appropriate recording
office, or, in the case of each interim assignment, because the related Mortgage
has not been returned by the appropriate recording office, the Seller shall
deliver or cause to be delivered such documents to the Co-Trustee as promptly as
possible upon receipt thereof. If the public recording office in which a
Mortgage or interim assignment thereof is recorded retains the original of such
Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and complete
by such recording office, shall satisfy the Seller's obligations in Section
2.01. If any document submitted for recording pursuant to this Agreement is (x)
lost prior to recording or rejected by the applicable recording office, the
Seller shall immediately prepare or cause to be prepared a substitute and submit
it for recording, and shall deliver copies and originals thereof in accordance
with the foregoing or (y) lost after recording, the Seller shall deliver to the
Co-Trustee a copy of such document certified by the applicable public recording
office to be a true and complete copy of the original recorded document. The
Seller shall promptly forward or cause to be forwarded to the Co-Trustee (x)
from time to time additional original documents evidencing an assumption or
modification of a Mortgage Loan and (y) any other documents required to be
delivered by the Depositor or the Master Servicer to the Trustee within the time
periods specified in this Section 2.01.
46
With respect to each Mortgage Loan other than a MERS Mortgage
Loan as to which the related Mortgaged Property and Mortgage File are located in
(a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders, interest in the
related Mortgage Loan, as evidenced by an Opinion of Counsel, delivered by the
Seller to the Trustee and a copy to the Rating Agencies, in lieu of recording
the assignment specified in clause (iii) above, the Seller may deliver an
unrecorded assignment in blank, in form otherwise suitable for recording to the
Co-Trustee; provided that if the related Mortgage has not been returned from the
applicable public recording office, such assignment, or any copy thereof, of the
Mortgage may exclude the information to be provided by the recording office. As
to any Mortgage Loan other than a MERS Mortgage Loan, the procedures of the
preceding sentence shall be applicable only so long as the related Mortgage File
is maintained in the possession of the Co-Trustee in the State or jurisdiction
described in such sentence. In the event that with respect to Mortgage Loans
other than MERS Mortgage Loans (i) the Seller, the Depositor or the Master
Servicer gives written notice to the Trustee that recording is required to
protect the right, title and interest of the Trustee on behalf of the
Certificateholders in and to any Mortgage Loan, (ii) a court recharacterizes the
sale of the Mortgage Loans as a financing, or (iii) as a result of any change in
or amendment to the laws of the State or jurisdiction described in the first
sentence of this paragraph or any applicable political subdivision thereof, or
any change in official position regarding application or interpretation of such
laws, including a holding by a court of competent jurisdiction, such recording
is so required, the Trustee or the Co-Trustee shall complete the assignment in
the manner specified in clause (iii) of the second paragraph of this Section
2.01 and the Seller shall submit or cause to be submitted for recording as
specified above or, should the Seller fail to perform such obligations, the
Trustee shall cause the Master Servicer, at the Master Servicer's expense, to
cause each such previously unrecorded assignment to be submitted for recording
as specified above. In the event a Mortgage File is released to the Master
Servicer as a result of the Master Servicer's having completed a Request for
Release in the form of Exhibit M, the Trustee shall complete the assignment of
the related Mortgage in the manner specified in clause (iii) of the second
paragraph of this Section 2.01.
So long as the Co-Trustee maintains an office in the State of
California, the Co-Trustee shall maintain possession of and not remove or
attempt to remove from the State of California any of the Mortgage Files as to
which the related Mortgaged Property is located in such State. In the event that
the Seller fails to record an assignment of a Mortgage Loan as herein provided
within 90 days of notice of an event set forth in clause (i), (ii) or (iii) of
the above paragraph, the Master Servicer shall prepare and, if required
hereunder, file such assignments for recordation in the appropriate real
property or other records office. The Seller hereby appoints the Master Servicer
(and any successor servicer hereunder) as its attorney-in-fact with full power
and authority acting in its stead for the purpose of such preparation, execution
and filing.
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.
47
Notwithstanding anything to the contrary in this Agreement,
within thirty days after the Closing Date, the Seller shall either (i) deliver
to the Co-Trustee the Mortgage File as required pursuant to this Section 2.01
for each Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery
Mortgage Loan or (B) substitute the Delay Delivery Mortgage Loan for a
Replacement Mortgage Loan, which repurchase or substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, provided that if the Seller fails to deliver a Mortgage File for any Delay
Delivery Mortgage Loan within the period provided in the prior sentence, the
cure period provided for in Section 2.02 or in Section 2.03 shall not apply to
the initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan,
but rather the Seller shall have five (5) Business Days to cure such failure to
deliver; 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.
Section 2.02. ACCEPTANCE OF THE MORTGAGE LOANS.
(a) The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial Certification
in the form annexed hereto as Exhibit G-1 and in the list of exceptions attached
thereto, of the documents referred to in clauses (i) and (iii) of Section
2.01(g) above with respect to the Mortgage Loans and all other assets included
in the Trust Fund and declares that it holds and will hold such documents and
the other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold such other assets included in the Trust Fund, in trust for
the exclusive use and benefit of all present and future Certificateholders.
The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Master Servicer and the Seller an Initial Certification
substantially in the form annexed hereto as Exhibit G-1 to the effect that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), the documents described in
Section 2.01(g)(i) and, in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to
such Mortgage Loan are in the Co-Trustee's possession, and based on its review
and examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Mortgage Loan. The Trustee agrees to
execute and deliver within 30 days after the Closing Date to the Depositor, the
Master Servicer and the Seller an Interim Certification substantially in the
form annexed hereto as Exhibit G-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), all documents required to be delivered to the
48
Co-Trustee pursuant to this Agreement with respect to such Mortgage Loan are in
its possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Mortgage Loan, and
(ii) the information set forth in items (i), (iv), (v), (vi), (viii), (xi) and
(xiv) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. On or before the thirtieth (30th)
day after the Closing Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer and the Seller a Delay Delivery Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit G-3, with any
applicable exceptions noted thereon. The Co-Trustee or the Trustee, as
applicable, shall be under no duty or obligation to inspect, review or examine
such documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable or appropriate for the represented purpose or that
they have actually been recorded in the real estate records or that they are
other than what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and the Seller (and to any
Certificateholder that so requests) a Final Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit H, with any
applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of
such Final Certification, the Co-Trustee, at the Trustee's direction, shall
review each Mortgage File with respect to the Mortgage Loans to determine that
such Mortgage File contains the documents listed in Section 2.01(g). If, in the
course of such review, the Co-Trustee finds any document or documents
constituting a part of such Mortgage File that do not meet the requirements of
clauses (i)-(iv) and (vi) 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 Co-Trustee of a Request
for Release substantially in the form of Exhibit N. No substitution will be made
in any calendar month after the Determination Date for such month.
49
The Purchase Price for any such Mortgage Loan shall be deposited by the Seller
in the Certificate Account and, upon receipt of such deposit and certification
with respect thereto in the form of Exhibit N hereto, the Co-Trustee shall
release the related Mortgage File to the Seller and shall execute and deliver at
the Seller's request such instruments of transfer or assignment as the Seller
has prepared, in each case without recourse, as shall be necessary to vest in
the Seller, or a designee, the Trust Fund's interest in any Mortgage Loan
released pursuant hereto. If pursuant to the foregoing provisions the Seller
repurchases an Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer
shall cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to the Seller and shall cause
such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations.
The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of the
Seller from time to time.
It is understood and agreed that the obligation of the Seller
to substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a)(A) or (B) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against the Seller.
(b) [reserved]
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
MASTER SERVICER AND THE SELLER.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Seller and the Trustee as follows, as of the date hereof with
respect to the Mortgage Loans:
(i) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the laws
of the State of Texas and is duly authorized and qualified to transact
any and all business contemplated by this Agreement to be conducted by
the Master Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate action on the part of the Master Servicer the execution,
delivery
50
and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with
its terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer under this Agreement, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of the Master Servicer and will not (A) result in a material breach of
any term or provision of the certificate of limited partnership,
partnership agreement or other organizational document of the Master
Servicer or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under,
the terms of any other material agreement or instrument to which the
Master Servicer is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Master Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Master Servicer; and the Master Servicer is not in breach or violation
of any material indenture or other material agreement or instrument, or
in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
the Master Servicer's ability to perform or meet any of its obligations
under this Agreement.
(iv) The Master Servicer is an approved servicer of
conventional mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and is a
mortgagee approved by the Secretary of Housing and Urban Development
pursuant to sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Master Servicer has obtained the same.
(vii) The Master Servicer is a member of MERS in good
standing, and will comply in all material respects with the rules and
procedures of MERS in connection with the
51
servicing of the Mortgage Loans for as long as such Mortgage Loans are
registered with MERS.
(b) The Seller hereby represents and warrants to the
Depositor, the Master Servicer and the Trustee as follows, as of the Cut-off
Date (unless otherwise indicated or the context otherwise requires, percentages
with respect to the Mortgage Loans are measured by the Cut-off Date Principal
Balance):
(i) The Seller is duly organized as a New York corporation and
is validly existing and in good standing under the laws of the State of
New York and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Seller
in any state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and, in
any event, is in compliance with the doing business laws of any such
state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to sell the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(ii) The Seller has the full corporate power and authority to
sell each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on
the part of the Seller the execution, delivery and performance of this
Agreement; and this Agreement , assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under this
Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance
with the terms hereof and thereof are in the ordinary course of
business of the Seller and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Seller or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which the Seller is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to the Seller
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Seller; and the Seller is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body
52
having jurisdiction over it which breach or violation may materially
impair the Seller's ability to perform or meet any of its obligations
under this Agreement.
(iv) The Seller is an approved seller of conventional mortgage
loans for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(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 lien on the related Mortgaged Property , subject only to (1) the
lien of non-delinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan, 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,
53
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(xiii) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(xiv) There is no valid offset, claim, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
(xv) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property that are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those that
are insured against by the title insurance policy referred to in item
(xix) below.
(xvi) As of the Closing Date, to the best of Seller's
knowledge, each Mortgaged Property is free of material damage and is in
good repair.
(xvii) To the best of the Seller's knowledge, the Mortgage
Loans complied at origination in all material respects with applicable
state and federal laws, including, without limitation, usury, equal
credit opportunity, real estate settlement procedures, truth-in-lending
and disclosure laws, and consummation of the transactions contemplated
hereby will not involve the violation of any such laws.
(xviii) As of the Closing Date neither the Seller nor any
prior holder of any Mortgage has modified the Mortgage in any material
respect (except that a Mortgage Loan may have been modified by a
written instrument that has been recorded or submitted for recordation,
if necessary, to protect the interests of the Certificateholders and
the original or a copy of which has been delivered to the Trustee);
satisfied, cancelled or subordinated such Mortgage in whole or in part;
released the related Mortgaged Property in whole or in part from the
lien of such Mortgage; or executed any instrument of release,
cancellation, modification (except as expressly permitted above) or
satisfaction with respect thereto.
(xix) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and
effect, and each such policy was issued by a title insurer qualified to
do business in the jurisdiction where the Mortgaged Property is located
and acceptable to Xxxxxx Mae or Xxxxxxx Mac and is in a form acceptable
to Xxxxxx Mae or Xxxxxxx Mac, which policy insures the Seller and
successor owners of indebtedness secured by the insured Mortgage, as to
the first priority lien, of the Mortgage subject to the exceptions set
forth in paragraph (iv) above; to the best of the Seller's knowledge,
no claims have been made under such mortgage title insurance policy and
no prior holder of the related Mortgage, including the Seller, has
done, by act
54
or omission, anything that would impair the coverage of such mortgage
title insurance policy.
(xx) No Mortgage Loan was the subject of a Principal
Prepayment in full between the Closing Date and the Cut-off Date.
(xxi) To the best of the Seller's knowledge, all of the
improvements that were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(xxii) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
(xxiii) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms and under
applicable law, except that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b) the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. To the
best of the Seller's knowledge, all parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties.
(xxiv) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making, or
closing or recording the Mortgage Loans were paid.
(xxv) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
55
(xxvi) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by
the Certificateholders to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Mortgagor.
(xxvii) Each Mortgage Note and each Mortgage is in
substantially one of the forms attached hereto as Exhibit P acceptable
in form to Xxxxxx Mae or Xxxxxxx Mac.
(xxviii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the related Mortgage Note.
(xxix) The origination, underwriting, servicing and collection
practices used by the Seller with respect to each Mortgage Loan have
been in all respects legal, proper, prudent and customary in the
mortgage lending and servicing business, as conducted by prudent
lending institutions which service mortgage loans of the same type in
the jurisdiction in which the Mortgaged Property is located.
(xxx) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations.
(xxxi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(xxxii) Each Mortgage Loan contains a customary "due on sale"
clause.
(xxxiii) No more than approximately 3.87% of the Mortgage
Loans are secured by two- to four-family dwellings. No more than
approximately 4.51% of the Mortgage Loans are secured by low rise
condominium units. No more than approximately 0.14% of the Mortgage
Loans are secured by high rise condominium units. No less than
approximately 80.84% of the Mortgage Loans are secured by single family
detached dwellings. No more than approximately 0.56% of the Mortgage
Loans are secured by manufactured housing. No more than approximately
10.06% of the Mortgage Loans are secured by PUDs.
(xxxiv) No Mortgage Loan had a principal balance in excess of
$997,709.84 at origination.
(xxxv) To the extent required under applicable law, each
originator and subsequent mortgagee or servicer of the Mortgage Loan
complied with all licensing requirements and was authorized to transact
and do business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held or serviced the Mortgage
Loan. Any and all requirements of any federal, state or local laws or
regulations, including,
56
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, anti-predatory lending, fair
credit reporting, unfair collection practice, equal credit opportunity,
fair housing and disclosure laws and regulations, applicable to the
solicitation, origination, collection and servicing of such Mortgage
Loan have been complied with in all material respects; and any
obligations of the holder of the Mortgage Note, Mortgage and other loan
documents have been complied with in all material respects; servicing
of each Mortgage Loan has been in accordance with prudent mortgage
servicing standards, any applicable laws, rules and regulations and in
accordance with the terms of the Mortgage Notes, Mortgage and other
loan documents, whether such origination and servicing was done by
Seller, its affiliates, or any third party which originated the
Mortgage Loan on behalf of, or sold the Mortgage Loan to, any of them,
or any servicing agent of any of the foregoing;
(xxxvi) Each Mortgage Loan was originated on or after March
20, 2001;
(xxxvii) Each Two-Year Hybrid Mortgage Loan had an initial
Adjustment Date no later than April 1, 2004; each Three-Year Hybrid
Mortgage Loan had an initial Adjustment Date no later than April 1,
2004.
(xxxviii) [Reserved]
(xxxix) Approximately 87.51% of the Mortgage Loans provide for
a prepayment penalty.
(xl) [Reserved]
(xli) On the basis of representations made by the Mortgagors
in their loan applications, no more than approximately 2.89% of the
Mortgage Loans are secured by investor properties, and no less than
approximately 97.06% of the owner-occupied Mortgage Loans are secured
by owner-occupied Mortgaged Properties that are primary residences and
no more than approximately 0.05% of the owner-occupied Mortgage Loans
are secured by owner-occupied Mortgaged Properties that are secondary
residences.
(xlii) At the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a generally acceptable carrier that provides for fire and
extended coverage and coverage for such other hazards as are customary
in the area where the Mortgaged Property is located in an amount that
is at least equal to the lesser of (i) the maximum insurable value of
the improvements securing such Mortgage Loan or (ii) the greater of (a)
the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds of such policy shall be sufficient to
prevent the Mortgagor and/or the mortgagee from becoming a co-insurer.
If the Mortgaged Property is a condominium unit, it is included under
the coverage afforded by a blanket policy for the condominium unit. All
such individual insurance policies and all flood policies referred to
in item (xliv) below contain a standard mortgagee clause
57
naming the Seller or the original mortgagee, and its successors in
interest, as mortgagee, and the Seller has received no notice that any
premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and
upon the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at the Mortgagor's cost
and expense and to seek reimbursement therefor from the Mortgagor.
(xliii) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood
Insurance Administration is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the original outstanding
principal balance of the Mortgage Loan, (B) the minimum amount required
to compensate for damage or loss on a replacement cost basis, or (C)
the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(xliv) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the total or partial
condemnation of the Mortgaged Property.
(xlv) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and the Seller has not
waived any default, breach, violation or event of acceleration.
(xlvi) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of the Seller's knowledge, no
Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(xlvii) Each Mortgage Loan is being serviced by the Master
Servicer, or, if a Mortgage Loan is being serviced by the originator of
such Mortgage Loan, the Master Servicer and the originator have agreed
to transfer the servicing of such Mortgage Loan on or prior to March 1,
2003.
(xlviii) Any future advances made prior to the Cut-off Date
have been consolidated with the outstanding principal amount secured by
the Mortgage, and the secured principal amount, as consolidated, bears
a single interest rate and single repayment term reflected on the
Mortgage Loan Schedule. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan. The Mortgage
Note does not permit or obligate the Master Servicer to make future
advances to the Mortgagor at the option of the Mortgagor.
58
(xlix) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents that previously became due and owing have been paid, or an
escrow of funds has been established in an amount sufficient to pay for
every such item that remains unpaid and that has been assessed, but is
not yet due and payable. Except for (A) payments in the nature of
escrow payments, and (B) interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage proceeds,
whichever is later, to the day that precedes by one month the Due Date
of the first installment of principal and interest, including without
limitation, taxes and insurance payments, the Master Servicer has not
advanced funds, or induced, solicited or knowingly received any advance
of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required by the Mortgage.
(l) The Mortgage Loans were underwritten in all material
respects in accordance with customary and prudent underwriting
guidelines generally used by originators of credit blemished quality
mortgage loans.
(li) Prior to the approval of the Mortgage Loan application,
an appraisal of the related Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan; such appraisal is in
a form acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
(lii) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and no Mortgage Loan
is subject to a buydown or similar arrangement.
(liii) The Mortgage Rates borne by the Mortgage Loans as of
the Cut-off Date ranged from 4.890% per annum to 12.990% per annum and
the weighted average Mortgage Rate as of the Cut-off Date was 7.790%
per annum.
(liv) [Reserved]
(lv) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Seller's
portfolio at the Closing Date, as to which the representations and
warranties made as to the Mortgage Loans set forth in this Section
2.03(b) can be made. No selection was made in a manner that would
adversely affect the interests of Certificateholders.
(lvi) The Gross Margins on the Adjustable Rate Mortgage Loans
that are Mortgage Loans range from approximately 1.837% to 13.740% and
the weighted average Gross Margin was approximately 6.866%.
59
(lvii) Each Mortgage Loan has a payment date on or before the
Due Date in the month of the first Distribution Date.
(lviii) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
(lix) [Reserved]
(lx) There is no obligation on the part of the Seller under
the terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor.
(lxi) Any leasehold estate securing a Mortgage Loan has a term
of not less than five years in excess of the term of the related
Mortgage Loan.
(lxii) [Reserved]
(lxiii) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without regard
to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially
similar successor provision) and applicable Treasury regulations
promulgated thereunder.
(lxiv) No Mortgage Loan was either a "consumer credit
contract" or a "purchase money loan" as such terms are defined in 16
C.F.R. Section 433 nor is any Mortgage Loan a "mortgage" as defined in
15 U.S.C. ss. 1602(aa).
(lxv) Each Mortgage Loan was (A) originated no earlier than
six months prior to the time the Seller purchased such Mortgage Loan
pursuant to a mortgage loan purchase agreement or other similar
agreement and (B) underwritten or reunderwritten by the Seller in
accordance with the Seller's underwriting guidelines for credit
blemished loans in effect at the time the loan was underwritten or
reunderwritten, as applicable.
(lxvi) 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).
(lxvii) Each Mortgage Loan was originated in compliance with
the following anti-predatory lending guidelines:
(i) No borrower was encouraged or required to select a
Mortgage Loan product offered by the Mortgage Loan's originator which is a
higher cost product designed for less creditworthy borrowers, unless at the time
of the Mortgage Loan's origination, such borrower did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator. If, at the time of loan application, the borrower may have
qualified
60
for a for a lower-cost credit product then offered by any mortgage lending
affiliate of the Mortgage Loan's originator, the Mortgage Loan's originator
referred the borrower's application to such affiliate for underwriting
consideration;
(ii) The methodology used in underwriting the extension of
credit for the each Mortgage Loan employs objective mathematical principles
which relate the borrower's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on the extent of the
borrower's equity in the collateral as the principle determining factor in
approving such credit extension. Such underwriting methodology confirmed that at
the time of origination (application/approval) the borrower had a reasonable
ability to make timely payments on the Mortgage Loan;
(iii) With respect to any Mortgage Loan that contains a
provision permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to the loan's origination, the borrower agreed to such
premium in exchange for a monetary benefit, including but not limited to a rate
or fee reduction, (ii) prior to the loan's origination, the borrower was offered
the choice of another mortgage product that did not require payment of such a
premium, (iii) the prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, Servicer shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;
(iv) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;
(v) No Mortgage Loan is subject to the Home Ownership and
Equity Protection Act of 1994 (15 USC ss. 1602(aa)), Regulation Z (12 CFR
226.32) or any similar state law or regulation including those relating to "high
cost mortgages" and "high LTV mortgages";
(vi) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no borrower was charged "points and fees" (whether or not financed)
in an amount greater than 5% of the principal amount of such loan, such 5%
limitation calculated in accordance with the Lender Letter;
(vii) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Mortgage Loan has been disclosed in
writing to the borrower in accordance with applicable state and federal law and
regulation; and
(lxviii) If the Mortgage Loan provides that the interest rate
on the principal balance of the related Mortgage Loan may be adjusted,
all of the terms of the related Mortgage
61
pertaining to interest rate adjustments, payment adjustments and
adjustments of the outstanding principal balance have been made in
accordance with the terms of the related Mortgage Note and applicable
law and are enforceable and such adjustments will not affect the
priority of the Mortgage lien;
(lxix) The Mortgaged Property complies with all applicable
laws, rules and regulations relating to environmental matters,
including but not limited to those relating to radon, asbestos and lead
paint and neither the Seller nor, to the Seller's knowledge, the
Mortgagor, has received any notice of any violation or potential
violation of such law;
(lxx) There is no action, suit or proceeding pending, or to
the best of Seller's knowledge, threatened or likely to be asserted
with respect to the Mortgage Loan against or affecting Seller before or
by any court, administrative agency, arbitrator or governmental body;
(lxxi) No action, inaction, or event has occurred and no state
of fact exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by
Seller or any designee of Seller or any corporation in which Seller or
any officer, director, or employee had a financial interest at the time
of placement of such insurance;
(lxxii) Each Mortgage Loan has a fully assignable life of loan
tax service contract which may be assigned without the payment of any
fee;
(lxxiii) No Mortgagor has notified the Seller, and the Seller
has no knowledge, of any relief requested or allowed to a Mortgagor
under the Relief Act;
(lxxiv) No Mortgage Loan is subject to the City of Oakland
Anti-Predatory Lending Ordinance (i.e. the Oakland Residential Lending
Ordinance No. 12361 C.M.S., the amendment No. 12362 C.M.S. to Oakland's
Linked Banking Services Ordinance and Resolution 01-62 of the Oakland
Redevelopment Agency, collectively the "Oakland Ordinance") except as
identified on the Mortgage Loan Schedule. Any Mortgage Loan subject to
the Oakland Ordinance is in compliance with the provisions of the
Oakland Ordinance;
(lxxv) No predatory or deceptive lending practices, including
but not limited to, the extension of credit to the Mortgagor without
regard for the Mortgagor's ability to repay the Mortgage Loan and the
extension of credit to the Mortgagor which has no apparent benefit to
the Mortgagor, were employed by the originator of the Mortgage Loan in
connection with the origination of the Mortgage Loan; and
(lxxvi) The information set forth in the Prepayment Charge
Schedule with respect to each Mortgage Loanis complete, true and
correct in all material respects at the date or
62
dates respecting which such information is furnished and each
Prepayment Charge is permissible and enforceable in accordance with its
terms under applicable law upon the Mortgagor's full and voluntary
principal prepayment (except to the extent that: (1) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights
generally; or (2) the collectibility thereof may be limited due to
acceleration in connection with a foreclosure or other involuntary
prepayment).
In addition to the foregoing repsentations and warranties, the Seller hereby
represents and warrants to the Depositor, the Master Servicer and the Trustee
that as of the Closing Date, each Mortgage Loan is in compliance with applicable
federal and state laws and regulations.
(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty set forth in Section 2.03(a) or (b), that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties. Each of the Master Servicer and the Seller (each,
a "Representing Party") hereby covenants with respect to a breach of the
representations and warranties set forth in Sections 2.03(a) and (b), that
within 90 days of the earlier of the discovery by such Representing Party or
receipt of written notice by such Representing Party from any party of a breach
of any representation or warranty set forth herein made that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
it shall cure such breach in all material respects and, if such breach is not so
cured, shall, (i) if such 90-day period expires prior to the second anniversary
of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from
the Trust Fund and substitute in its place a Replacement Mortgage Loan, in the
manner and subject to the conditions set forth in this Section; or (ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit M. Any Representing
Party liable for a breach under this Section 2.03 shall promptly reimburse the
Master Servicer and the Trustee for any expenses reasonably incurred by the
Master Servicer or the Trustee in respect of enforcing the remedies for such
breach. To enable the Master Servicer to amend the Mortgage Loan Schedule, any
Representing Party liable for a breach under this Section 2.03 shall, unless it
cures such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Master Servicer whether such Representing Party intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties described in this Section
that are made to the best of the Representing Party's knowledge, if it is
discovered by any of the Depositor, the Master Servicer, the Seller or the
Trustee that the substance of such representation and warranty is inaccurate and
such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, notwithstanding the Representing Party's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
63
With respect to any Replacement Mortgage Loan or Loans, the
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders the related Mortgage Note, Mortgage
and assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Co-Trustee shall
release to the Representing Party the Mortgage File relating to such Deleted
Mortgage Loan and held for the benefit of the Certificateholders and shall
execute and deliver at the Master Servicer's direction such instruments of
transfer or assignment as have been prepared by the Master Servicer, in each
case without recourse, as shall be necessary to vest in the Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution is
less than the Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due (in the case of Actuarial Mortgage Loans)
in the month of substitution) of all such Deleted Mortgage Loans. An amount
equal to the aggregate of the deficiencies described in the preceding sentence
(such amount, the "Substitution Adjustment Amount") shall be forwarded by the
Seller to the Master Servicer and deposited by the Master Servicer into the
Certificate Account not later than the Determination Date for the Distribution
Date relating to the Prepayment Period during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.08 on the Determination Date for the Distribution Date in
the month following the month during which such Seller became obligated to
repurchase or replace such Mortgage Loan and upon such
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deposit of the Purchase Price, the delivery of the Opinion of Counsel required
by Section 2.05, if any, and the receipt of a Request for Release in the form of
Exhibit N hereto, the Co-Trustee shall release the related Mortgage File held
for the benefit of the Certificateholders to such Seller, and the Trustee shall
execute and deliver at such Person's direction the related instruments of
transfer or assignment prepared by such Seller, in each case without recourse,
as shall be necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to such Seller to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
breach available to Certificateholders, the Depositor or the Trustee.
(d) The representations and warranties set forth in Section
2.03 hereof shall survive delivery of the respective Mortgage Files to the
Co-Trustee for the benefit of the Certificateholders.
Section 2.04. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents and warrants to the Seller,
the Master Servicer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by
it and to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority
to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized,
by all necessary corporate action on its part, the execution, delivery
and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights 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
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may be bound or (C) constitute a material violation of any statute,
order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over it which breach or violation may materially
impair the Depositor's ability to perform or meet any of its
obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor to
perform its obligations under this Agreement in accordance with the
terms hereof and thereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee
with respect to each Mortgage Loan as of the Closing Date, that following the
transfer of the Mortgage Loans to it by the Seller, the Depositor had good title
to the Mortgage Loans, and the related Mortgage Notes were subject to no
offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and
warranties set forth in the two immediately preceding paragraphs shall survive
delivery of the Mortgage Files to the Co-Trustee. Upon discovery by the
Depositor or the Trustee of a breach of any of the foregoing representations and
warranties set forth in the immediately preceding paragraph (referred to herein
as a "breach"), which breach materially and adversely affects the interest of
the Certificateholders, the party discovering such breach shall give prompt
written notice to the others and to each Rating Agency. The Depositor hereby
covenants with respect to the representations and warranties made by it in this
Section 2.04 that within 90 days of the earlier of the discovery it or receipt
of written notice by it from any party of a breach of any representation 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
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substitution delivers to the Trustee an Opinion of Counsel, addressed to the
Trustee, to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller, the Master Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of section 860G(a)(3) of the Code, the party discovering such fact
shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties. In connection therewith, the
Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03(b) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06. AUTHENTICATION AND DELIVERY OF CERTIFICATES.
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, authenticated and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
Section 2.07. COVENANTS OF THE MASTER SERVICER.
The Master Servicer hereby covenants to the Depositor, the
Seller and the Trustee as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements of the insurer under each Required Insurance Policy; and
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(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the
Depositor, any affiliate of the Depositor or the Trustee and prepared
by the Master Servicer pursuant to this Agreement will contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the information, certificate, statement or report not
misleading.
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ARTICLE III.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. MASTER SERVICER TO SERVICE MORTGAGE LOANS.
For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with
customary and usual standards of practice of prudent mortgage loan lenders in
the respective states in which the Mortgaged Properties are located. In
connection with such servicing and administration, the Master Servicer shall
have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, subject to the terms hereof (i) to execute and
deliver, on behalf of the Certificateholders and the Trustee, customary consents
or waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages (but only in the manner provided in this Agreement), (iii) to collect
any Insurance Proceeds and other Liquidation Proceeds, and (iv) subject to
Section 3.12(a), to effectuate foreclosure or other conversion of the ownership
of the Mortgaged Property securing any Mortgage Loan; provided that the Master
Servicer shall take no action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan or
the rights and interests of the Depositor and the Trustee under this Agreement.
The Master Servicer shall represent and protect the interest of the Trust Fund
in the same manner as it currently protects its own interest in mortgage loans
in its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan and shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan which would cause the Trust Fund to fail to qualify as
a REMIC or result in the imposition of any tax under Section 860(a) or 860(d) of
the Code, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Master Servicer, in its own name or in the name
of the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Master Servicer believes it appropriate in
its reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with
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respect to such assignment or re-recording of a Mortgage in the name of MERS,
solely as nominee for the Trustee and its successors and assigns.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers
to the Trustee by the Closing Date.
In addition, the Master Servicer shall administer the Mortgage
Insurance Policy on behalf of itself, the Seller, the Depositor, and the Trustee
for the benefit of the Certificateholders, when it is necessary to make claims
and receive payments under the Mortgage Insurance Policy. In connection with its
activities as Master Servicer of the Mortgage Loans, the Master Servicer agrees
to present, on behalf of itself, the Trustee and the Certificateholders, claims
to the insurer under any primary insurance policies and, in this regard, to take
any reasonable action necessary to permit recovery under any primary insurance
policies respecting defaulted Mortgage Loans. Any amounts collected by the
Master Servicer under any primary insurance policies shall be deposited in the
Certificate Account.
Section 3.02. SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF
MASTER SERVICER.
(a) The Master Servicer may arrange for the subservicing of
any Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a subservicer or reference to actions taken through a Master Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
Every subservicing agreement entered into by the Master Servicer shall contain a
provision giving the successor Master Servicer the option to terminate such
agreement in the event a successor Master Servicer is appointed. All actions of
each subservicer performed
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pursuant to the related subservicing agreement shall be performed as an agent of
the Master Servicer with the same force and effect as if performed directly by
the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall
be deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a subservicer regardless of whether
such payments are remitted by the subservicer to the Master Servicer.
Section 3.03. RIGHTS OF THE DEPOSITOR, THE SELLER AND THE
TRUSTEE IN RESPECT OF THE MASTER SERVICER.
None of the Trustee, the Seller or the Depositor shall have
any responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise.
Section 3.04. TRUSTEE TO ACT AS MASTER SERVICER.
In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.10 hereof or any acts or omissions of the predecessor Master
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02 or
2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of Section
6.02 hereof). If the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Event of Default), the Trustee (or
any other successor servicer) may, at its option, succeed to any rights and
obligations of the Master Servicer under any subservicing agreement in
accordance with the terms thereof; provided that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in its
capacity as servicer under a subservicing agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of the Master Servicer thereunder; and the Master Servicer shall not
thereby be relieved of any liability or obligations under the subservicing
agreement arising prior to the date of such succession.
The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
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Section 3.05. COLLECTION OF MORTGAGE LOAN PAYMENTS;
CERTIFICATE ACCOUNT; DISTRIBUTION ACCOUNT;
SELLER SHORTFALL INTEREST REQUIREMENT.
(a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located
to collect all payments called for under the terms and provisions of the
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or any Prepayment Charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 270 days. In
the event of any such arrangement, the Master Servicer shall make Advances on
the related Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to be
deposited on a daily basis within two Business Days of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and interest
due on the Mortgage Loans before the Cut-off Date) and the following amounts
required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other
than interest accrued on the Mortgage Loans prior to the Cut-off Date,
and the Certificate Account Deposit;
(iii) all Insurance Proceeds and Liquidation Proceeds, other
than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
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(vi) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment
Amount;
(viii) all Advances made by the Master Servicer pursuant to
Section 4.01;
(ix) the Seller Shortfall Interest Requirement;
(x) all Prepayment Charges collected; and
(xi) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master
Servicer into the Certificate Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of prepayment penalties, late payment charges or assumption fees, if
collected, need not be remitted by the Master Servicer. In the event that the
Master Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the institution maintaining the Certificate Account, to
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the institution maintaining the Certificate
Account, that describes the amounts deposited in error in the Certificate
Account. The Master Servicer shall maintain adequate records with respect to all
withdrawals made pursuant to this Section. All funds deposited in the
Certificate Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a);
(ii) [Reserved];
(iii) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(f) in connection with any losses on
Permitted Investments;
(iv) [Reserved];
(v) [Reserved]; and
(vi) any amounts received under the Cap Contract, including
amounts, if any, received by the Master Servicer as provided in Section
3.19.
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The foregoing requirements for remittance by the Master
Servicer and deposit by the Trustee into the Distribution Account shall be
exclusive. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering a written
notice to the Trustee that describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Master Servicer.
(d) No later than 1:00 p.m. Pacific time on the Business Day
prior to the Master Servicer Advance Date in February 2003, the Seller shall
remit to the Master Servicer, and the Master Servicer shall deposit in the
Certificate Account, the Seller Shortfall Interest Requirement (if any) for such
Master Servicer Advance Date.
(e) The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, the Seller shall deposit into the Principal Reserve Fund an amount
equal to $230.52. The Principal Reserve Fund shall be treated as an "outside
reserve fund" under applicable Treasury regulations and shall not be part of the
REMIC. Any investment earnings on the Principal Reserve Fund shall be treated as
owned by the Seller and will be taxable to the Seller. On the Business Day
before the Distribution Date occurring in February 2003, the Trustee shall
transfer from the Principal Reserve Fund to the Distribution Account the funds
on deposit in the Principal Reserve Fund (net of any investment earnings on
deposit in the Principal Reserve Fund, which shall be transferred to the Seller)
and shall distribute such amount to the Certificates on the Distribution Date
pursuant to Section 4.04(d). The Trustee shall then terminate the Principal
Reserve Fund.
(f) Each institution that maintains the Certificate Account,
the Distribution Account or the Principal Reserve Fund shall invest the funds in
each such account, as directed by the Master Servicer, in Permitted Investments,
which shall mature not later than (x) in the case of the Certificate Account,
the second Business Day next preceding the related Distribution Account Deposit
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account, then such Permitted
Investment shall mature not later than the Business Day next preceding such
Distribution Account Deposit Date) and (y) in the case of the Distribution
Account and the Principal Reserve Fund, the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains such Distribution Account or Principal Reserve Fund, then such
Permitted Investment shall mature not later than such Distribution Date), in
each case, shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Trustee, for the benefit
of the Certificateholders. In the case of (i) the Certificate Account and the
Distribution Account, all income and gain net of any losses realized from any
such investment shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided
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herein, and (ii) the Principal Reserve Fund, all income and gain net of any
losses realized from any such investment shall be for the benefit of the Seller
and shall be remitted to the Seller as provided herein. The amount of any losses
incurred in the Certificate Account or the Distribution Account in respect of
any such investments shall be deposited by the Master Servicer in the
Certificate Account or paid to the Trustee for deposit into the Distribution
Account out of the Master Servicer's own funds immediately as realized. The
amount of any losses incurred in the Principal Reserve Fund in respect of any
such investments shall be paid by the Seller to the Trustee for deposit into the
Principal Reserve Fund out of the Seller's own funds immediately as realized.
Any losses incurred in the Carryover Reserve Fund in respect of any such
investments shall be charged against amounts on deposit in the Carryover Reserve
Fund (or such investments) immediately as realized. The Trustee shall not be
liable for the amount of any loss incurred in respect of any investment or lack
of investment of funds held in the Certificate Account, the Distribution
Account, the Carryover Reserve Fund or the Principal Reserve Fund and made in
accordance with this Section 3.05 (or in the case of the Carryover Reserve Fund,
Section 4.08).
(g) The Master Servicer shall give at least 30 days advance
notice to the Trustee, the Seller, each Rating Agency and the Depositor of any
proposed change of location of the Certificate Account prior to any change
thereof. The Trustee shall give at least 30 days advance notice to the Master
Servicer, the Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account, the Carryover Reserve Fund
or Principal Reserve Fund prior to any change thereof.
Section 3.06. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS; ESCROW ACCOUNTS.
To the extent required by the related Mortgage Note, the
Master Servicer shall establish and maintain one or more accounts (each, an
"Escrow Account") and deposit and retain therein all collections from the
Mortgagors (or advances by the Master Servicer) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer out of related collections for any payments made
pursuant to Sections 3.01 hereof (with respect to taxes and assessments and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account or to clear and terminate
the Escrow Account at the termination of this Agreement in accordance with
Section 9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
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Section 3.07. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS.
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance policies and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
designated by it.
Upon reasonable advance notice in writing if required by
federal regulation, the Master Servicer will provide to each Certificateholder
that is a savings and loan association, bank or insurance company certain
reports and reasonable access to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates; provided that the Master Servicer shall be
entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Master Servicer in providing such reports and access.
Section 3.08. PERMITTED WITHDRAWALS FROM THE CERTIFICATE
ACCOUNT, DISTRIBUTION ACCOUNT AND THE CARRYOVER
RESERVE FUND.
(a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not
previously paid to or withheld by the Master Servicer), as servicing
compensation in accordance with Section 3.15, that portion of any
payment of interest that equals the Servicing Fee for the period with
respect to which such interest payment was made, and, as additional
servicing compensation, those other amounts set forth in Section 3.15;
(ii) to reimburse the Master Servicer for Advances made by it
with respect to the Mortgage Loans, such right of reimbursement
pursuant to this subclause (ii) being limited to amounts received on
particular Mortgage Loan(s) (including, for this purpose, Liquidation
Proceeds) that represent late recoveries of payments of principal
and/or interest on such particular Mortgage Loan(s) in respect of which
any such Advance was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer from Insurance Proceeds
for Insured Expenses covered by the related Required Insurance Policy;
(v) to pay the Master Servicer any unpaid Servicing Fees and
to reimburse it for any unreimbursed Servicing Advances, the Master
Servicer's right to reimbursement of
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Servicing Advances pursuant to this subclause (v) with respect to any
Mortgage Loan being limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds and purchase
and repurchase proceeds) that represent late recoveries of the payments
for which such advances were made pursuant to Section 3.01 or Section
3.06;
(vi) to pay to the Seller, the Depositor or the Master
Servicer, as applicable, with respect to each Mortgage Loan or property
acquired in respect thereof that has been purchased pursuant to Section
2.02, 2.03 or 3.12, all amounts received thereon and not taken into
account in determining the related Stated Principal Balance of such
repurchased Mortgage Loan;
(vii) to reimburse the Seller, the Master Servicer or the
Depositor for expenses incurred by any of them in connection with the
Mortgage Loans or Certificates and reimbursable pursuant to Section
6.03 hereof provided that such amount shall only be withdrawn following
the withdrawal from the Certificate Account for deposit into the
Distribution Account pursuant to the following paragraph;
(viii) to withdraw pursuant to Section 3.05 any amount
deposited in the Certificate Account and not required to be deposited
therein; and
(ix) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount and
the Principal Remittance Amount for such Distribution Date to the extent on
deposit in the Certificate Account, and the Trustee shall deposit such amount in
the Distribution Account.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Certificate Account pursuant to subclauses
(i), (ii), (iv), (v) and (vi) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for distribution to the Certificateholders in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
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(i) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in
or credited to the Distribution Account;
(ii) to pay to the Co-Trustee, for payment to the Mortgage
Insurer as provided below, the Mortgage Insurance Premium;
(iii) to pay the Trustee the Trustee Fee on each Distribution
Date;
(iv) to withdraw pursuant to Section 3.05 any amount deposited
in the Distribution Account and not required to be deposited therein;
and
(v) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
The Co-Trustee shall pay the Mortgage Insurance Premium to the
Mortgage Insurer in accordance with the following wiring instructions: Firstar
Bank, 000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, ABA #000000000 For
the Account of Mortgage Guaranty Insurance Corporation Account #112663706,
Attention: Premium Pay - 0451545690 (2003-BC1).
(c) The Trustee shall withdraw funds from the Carryover
Reserve Fund for distribution to the Certificateholders in the manner specified
in this Agreement (and to withhold from the amounts so withdrawn, the amount of
any taxes that it is authorized to retain pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Carryover Reserve Fund for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited
in the Carryover Reserve Fund and not required to be deposited therein;
and
(ii) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09. [RESERVED.]
Section 3.10. MAINTENANCE OF HAZARD INSURANCE.
The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other
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than the amounts to be applied to the restoration or repair of the related
Mortgaged Property or property thus acquired or amounts released to the
Mortgagor in accordance with the Master Servicer's normal servicing procedures)
shall be deposited in the Certificate Account. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.
Section 3.11. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS.
(a) Except as otherwise provided in this Section 3.11(a), when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the
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Mortgage Note. Notwithstanding the foregoing, the Master Servicer shall not be
deemed to be in default under this Section 3.11(a) by reason of any transfer or
assumption that the Master Servicer reasonably believes it is restricted by law
from preventing.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person is to enter into an assumption agreement or modification
agreement or supplement to the Mortgage Note or Mortgage that requires the
signature of the Trustee, or if an instrument of release signed by the Trustee
is required releasing the Mortgagor from liability on the Mortgage Loan, the
Master Servicer shall prepare and deliver or cause to be prepared and delivered
to the Trustee for signature and shall direct, in writing, the Trustee to
execute the assumption agreement with the Person to whom the Mortgaged Property
is to be conveyed and such modification agreement or supplement to the Mortgage
Note or Mortgage or other instruments as are reasonable or necessary to carry
out the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person. In connection with any such assumption, no material term of the
Mortgage Note (including, but not limited to, the Mortgage Rate, the amount of
the Scheduled Payment, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the
Gross Margin, the Periodic Rate Cap, the Adjustment Date and any other term
affecting the amount or timing of payment on the Mortgage Loan) may be changed.
In addition, the substitute Mortgagor and the Mortgaged Property must be
acceptable to the Master Servicer in accordance with its underwriting standards
as then in effect. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Co-Trustee the original of such substitution or assumption agreement, which in
the case of the original shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof. Any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Master Servicer as additional
servicing compensation.
Section 3.12. REALIZATION UPON DEFAULTED MORTGAGE LOANS;
DETERMINATION OF EXCESS PROCEEDS AND REALIZED
LOSSES; REPURCHASE OF CERTAIN MORTGAGE LOANS.
(a) The Master Servicer shall use reasonable efforts to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments. In connection with such foreclosure or other conversion, the Master
Servicer shall follow such practices and procedures as it shall deem necessary
or advisable and as shall be normal and usual in its general mortgage servicing
activities and the requirements of the insurer under any Required Insurance
Policy; provided that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation
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Proceeds (respecting which it shall have priority for purposes of withdrawals
from the Certificate Account pursuant to Section 3.08 hereof). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that a
Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Master Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged
Property as soon as practicable in a manner that maximizes the Liquidation
Proceeds, but in no event later than three years after its acquisition by the
Trust Fund or, at the expense of the Trust Fund, the Master Servicer shall
request, more than 60 days prior to the day on which such three-year period
would otherwise expire, an extension of the three-year grace period. In the
event the Trustee shall have been supplied with an Opinion of Counsel (such
opinion not to be an expense of the Trustee) to the effect that the holding by
the Trust Fund of such Mortgaged Property subsequent to such three-year period
will not result in the imposition of taxes on "prohibited transactions" of the
Trust Fund as defined in section 860F of the Code or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding,
the Trust Fund may continue to hold such Mortgaged Property
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(subject to any conditions contained in such Opinion of Counsel) after the
expiration of such three-year period. Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject the Trust Fund to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Master Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of any
such taxes.
The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to a determination by the Master
Servicer that the proceeds of such foreclosure would exceed the costs and
expenses of bringing such a proceeding. The income earned from the management of
any Mortgaged Properties acquired through foreclosure or other judicial
proceeding, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Servicing Fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited into
the Certificate Account. To the extent the income received during a Prepayment
Period is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related Mortgage Loan, such
excess shall be considered to be a partial Principal Prepayment for all purposes
hereof.
The Liquidation Proceeds from any liquidation of a Mortgage
Loan, net of any payment to the Master Servicer as provided above, shall be
deposited in the Certificate Account on the next succeeding Determination Date
following receipt thereof for distribution on the related Distribution Date,
except that any Excess Proceeds shall be retained by the Master Servicer as
additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.
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(b) On each Determination Date, the Master Servicer shall
determine the respective aggregate amounts of Excess Proceeds and Realized
Losses, if any, for the related Prepayment Period.
(c) The Master Servicer, in its sole discretion, shall have
the right to elect (by written notice sent to the Trustee) to purchase for its
own account from the Trust Fund any Mortgage Loan that is 150 days or more
delinquent at a price equal to the Purchase Price; provided, however, that the
Master Servicer may only exercise this right on or before the last day of the
calendar month in which such Mortgage Loan became 150 days delinquent (such
month, the "Eligible Repurchase Month"); provided further, that any such
Mortgage Loan which becomes current but thereafter becomes delinquent may be
purchased by the Master Servicer pursuant to this Section in any ensuing
Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased
hereunder shall be delivered to the Trustee for deposit in the Certificate
Account and the Trustee, upon receipt of such deposit and a Request for Release
from the Master Servicer in the form of Exhibit N hereto, shall release or cause
to be released to the purchaser of such Mortgage Loan the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment
prepared by the purchaser of such Mortgage Loan, in each case without recourse,
as shall be necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan
shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such Mortgage Loan, and all security and
documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
Section 3.13. CO-TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE
FILES.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Master Servicer will promptly
notify the Co-Trustee by delivering a Request for Release substantially in the
form of Exhibit N. Upon receipt of such request, the Co-Trustee shall promptly
release the related Mortgage File to the Master Servicer, and the Co-Trustee
shall at the Master Servicer's direction execute and deliver to the Master
Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Master Servicer, together with the Mortgage Note
with written evidence of cancellation thereon. The Master Servicer is authorized
to cause the removal from the registration on the MERS(R) System of such
Mortgage and to execute and deliver, on behalf of the Trust Fund and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Certificate Account, the Distribution Account, the Carryover Reserve Fund
or the related subservicing account. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any
83
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Co-Trustee shall, upon delivery to the
Co-Trustee of a Request for Release in the form of Exhibit M signed by a
Servicing Officer, release the Mortgage File to the Master Servicer. Subject to
the further limitations set forth below, the Master Servicer shall cause the
Mortgage File or documents so released to be returned to the Co-Trustee when the
need therefor by the Master Servicer no longer exists, unless the Mortgage Loan
is liquidated and the proceeds thereof are deposited in the Certificate Account,
in which case the Co-Trustee shall deliver the Request for Release to the Master
Servicer.
If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the documents
therein that shall have been released by the Co-Trustee to be returned to the
Co-Trustee within 21 calendar days after possession thereof shall have been
released by the Co-Trustee unless (i) the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Certificate Account, and the Master Servicer shall have delivered to the
Co-Trustee a Request for Release in the form of Exhibit N or (ii) the Mortgage
File or document shall have been delivered to an attorney or to a public trustee
or other public official as required by law for purposes of initiating or
pursuing legal action or other proceedings for the foreclosure of the Mortgaged
Property and the Master Servicer shall have delivered to the Trustee an
Officer's Certificate of a Servicing Officer certifying as to the name and
address of the Person to which the Mortgage File or the documents therein were
delivered and the purpose or purposes of such delivery.
Section 3.14. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
MASTER SERVICER TO BE HELD FOR THE TRUSTEE.
Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Co-Trustee as required by this Agreement
all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trust Fund and shall be and remain the sole and exclusive property of the
Trust Fund, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account or Carryover Reserve Fund or in any Escrow Account
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(as defined in Section 3.06), or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Master Servicer shall be entitled to
set off against and deduct from any such funds any amounts that are properly due
and payable to the Master Servicer under this Agreement.
Section 3.15. SERVICING COMPENSATION.
As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain or withdraw from the Certificate Account
out of each payment of interest on a Mortgage Loan included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
Additional servicing compensation in the form of Excess
Proceeds, assumption fees, late payment charges, Prepayment Interest Excess, and
all income and gain net of any losses realized from Permitted Investments shall
be retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(a) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.
Section 3.16. ACCESS TO CERTAIN DOCUMENTATION.
The Master Servicer shall provide to the OTS and the FDIC and
to comparable regulatory authorities supervising Holders of the Certificates and
the examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Master Servicer designated by it.
Nothing in this Section shall limit the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.17. ANNUAL STATEMENT AS TO COMPLIANCE.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before the 120th day after the end of the Master Servicer's fiscal
year, commencing with its 2003 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the Master
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Servicer under this Agreement has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.
Section 3.18. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
STATEMENT; FINANCIAL STATEMENTS.
On or before the later of (i) the 120th day after the end of
the Master Servicer's fiscal year, commencing with its 2003 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2003, the Master Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, the
Seller or any affiliate thereof) that is a member of the American Institute of
Certified Public Accountants to furnish a report to the Trustee, Depositor and
the Seller in compliance with the Uniform Single Attestation Program for
Mortgage Bankers. Copies of such report shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
report is delivered by the Master Servicer to the Trustee. Upon written request,
the Master Servicer shall provide to the Certificateholders its publicly
available annual financial statements (or, for so long as Countrywide Home Loans
Servicing LP is the Master Servicer hereunder, the Master Servicer's parent
company's publicly available annual financial statements), if any, promptly
after they become available.
Section 3.19. THE CAP CONTRACT.
The Seller shall assign all of its right, title and interest
in and to the interest rate cap transactions evidenced by the Cap Contract to,
and shall cause all of its obligations in respect of each such transaction to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and conditions
set forth in the Cap Contract Assignment Agreement. The Cap Contract will be an
asset of the Trust Fund but will not be an asset of any REMIC. The Master
Servicer, on behalf of the Trustee, shall deposit any amounts received from time
to time with respect to the Cap Contract into the Distribution Account.
The Master Servicer, on behalf of the Trustee, shall prepare
and deliver any notices required to be delivered under the Cap Contract.
The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate the Cap Contract, in each case upon the
occurrence of certain events of default or
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termination events to the extent specified thereunder. Upon any such
termination, the Cap Contract Counterparty will be obligated to pay the Trustee
or the Master Servicer for the benefit of the Trust Fund an amount in respect of
such termination. Any amounts received by the Trustee or the Master Servicer for
the benefit of the Trust Fund, as the case may be, in respect of such
termination shall be deposited and held in the Distribution Account to pay Net
Rate Carryover for the Certificates (by deposit of the amount of any such Net
Rate Carryover in the Carryover Reserve Fund for payment to the related
Certificateholders) as provided in Section 4.04(a) on Distribution Dates
following such termination to and including the Cap Contract Termination Date.
On the Cap Contract Termination Date, after all other distributions on such
date, if any such amounts in respect of early termination remain in the
Carryover Reserve Fund, such amounts shall be distributed by the Trustee to the
Class C Certificateholder.
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ARTICLE IV.
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01. ADVANCES.
Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Master Servicer shall be obligated to make
any such Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Advance or a lesser portion of
such Advance would constitute a Nonrecoverable Advance, the Master Servicer
shall deliver (i) to the Trustee for the benefit of the Certificateholders funds
constituting the remaining portion of such Advance, if applicable, and (ii) to
the Depositor, each Rating Agency and the Trustee an Officer's Certificate
setting forth the basis for such determination.
In lieu of making all or a portion of such Advance from its
own funds, the Master Servicer may (i) cause to be made an appropriate entry in
its records relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required to
be distributed pursuant to this Agreement. The Master Servicer shall be entitled
to be reimbursed from the Certificate Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or the related Mortgaged Property or related REO
Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trust Fund pursuant to any applicable provision
of this Agreement, except as otherwise provided in this Section 4.01.
Section 4.02. REDUCTION OF SERVICING COMPENSATION IN
CONNECTION WITH PREPAYMENT INTEREST SHORTFALLS.
In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Master Servicer shall, to the extent of
one-half of the Servicing Fee for such Distribution Date, deposit into the
Certificate Account, as a reduction of the Servicing Fee (but not in excess of
one-half thereof) for such Distribution Date, no later than the close of
business on the Business Day immediately preceding such Distribution Date, an
amount equal to the Prepayment Interest Shortfall; and in case of such deposit,
the Master Servicer shall not be entitled to any recovery or reimbursement from
the Depositor, the Trustee, the Trust Fund or the Certificateholders.
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Section 4.03. [Reserved]
Section 4.04. DISTRIBUTIONS.
(a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority:
(i) to the Class A-1 Certificates and Class A-IO Certificates,
pro rata, the Current Interest and any Interest Carry Forward Amount
for such Class;
(ii) to the Class M-1 Certificates, the Current Interest for
such Class;
(iii) to the Class M-2 Certificates, the Current Interest for
such Class;
(iv) to the Class B-1 Certificates, the Current Interest for
such Class; and
(v) any remainder, as part of the Excess Cashflow.
(b) On each Distribution Date on or prior to the Cap Contract
Termination Date, amounts received in respect of the Cap Contract for such
Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each Class of Certificates (other than the Class A-IO, Class A-R,
Class C and Class P Certificates) to the extent of any Net Rate Carryover for
such Class of Certificates for such Distribution Date sequentially to the Class
A-1, Class M-1, Class M-2 and Class B-1 Certificates, and any remaining amounts
shall be distributed to the Class C Certificateholder; provided, however, that
if the Cap Contract is subject to early termination, early termination payments
shall be held by the Trustee until the Cap Contract Termination Date and
deposited in the Carryover Reserve Fund, as necessary, to pay any Net Rate
Carryover as provided in Section 3.19.
(c) On each Distribution Date, after payment of the amounts
received on the Cap Contract as provided in Section 4.04(b) above, amounts on
deposit in the Carryover Reserve Fund (after deposits therein as provided in
Section 4.04(e)(ii)) shall be allocated by the Trustee to each Class of
Certificates (other than the Class A-IO, Class A-R, Class C and Class P
Certificates) to the extent of any remaining Net Rate Carryover for such Class
of Certificates for such Distribution Date as provided in Section 4.04(e)(ii).
(d) On each Distribution Date, the Principal Distribution
Amount for such Distribution Date shall be allocated by the Trustee from the
Distribution Account in the following order of priority:
(i) with respect to any Distribution Date prior to the
Stepdown Date or as to which a Trigger Event is in effect:
(A) sequentially, to the Class A-R, Class A-1, Class M-1,
Class M-2 and Class B-1 Certificates, in that order, in each case until
the Certificate Principal Balance thereof is reduced to zero;
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(B) any remainder, as part of the Excess Cashflow to the Class
A-R Certificates.
(ii) with respect to each Distribution Date on and after the
Stepdown Date and as to which a Trigger Event is not in effect:
(A) to the Class A-1 Certificates, the Class A-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero;
(B) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero;
(C) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero;
(D) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero; and
(E) any remainder, as part of the Excess Cashflow.
(e) With respect to any Distribution Date, any Excess Cashflow
will be paid to the classes of Certificates as follows:
(i) to the holders of the Classes of Offered Certificates then
entitled to receive distributions in respect of principal, in an amount
equal to the Extra Principal Distribution Amount, payable to such
holders as part of the Principal Distribution Amount pursuant to
Section 4.04(d) above;
(ii) from any remaining Excess Cashflow to the Carryover
Reserve Fund in an amount needed to pay any remaining unpaid Net Rate
Carryover for each Class of Offered Certificates (other than the Class
A-IO Certificates and Class A-R Certificates) (after application of
amounts received on the Cap Contract to pay Net Rate Carryover as
provided in Section 4.04(b)); and then to pay such amount from the
Carryover Reserve Fund, sequentially to the Class A-1, Class M-1, Class
M-2 and Class B-1 Certificates in amount equal to such Net Rate
Carryover for each such Class;
(iii) from any remaining Excess Cashflow, to the Class A-1
Certificates in an amount equal to any remaining unpaid Interest Carry
Forward Amount for such Class;
(iv) from any remaining Excess Cashflow, to the Class M-1
Certificates in an amount equal to any Interest Carry Forward Amount
for such Class;
(v) from any remaining Excess Cashflow, to the Class M-1
Certificates in an amount equal to the Unpaid Realized Loss Amounts for
the such Class;
(vi) from any remaining Excess Cashflow, to the Class M-2
Certificates in an amount equal to any Interest Carry Forward Amount
for such Class;
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(vii) from any remaining Excess Cashflow, to the Class M-2
Certificates in an amount equal to the Unpaid Realized Loss Amounts for
such Class;
(viii) from any remaining Excess Cashflow, to the Class B-1
Certificates in an amount equal to any Interest Carry Forward Amount
for such Class;
(ix) from any remaining Excess Cashflow, to the Class B-1
Certificates in an amount equal to the Unpaid Realized Loss Amounts for
such Class;
(x) from any remaining Excess Cashflow, to the Carryover
Reserve Fund, in an amount equal to the Secondary Carryover Reserve
Fund Deposit;
(xi) from any remaining Excess Cashflow, to the Class P
Certificates, on the earlier of (a) the exercise of the Optional
Termination by the Master Servicer pursuant to Section 9.01 and (b) the
last Distribution Date immediately following the expiration of the
latest Prepayment Charge as identified on the Prepayment Charge
Schedule, any remaining Excess Cashflow shall be paid to the Class P
Certificates, in reduction of the Certificate Principal Balance
thereof, until reduced to zero;
(xii) from any remaining Excess Cashflow, 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 to
reduce the Class C Notional Amount, until the Class C Notional Amount
has been reduced to zero; and
(xiii) any remaining Excess Cashflow, to the Class A-R
Certificates.
(f) On each Distribution Date, an amount equal to all
Prepayment Charges received during the related Prepayment Period will be
distributed to the holders of the Class P Certificates.
(g) To the extent that a Class of Certificates (other than the
Class A-IO, 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 Certificates in the following order of priority:
(i) to the Class B-1 Certificates until the Class B-1
Certificate Principal Balance is reduced to zero;
(ii) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and
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(iii) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least 5 Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with aggregate
principal denominations of not less than $1,000,000 or evidencing a Percentage
Interest aggregating 10% or more with respect to such Class or, if not, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m. Pacific
time on the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall, not later than 9:00 a.m. Pacific time on the Master Servicer
Advance Date, other than any Master Servicer Advance Date relating to any
Distribution Date on which the proceeds of any Optional Termination are being
distributed, (i) furnish by telecopy a statement to the Master Servicer (the
information in such statement to be made available to Certificateholders by the
Trustee on request) setting forth the Interest Funds and Principal Funds for
such Distribution Date and the amount to be withdrawn from the Certificate
Account and (ii) determine (and notify the Master Servicer by telecopy of the
results of such determination) the amount of Advances to be made by the Master
Servicer in respect of the related Distribution Date; provided that no Advance
shall be made if it would be a Nonrecoverable Advance; provided further that any
failure by the Trustee to notify the Master Servicer will not relieve the Master
Servicer from any obligation to make any such Advances. The Trustee shall not be
responsible to recompute, recalculate or verify information provided to it by
the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.
Section 4.05. MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Holder of a Class
of Certificates of the Trust Fund, the Master Servicer, the Seller and the
Depositor a statement setting forth for the Certificates:
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(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate
amount of any Principal Prepayments included therein and (B) the
aggregate of all scheduled payments of principal included therein; (ii)
the amount of such distribution to Holders of each Class allocable to
interest;
(iii) any Interest Carry Forward Amount for each Class;
(iv) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss
Amounts for such Distribution Date;
(v) the aggregate of the Stated Principal Balances of the
Mortgage Loans for the Mortgage Pool;
(vi) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
(vii) the Pass-Through Rate for each Class of Certificates
with respect to the current Accrual Period;
(viii) with respect to the February 2003 Distribution Date,
the Seller Shortfall Interest Requirement (if any) for the related
Master Servicer Advance Date;
(ix) the amount of Advances included in the distribution on
such Distribution Date;
(x) the cumulative amount of Applied Realized Loss Amounts to
date;
(xi) the cumulative amount of claim payments made pursuant to
the Mortgage Insurance Policy and the cumulative amount of claims
rejected or denied under the Mortgage Insurance Policy;
(xii) the number and aggregate principal amounts of Mortgage
Loans: (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1)
30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, and (B) in
foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3)
90 or more days, in each case as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(xiii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan;
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(xiv) and the aggregate Stated Principal Balances of any
Mortgage Loans converted to REO Properties as of the close of business
on the Determination Date preceding such Distribution Date;
(xv) the aggregate Stated Principal Balances of all Liquidated
Loans;
(xvi) with respect to any Liquidated Loan, the loan number and
Stated Principal Balance relating thereto;
(xvii) whether a Trigger Event has occurred;
(xviii) any Net Rate Carryover paid on each Class of
Certificates (other than the Class A-IO, 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-IO, Class A-R, Class C
and Class P Certificates) on such Distribution Date;
(xix) the amount of Prepayment Charges collected or waived by
the Master Servicer;
(xx) [reserved];
(xxi) [reserved]; and
(xxii) the amount, if any, received under the Cap Contract for
such Distribution Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer. The Trustee
will send a copy of each statement provided pursuant to this Section 4.05 to
each Rating Agency. The Trustee may make the above information available to
Certificateholders via the Trustee's website at xxxx://xxx.xxxxxxxxxxxx.xxx.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was 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:
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(i) The original projected principal and interest cash flows
on the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each related
Class of regular and residual interests created hereunder and the
Mortgage Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each related
Class of regular or residual interests created hereunder and to the
Mortgage Loans, together with each constant yield to maturity used in
computing the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of the
related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
related REMIC; and
(vii) Any taxes (including penalties and interest) imposed on
the related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv)
above shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06. [RESERVED]
Section 4.07. [RESERVED]
Section 4.08. CARRYOVER RESERVE FUND.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Carryover Reserve Fund. On the Closing Date, the Seller shall
remit $5,000 to the Trustee, who shall deposit said funds in the Carryover
Reserve Fund. The Carryover Reserve Fund shall be an Eligible Account, and funds
on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement.
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(b) The Trustee shall make withdrawals from the Carryover
Reserve Fund to make distributions pursuant to paragraphs (b), (c) and (e) of
Section 4.04 hereof. Any amounts remaining after the distributions required
pursuant to preceding sentence shall be FIRST maintained in the Carryover
Reserve Fund up to an amount equal to the Secondary Carryover Reserve Fund
Deposit, and SECOND, distributed to the Class C Certificates; provided, however,
that if the Cap Contract is subject to early termination, early termination
payments received on such Cap Contract will be held by the Trustee until the Cap
Contract Termination Date and deposited in the Carryover Reserve Fund as
necessary to cover any Net Rate Carryover on the Certificates entitled thereto
on future Distribution Dates.
(c) Funds in the Carryover Reserve Fund may be invested in
Permitted Investments. Any earnings on such amounts shall be payable to the
Class 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) 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 R Certificates (in respect
of the Class R-I Interest), as the case may be:
(A) first, to the Holders of REMIC I Regular Interest LT-IO,
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 and second, to Holders of REMIC I Regular Interest
LT-1 and REMIC I Regular Interest LT-P 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; and
(B) to the Holders of REMIC I Regular Interest LT-P, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant to this clause;
(2) second, to the Holders of REMIC I Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution Date
after the distributions made pursuant to clause (1) above, allocated as follows:
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(A) to the Holders of REMIC I Regular Interest LT-IO, until
the Uncertificated Principal Balance of REMIC I Regular Interest LT-IO is
reduced to zero;
(B) to the Holders of REMIC I Regular Interest LT-1, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT-1 is reduced to
zero; and
(C) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-I Interest).
Section 4.10. DISTRIBUTIONS ON THE REMIC II REGULAR INTERESTS
(a)(1)(A) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC II to REMIC III on
account of the REMIC II Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-II Interest), as the case may be:
(i) first, to the Holders of REMIC II Regular interest MT-IO-1
and REMIC II Regular interest MT-IO-2, pro rata, 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; then to
Holders of REMIC II Regular Interest MT-AA, REMIC II Regular Interest MT-A1,
REMIC II Regular Interest MT-M1, REMIC II Regular Interest MT-M2, REMIC II
Regular Interest MT-B1, REMIC II Regular Interest MT-ZZ and REMIC II Regular
Interest MT-P, 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 II Regular Interest MT-ZZ
shall be reduced and deferred when the REMIC II Overcollateralized Amount is
less than the REMIC II Overcollateralization Target Amount, by the lesser of (x)
the amount of such difference and (y) the REMIC II Regular Interest MT-ZZ
Maximum Interest Deferral Amount and such amount will be payable to the Holders
of REMIC II Regular Interest MT-A1, REMIC II Regular Interest MT-M1, REMIC II
Regular Interest MT-M2 and REMIC II Regular Interest MT-B1 in the same
proportion as the Overcollateralization Deficiency Amount is allocated to the
Corresponding Certificates;
(ii) second, to the Holders of REMIC II Regular Interests, in an amount
equal to the remainder of the collections on the Mortgage Loans available for
distribution for such Distribution Date after the distributions made pursuant to
clause (i) above, allocated as follows:
(a) to the Holders of REMIC II Regular Interest MT-AA and REMIC II
Regular Interest MT-P, 98.00% of such remainder (other than amounts payable
under clause (d) below), until the Uncertificated Balance of such REMIC II
Regular Interest is reduced to zero, provided, however, that REMIC II Regular
Interest MT-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
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shall be distributed to REMIC II Regular Interest MT-P, until $100 has been
distributed pursuant to this clause;
(b) to the Holders of REMIC II Regular Interest MT-A1, REMIC II Regular
Interest MT-M1, REMIC II Regular Interest MT-M2 and REMIC II Regular Interest
MT-B1, 1.00% of such remainder (other than amounts payable under clause (d)
below), in the same proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated Principal Balances of such
REMIC II Regular Interests are reduced to zero;
(c) to the Holders of REMIC II Regular Interest MT-ZZ, 1.00% of such
remainder (other than amounts payable under clause (d) below), until the
Uncertificated Principal Balance of such REMIC II Regular Interest is reduced to
zero; then
(d) any remaining amount to the Holders of the Class R Certificates (in
respect of the Class R-II Interest); and
provided that REMIC II Regular Interest MT-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 II Regular
Interest I-LTP, 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 II to the Holders of REMIC II Regular
Interest MT-P. The payment of the foregoing amounts to the Holders of REMIC II
Regular Interest MT-P shall not reduce the Uncertificated Balance thereof.
Section 4.11. ALLOCATION OF REALIZED LOSSES ON THE REMIC I AND
REMIC II REGULAR INTERESTS.
(a) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date, first to REMIC I Regular
Interest LT-1 until the Uncertificated Principal Balance of such REMIC I Regular
Interest has been reduced to zero and then to REMIC I Regular Interest LT-IO,
until the Uncertificated Principal Balance of such REMIC I Regular Interest has
been reduced to zero.
(b) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following REMIC II
Regular Interests in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC II Regular Interest MT-AA
and REMIC II Regular Interest MT-ZZ up to an aggregate amount equal to the REMIC
II Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of the REMIC II Regular Interest MT-AA and
REMIC II Regular Interest MT-ZZ up to an aggregate amount equal to the REMIC II
Principal Loss
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Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC II Regular Interest MT-AA, REMIC II Regular Interest
MT-B1 and REMIC II Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Balance of REMIC II Regular Interest MT-B1 has been reduced
to zero; fourth to the Uncertificated Principal Balances of REMIC II Regular
Interest MT-AA, REMIC II Regular Interest MT-M2 and REMIC II Regular Interest
MT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC II Regular Interest MT-M2 has been reduced to zero; and fifth, to the
Uncertificated Principal Balances of REMIC II Regular Interest MT-AA, REMIC II
Regular Interest MT-M1 and REMIC II Regular Interest MT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest MT-M1 has been reduced to zero.
Section 4.12. TERMINATION OF THE MORTGAGE INSURANCE POLICY.
If on any given date the rating of Mortgage Guarantee
Insurance Corporation's claims-paying ability from S&P is downgraded below and
remains below "AA-" from S&P or "Aa3" from Xxxxx'x, the Master Servicer may
direct the Co-Trustee to terminate the Mortgage Insurance Policy and the
Co-Trustee shall act in accordance with such direction. The Master Servicer
hereby covenants and agrees that it will not direct the Co-Trustee to exercise
its right to terminate the Mortgage Insurance Policy unless the Co-Trustee
obtains a mortgage insurance policy that meets the following conditions (any
such mortgage insurance policy that meets the following conditions, the
"Replacement Mortgage Insurance Policy," and the issuer of such policy, the
"Replacement Mortgage Insurer"): (i) such mortgage insurance policy must be
issued by a mortgage insurer that has a rating with respect to its claims-paying
ability at or above "AA-" from S&P or "Aa3" from Xxxxx'x and (ii) such mortgage
insurance policy must cover the Covered Mortgage Loans outstanding as of such
date.
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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-5, 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 Original
Multiples Certificate
Minimum in Excess of Principal
Class Denomination Minimum Balance
------------------ ---------------------- -------------------------------- --------------------------------
A-1 $20,000 $1,000 $773,500,000
A-IO $20,000 $1,000 $ 85,00,000(1)
A-R $99.95(2) N/A $100
M-1 $20,000 $1,000 $29,750,000
M-2 $20,000 $1,000 $25,500,000
B-1 $20,000 $1,000 $21,250,000
C 20% 1% $16,144,218.00
P 20% 1% $100
(1) Notional amount.
(2) The Tax Matters Person Certificate may be issued in a denomination of $0.05.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any affiliate thereof.
Section 5.02. CERTIFICATE REGISTER; REGISTRATION OF TRANSFER
AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any
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Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee in writing the facts
surrounding the Transfer in substantially the forms set forth in Exhibit J (the
"Transferor Certificate") and (i) deliver a letter in substantially the form of
either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee, the Co-Trustee and the Master Servicer shall cooperate with
the Depositor in providing the Rule 144A information referenced in the preceding
sentence, including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
Transfer shall, and does hereby agree to, indemnify the Trustee, the Co-Trustee,
the Depositor, the Seller and the Master
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Servicer against any liability that may result if the Transfer is not so exempt
or is not made in accordance with such federal and state laws.
No Transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate that is a Definitive Certificate, such requirement is satisfied only
by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit K or Exhibit L, or in the event such
Certificate is a Class A-R Certificate, such requirement is satisfied only by
the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code, nor a Person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement to effect such transfer, or (ii) in the case of the Class M-1, Class
M-2 and Class B-1 Certificates (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 any ERISA-Restricted Certificate
which is a Class A-R, Class C or Class P Certificate presented for registration
in the name of an employee benefit plan subject to ERISA, or a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person acting
on behalf of any such plan or arrangement, or using such plan's or arrangement's
assets, an opinion of counsel satisfactory to the Trustee, which opinion of
counsel shall not be an expense of either the Trustee or the Trust Fund,
addressed to the Trustee to the effect that the purchase and holding of such
ERISA-Restricted Certificate 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
Seller, the Master 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 a Class A-R Certificate, in
the event the representation letter referred to in the preceding sentence is not
so furnished, such representation shall be deemed to have been made to the
Trustee by the transferee's (including an initial acquiror's) acceptance of such
ERISA-Restricted Certificate. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate to or on
behalf of an employee benefit plan subject to ERISA or the Code without the
delivery to the Trustee of an opinion of counsel satisfactory to the Trustee as
described above shall be void and of no effect. 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 Co-Trustee, the Master Servicer,
the Seller, any Subservicer and the
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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 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
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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 Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class A-R Certificate hereby
consents to any amendment of this Agreement that, based on an Opinion of Counsel
furnished to the Trustee, is reasonably necessary (a) to ensure that the record
ownership of, or any beneficial interest in, a Class A-R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class A-R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all representation letters
and opinions referred to above in this Section 5.02 in connection with any
Transfers shall be at the expense of the parties to such Transfers.
Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Master Servicer and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the
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Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. All Certificates
surrendered to the Trustee under the terms of this Section 5.03 shall be
canceled and destroyed by the Trustee in accordance with its standard procedures
without liability on its part.
Section 5.04. PERSONS DEEMED OWNERS.
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the contrary.
Section 5.05. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 5.06. BOOK-ENTRY CERTIFICATES.
The Regular Certificates, upon original issuance, shall be
issued in the form of one or more typewritten Certificates representing the
Book-Entry Certificates, to be delivered to the Depository by or on behalf of
the Depositor. Such Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of such Certificates will receive a definitive certificate
representing such Certificate Owner's interest in such Certificates, except as
provided in Section 5.08. Unless and until definitive, fully registered
Certificates ("Definitive Certificates") have been issued to the Certificate
Owners of such Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Seller, the Master Servicer and the
Trustee may deal with the Depository and the Depository Participants for all
purposes (including the making of
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distributions) as the authorized representative of the respective Certificate
Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
Section 5.07. NOTICES TO DEPOSITORY.
Whenever any notice or other communication is required to be
given to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.
Section 5.08. DEFINITIVE CERTIFICATES.
If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the
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Voting Rights evidenced by any Class of Book-Entry Certificates advise the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Trustee shall notify
all Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners of such Class requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall
authenticate and deliver such Definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of such instructions and
each may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of such Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 5.09. MAINTENANCE OF OFFICE OR AGENCY.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the Certificateholders
of any change in such location of any such office or agency.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01. RESPECTIVE LIABILITIES OF THE DEPOSITOR, THE
MASTER SERVICER AND THE SELLER.
The Depositor, the Master Servicer and the Seller shall each
be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
Section 6.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE
MASTER SERVICER OR THE SELLER.
Each of the Depositor and the Seller will keep in full effect
its existence, rights and franchises as a corporation under the laws of the
United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its duties under this Agreement. The Master
Servicer will keep in effect its existence, rights and franchises as a limited
partnership under the laws of the United States or under the laws of one of the
states thereof and will obtain and preserve its qualification or registration to
do business as a foreign partnership in each jurisdiction in which such
qualification or registration is or shall be necessary to protect the validity
and enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Depositor, the Master Servicer or
the Seller may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer or the
Seller shall be a party, or any person succeeding to the business of the
Depositor, the Master Servicer or the Seller, shall be the successor of the
Depositor, the Master Servicer or the Seller, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided that the successor or surviving Person to the Master Servicer shall be
qualified to service mortgage loans on behalf of Xxxxxx Mae or Xxxxxxx Mac.
Section 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE
SELLER, THE MASTER SERVICER AND OTHERS.
None of the Depositor, the Seller, the Master Servicer or any
of the directors, officers, employees or agents of the Depositor, the Seller or
the Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Depositor, the Seller, the
Master Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the
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Depositor, the Seller, the Master Servicer or any such Person from any liability
that would otherwise be imposed by reasons of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Depositor, the Seller, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Master Servicer may rely in good faith on any document of any kind
PRIMA FACIE properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Seller, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Seller or the Master
Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Seller or the Master Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided that any of the Depositor, the
Seller or the Master Servicer may, in its discretion undertake any such action
that it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Seller and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Section 3.08 hereof.
Section 6.04. LIMITATION ON RESIGNATION OF MASTER SERVICER.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor servicer to such
appointment shall have assumed the Master Servicer's responsibilities, duties,
liabilities and obligations hereunder.
Section 6.05. ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS.
The Master Servicer shall, for so long as it acts as servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for
persons performing servicing for mortgage loans purchased by Xxxxxx Mae or
Xxxxxxx Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts
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to obtain a comparable replacement policy or bond from an insurer or issuer,
meeting the requirements set forth above as of the date of such replacement.
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the Trustee
any payment (excluding a payment required to be made under Section 4.01
hereof) required to be made under the terms of this Agreement, which
failure shall continue unremedied for five calendar days and, with
respect to a payment required to be made under Section 4.01 hereof, for
one calendar day, after the date on which written notice of such
failure shall have been given to the Master Servicer by the Trustee,
the Seller or the Depositor, or to the Trustee and the Master Servicer
by the Holders of Certificates evidencing not less than 25% of the
Voting Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement or any
representation or warranty shall prove to be untrue, which failure or
breach shall continue unremedied for a period of 60 days after the date
on which written notice of such failure shall have been given to the
Master Servicer by the Trustee or the Depositor, or to the Trustee by
the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; provided that the sixty-day cure
period shall not apply to the initial delivery of the Mortgage File for
Delay Delivery Mortgage Loans nor the failure to repurchase or
substitute in lieu thereof; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations.
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If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee shall, but only at the direction of the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates,
by notice in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other than
its rights as a Certificateholder hereunder. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. The Trustee shall thereupon make any
Advance described in Section 4.01 hereof subject to Section 3.04 hereof. The
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Master Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Master Servicer
to pay amounts owed pursuant to Article VIII. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be credited
to the Certificate Account, or thereafter be received with respect to the
Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Master
Servicer hereunder, such Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan that was due prior
to the notice terminating such Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which such Master Servicer would have been entitled pursuant to Sections
3.08(a)(i) through (viii), and any other amounts payable to such Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
Section 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all fees, costs and expenses relating to the Mortgage Loans that the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
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appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a Xxxxxx Mae and Xxxxxxx Mac approved
seller/servicer in good standing, that has been approved by the Mortgage
Insurer, that has a net worth of at least $15,000,000, and that is willing to
service the Mortgage Loans and executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer (other than liabilities of
the Master Servicer under Section 6.03 hereof incurred prior to termination of
the Master Servicer under Section 7.01), with like effect as if originally named
as a party to this Agreement; and provided further that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior to
such assignment and delegation will not be qualified or reduced as a result of
such assignment and delegation. No appointment of a successor to the Master
Servicer hereunder shall be effective until the Trustee shall have consented
thereto, and written notice of such proposed appointment shall have been
provided by the Trustee to each Certificateholder. The Trustee shall not resign
as servicer until a successor servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 3.04 hereof, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as servicer maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the
Master Servicer hereunder, either (i) the successor Master Servicer, including
the Trustee if the Trustee is acting as successor Master Servicer, shall
represent and warrant that it is a member of MERS in good standing and shall
agree to comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such
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Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03. NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
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ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01. DUTIES OF TRUSTEE.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee (or the Co-Trustee, to the extent provided in this Agreement)
that are specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee, except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been duly executed by
the proper authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
grossly negligent or acted in bad faith or with willful misfeasance;
and
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(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of Holders
of each Class of Certificates evidencing not less than 25% of the
Voting Rights of such Class relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement.
Section 8.02. CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default that may have occurred,
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by Holders of each Class of Certificates evidencing not less than 25%
of the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than in its commercial capacity as issuer of the
investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
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(ix) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or
thereby.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof at
the trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03. TRUSTEE NOT LIABLE FOR MORTGAGE LOANS.
The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the Certificates.
The Trustee shall not be accountable for the use or application by the Depositor
or the Master Servicer of any funds paid to the Depositor or the Master Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Certificate Account by the Depositor or the Master Servicer.
Section 8.04. TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05. MASTER SERVICER TO PAY TRUSTEE'S FEES AND
EXPENSES.
The Master Servicer covenants and agrees to pay or reimburse
the Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless
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against any loss, liability or expense (i) incurred in connection with any legal
action relating to this Agreement or the Certificates, or in connection with the
performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Trustee's duties hereunder or by
reason of reckless disregard of the Trustee's obligations and duties hereunder
and (ii) resulting from any error in any tax or information return prepared by
the Master Servicer. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Trustee hereunder.
Section 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
Section 8.07. RESIGNATION AND REMOVAL OF TRUSTEE.
The Trustee may at any time resign and be discharged from the
trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Master Servicer and by mailing notice of resignation by first
class mail, postage prepaid, to the Certificateholders at their addresses
appearing on the Certificate Register and each Rating Agency, not less than 60
days before the date specified in such notice when, subject to Section 8.08,
such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee in accordance with Section 8.08 and meeting the qualifications
set forth in Section 8.06. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the
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Depositor, (ii) the Trustee shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or (iii)(A) a tax is imposed with respect to the
Trust Fund by any state in which the Trustee or the Trust Fund is located, (B)
the imposition of such tax would be avoided by the appointment of a different
trustee and (C) the Trustee fails to indemnify the Trust Fund against such tax,
then the Depositor or the Master Servicer may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which
instrument shall be delivered to the Trustee, one copy of which shall be
delivered to the Master Servicer and one copy of which shall be delivered to the
successor trustee.
The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered by the successor Trustee to the Master
Servicer one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
each Rating Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Section 8.08. SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor, its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all 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 Master Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer,
shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
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(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. TAX MATTERS.
It is intended that the Trust Fund shall constitute, and that
the affairs of the Trust Fund shall be conducted so that each of REMIC I, REMIC
II and REMIC III 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,
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on behalf of each REMIC created hereunder to be treated as a REMIC on the
federal tax return of each such REMIC for its first taxable year (and, if
necessary, under applicable state law); (d) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class A-R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (f) to the extent that they are under its
control conduct the affairs of the Trust Fund at all times that any Certificates
are outstanding so as to maintain the status of each REMIC created hereunder as
a REMIC under the REMIC Provisions; (g) not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any REMIC created hereunder; (h) pay, from the sources specified in
the last paragraph of this Section 8.11, the amount of any federal, state and
local taxes, including prohibited transaction taxes as described below, imposed
on any REMIC created hereunder prior to the termination of the Trust Fund when
and as the same shall be due and payable (but such obligation shall not prevent
the Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) sign or cause to be signed federal, state or local income tax
or information returns; (j) maintain records relating to each REMIC created
hereunder, including but not limited to the income, expenses, assets and
liabilities of each such REMIC, and the fair market value and adjusted basis of
the Trust Fund property determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC created hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of any REMIC created hereunder in relation to any tax matter
involving any such REMIC.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within 10 days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon 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
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from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
startup day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, including, without limitation, any federal, state or local tax or
minimum tax imposed upon the Trust Fund pursuant to Sections 23153 and 24872 of
the California Revenue and Taxation Code if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) (x) the Master Servicer, in the case of any such minimum
tax, and (y) any party hereto (other than the Trustee) to the extent any such
other tax arises out of or results from a breach by such other party of any of
its obligations under this Agreement or (iii) in all other cases, or in the
event that any liable party here fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class A-R Certificateholders , and second
with amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: first, to the Class B-1 Certificates (pro rata),
second, to the Class M-2 Certificates (pro rata), third, to the Class M-1
Certificates (pro rata), and fourth, to the Class A-1 Certificates (pro rata).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class A-R Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class A-R
Certificates (and, if necessary, second, from the Holders of the all other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.
The Trustee shall treat the rights of the Class A-1, Class
M-1, Class M-2 and Class B-1 Certificateholders to receive payments from the
Carryover Reserve Fund as rights in an interest rate cap contract written by the
Cap Contract Counterparty with respect to the Net Rate Carryover funded by the
Cap Contract and Excess Cashflow, in favor of the Certificateholders (other than
the Holders of the Class A-IO, Class A-R, Class C and Class P Certificates).
Thus, each Certificate (other than the Class A-IO, Class A-R, Class C and Class
P Certificates) shall be treated as representing ownership of not only REMIC III
Regular Interests, but also ownership of an interest in an interest rate cap
contract. For purposes of determining the issue price of the REMIC III Regular
Interests, the Trustee shall assume that the interest rate cap contract has a
value of $2,125,000.
Section 8.12. CO-TRUSTEE.
(a) The Co-Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Co-Trustee that are specifically required to be
furnished pursuant to any provision of this Agreement shall examine them to
determine whether they conform to the requirements of this Agreement, to the
extent required by this Agreement. If any such instrument is found not to
conform to the requirements
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of this Agreement in a material manner, the Co-Trustee shall take action as it
deems appropriate to have the instrument corrected. In addition, the Co-Trustee
shall act as the insured under the Mortgage Insurance Policy and hereby directs
the Master Servicer, on behalf of the Co-Trustee, to take all actions
appropriate or required of the Co-Trustee under the Mortgage Insurance Policy,
other than the payment of the Mortgage Insurance Premium and obtaining the
approval of the Mortgage Insurer with respect to the appointment of a successor
servicer.
(b) No provision of this Agreement shall be construed to
relieve the Co-Trustee from liability for its own grossly negligent action, its
own gross negligent failure to act or its own misconduct, its grossly negligent
failure to perform its obligations in compliance with this Agreement, or any
liability that would be imposed by reason of its willful misfeasance or bad
faith; provided that:
(i) the duties and obligations of the Co-Trustee shall be
determined solely by the express provisions of this Agreement with the
exception of Section 8.10, the Co-Trustee shall not be liable,
individually or as Co-Trustee, except for the performance of such
duties and obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this Agreement
against the Co-Trustee and the Co-Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Co-Trustee and conforming to the requirements of this Agreement that it
reasonably believed in good faith to be genuine and to have been duly
executed by the proper authorities respecting any matters arising
hereunder; and
(ii) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless the
Co-Trustee was grossly negligent or acted in bad faith or with willful
misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(i) the Co-Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) the Co-Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
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(iv) the Co-Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document;
(v) the Co-Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys; and
(vi) the Co-Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such liability is not assured to it.
(d) The recitals contained herein shall be taken as the
statements of the Depositor or the Master Servicer, as the case may be, and the
Co-Trustee assumes no responsibility for their correctness. The Co-Trustee makes
no representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Co-Trustee's execution and authentication of the
Certificates. The Co-Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master Servicer.
(e) The Co-Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the same rights as it would
have if it were not the Co-Trustee.
(f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services are
not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Co-Trustee and any director,
officer, employee or agent of the Co-Trustee shall be indemnified by the Master
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement or the
Certificates, or in connection with the performance of any of the Co-Trustee's
duties hereunder, other than any loss, liability or expense
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incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Co-Trustee's duties hereunder or by reason of reckless
disregard of the Co-Trustee's obligations and duties hereunder and (ii)
resulting from any error in any tax or information return prepared by the Master
Servicer. Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Co-Trustee hereunder.
(g) The Co-Trustee hereunder shall, at all times, be a
corporation or association organized and doing business under the laws of a
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by federal or state authority
and with a credit rating that would not cause any of the Rating Agencies to
reduce their respective ratings of any Class of Certificates below the ratings
issued on the Closing Date (or having provided such security from time to time
as is sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.12 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Co-Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.12, the Co-Trustee shall resign immediately in
the manner and with the effect specified in paragraph (h) below. The corporation
or national banking association serving as Co-Trustee may have normal banking
and trust relationships with the Depositor, the Seller and the Master Servicer
and their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
(h) The Co-Trustee may at any time resign and be discharged
from the trusts hereby created by giving 30 days prior written notice of
resignation to the Trustee, the Depositor and the Master Servicer. Upon such
resignation the Trustee (x) may appoint a successor Co-Trustee meeting the
requirements in paragraph (g) above and acceptable to the Master Servicer (in
its sole discretion), so long as such Co-Trustee executes and delivers to the
other parties hereto an instrument agreeing to be bound by the provisions of
this Agreement or (y) may if permitted by the Master Servicer (in its sole
discretion) assume the rights and duties of the resigning Co-Trustee so long as
the Trustee executes and delivers an instrument to that effect.
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ARTICLE IX.
TERMINATION
Section 9.01. TERMINATION UPON LIQUIDATION OR REPURCHASE OF
ALL MORTGAGE LOANS.
Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Seller and the Trustee created hereby shall terminate upon the earlier of (a)
the purchase by the Master Servicer of all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at the price equal to the sum of (i)
100% of the Stated Principal Balance of each Mortgage Loan in the Trust Fund
(other than in respect of REO Property), (ii) accrued interest thereon at the
applicable Mortgage Rate (or, if such repurchase is effected by the Master
Servicer, at the applicable Net Mortgage Rate), (iii) the appraised value of any
REO Property in the Trust Fund (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Master Servicer and the Trustee and (iv) any unreimbursed
Servicing Advances, and the principal portion of any unreimbursed Advances, made
on the Mortgage Loans prior to the exercise of such repurchase and (b) the later
of (i) the maturity or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and the disposition of all
REO Property and (ii) the distribution to related Certificateholders of all
amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States
to the Court of St. James's, living on the date hereof and (ii) the Latest
Possible Maturity Date.
The right to purchase all Mortgage Loans and REO Properties by the
Master Servicer (the party exercising such purchase option, the "Terminator")
pursuant to clause (a) above shall be conditioned upon the Stated Principal
Balance of the Mortgage Loans, at the time of any such repurchase, aggregating
ten percent (10%) or less of the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Section 9.02. FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds in the Certificate Account, the
Master Servicer shall direct the Trustee to send a final distribution notice
promptly to each Certificateholder or (ii) the Trustee determines that a Class
of Certificates shall be retired after a final distribution on such Class, the
Trustee shall notify the related Certificateholders within five (5) Business
Days after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately following
Distribution Date. Any final distribution made pursuant to the immediately
preceding sentence will be made only upon presentation and surrender of the
related Certificates at the Corporate Trust Office of the Trustee. If the Master
Servicer elects to
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terminate the Trust Fund pursuant to clause (a) of Section 9.01, at least 20
days prior to the date notice is to be mailed to the Certificateholders, such
electing party shall notify the Depositor and the Trustee of the date such
electing party intends to terminate the Trust Fund and of the applicable
repurchase price of the related Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on related
Certificates will be made upon presentation and surrender of such Certificates
at the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of such Certificates at the office therein specified.
The Master Servicer will give such notice to each Rating Agency at the time such
notice is given to the affected Certificateholders.
In the event such notice is given, the Master Servicer shall
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
related Certificates. Upon such final deposit and the receipt by the Trustee of
a Request for Release therefor, the Co-Trustee shall promptly release to the
Master Servicer the Mortgage Files for the related Mortgage Loans.
Upon presentation and surrender of the related Certificates,
the Trustee shall cause to be distributed to Certificateholders of each affected
Class the amounts allocable to such Certificates held in the Distribution
Account (and, if applicable, the Carryover Reserve Fund) in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not
surrender related Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R Certificates shall be entitled to all unclaimed
funds and other assets that remain subject hereto.
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Section 9.03. ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event the Master Servicer exercises its purchase
option on the Mortgage Loans, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been supplied
with an Opinion of Counsel, at the expense of the Master Servicer, to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer
shall prepare a plan of complete liquidation and shall otherwise satisfy all the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained at the
expense of the Master Servicer;
(2) During such 90-day liquidation period, and at or
prior to the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust Fund
for cash; and
(3) At the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on hand
(other than cash retained to meet claims) related to such Class of Certificates,
and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Certificateholders.
(c) The Trustee as agent for each REMIC created hereunder
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Master Servicer, and, together with the holders of the
Class A-R Certificates, agree to take such other action in connection therewith
as may be reasonably requested by the Master Servicer.
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ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01. AMENDMENT.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee, without the consent
of any of the Certificateholders to cure any ambiguity, to correct or supplement
any provisions herein, to make such other provisions with respect to matters or
questions arising under this Agreement, as shall not be inconsistent with any
other provisions herein or to give effect to the expectations of the investors
if such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of Certificateholders representing not
less than 51% of the Voting Rights of each Class of Certificates affected by
such amendment.
The Trustee, the Depositor, the Master Servicer and the Seller
may also at any time and from time to time amend this Agreement, without the
consent of the Certificateholders, to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or appropriate to maintain the
qualification of the Trust Fund as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on the Trust Fund pursuant to the
Code that would be a claim against the Trust Fund at any time prior to the final
redemption of the Certificates, provided that the Trustee have been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee, to the
effect that such action is necessary or appropriate to maintain such
qualification or to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee and the Holders of
each Class of Certificates 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 described in (i), without the consent of the Holders of Certificates of such
Class
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evidencing 66% or more of the Voting Rights of such Class, or (iii) reduce the
aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall be an expense of
the party requesting such amendment but in any case shall not be an expense of
the Trustee, to the effect that such amendment will not cause the imposition of
any tax on the Trust Fund or the Certificateholders or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel, satisfactory to the
Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect in
any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required to
be reached pursuant to this Section 10.01.
Section 10.02. RECORDATION OF AGREEMENT; COUNTERPARTS.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE
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OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND
THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 10.04. INTENTION OF PARTIES.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute sale
thereof to the Trustee. It is, further, not the intention of the parties that
such conveyance be deemed a pledge thereof by the Depositor to the Trustee.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other reason
this Agreement is held or deemed to create a security interest in such assets,
then (i) this Agreement shall be deemed to be a security agreement (within the
meaning of the Uniform Commercial Code of the State of New York) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the assets of the Trust Fund, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Agreement. The Depositor
shall arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05. NOTICES.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 2.04 and 3.12; and
132
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(i) Each report to Certificateholders described in Section
4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the Depositor,
CWABS, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx
Xxxxx, with a copy to the same address, Attention: Legal Department; (ii) in the
case of the Seller, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx, with a copy to the same address,
Attention: Legal Department, or such other address as may be hereafter furnished
to the Depositor and the Trustee by the Master Servicer in writing; (iii) in the
case of the Master Servicer, Countrywide Home Loans Servicing LP, 000
Xxxxxxxxxxx Xxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxx or such
other address as may be hereafter furnished to the Depositor and the Trustee by
the Master Servicer in writing; (iv) in the case of the Trustee, The Bank of New
York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Corporate Trust
MBS Administration, CWABS, Series 2003-BC1, or such other address as the Trustee
may hereafter furnish to the Depositor or the Master Servicer; (v) in the case
of the Co-Trustee, BNY Western Trust Company, a subsidiary of The Bank of New
York Company Inc., 000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx,
00000, Attention: MBS Support Services; and (vi) in the case of the Rating
Agencies, (x) Xxxxx'x Investors Service, Inc., Attention: ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (y)
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., Attention: Mortgage Surveillance Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
133
Section 10.07. ASSIGNMENT.
Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 6.02, this Agreement may not be assigned
by the Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
134
Section 10.09. INSPECTION AND AUDIT RIGHTS.
The Master Servicer agrees that, on reasonable prior notice,
it will permit any representative of the Depositor, the Seller or the Trustee
during the Master Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Master Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor, the Seller or the Trustee and to discuss its affairs, finances and
accounts relating to the Mortgage Loans with its officers, employees and
independent public accountants (and by this provision the Master Servicer hereby
authorizes such accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by the
Depositor, the Seller or the Trustee of any right under this Section 10.09 shall
be borne by the party requesting such inspection; all other such expenses shall
be borne by the Master Servicer.
Section 10.10. CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
* * *
135
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Seller, the Trustee and the Co-Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
CWABS, INC.,
as Depositor
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Assistant Treasurer
136
BNY WESTERN TRUST COMPANY,
not in its individual capacity,
but solely as Co-Trustee
By: /s/ Xxxxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Xxxxx Xxxxxxx, personally known to me on the
basis of satisfactory evidence to be a Executive Vice President of Countrywide
Home Loans, Inc., one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Xxxxx Xxxxxxx, personally known to me on the
basis of satisfactory evidence to be a Senior Vice President of Countrywide GP,
Inc., the general partner of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such corporation and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Xxxxx Xxxxxxx, personally known to me on the
basis of satisfactory evidence to be 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]
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Xxxx Xxxxxx, 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]
000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Xxxxxxxxx Xxxxxx, personally known to me on the
basis of satisfactory evidence to be a Vice President of BNY Western Trust
Company, a California banking corporation that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
142
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class A-1 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-1
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class A-IO Certificate
as delivered.
[See appropriate documents delivered at closing.]
A-2
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-1 Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-3
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-2 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-4
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class B-1 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-5
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
Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing]
D-1
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.
[See appropriate documents delivered at closing]
E-1
Exhibit F-1 and F-2
Exhibit F-1 and F-2 are schedules of Mortgage Loans
[Delivered to Trustee at closing and on file with the Trustee]
F-1 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 January
1, 2003 among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee, and BNY Western Trust Company, as
Co-Trustee, relating to the Asset-Backed
Certificates, Series 2003-BC1
-----------------------------------------------------
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 January
1, 2003 among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New
York, as Trustee, and BNY Western Trust Company, as
Co-Trustee, relating to the Asset-Backed
Certificates, Series 2003-BC1
----------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) the Co-Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to the
Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related
Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage[, and in the case of each
Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting thereon the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which
such Mortgage has been recorded;
G-2-1
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2003-BC1, CWABS, Inc., by
The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement dated as of
January 1, 2003, without recourse", or, in the case of each
Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment
relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such Mortgage [(noting the presence of a MIN in the case of
each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto
or, in the event such original title policy has not been
received from the insurer, any one of an original title
binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title
company, with the original policy of title insurance to be
delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage
G-2-2
File of any of the Mortgage Loan identified on the Mortgage Loan Schedule or
(ii) the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
G-2-3
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:________________________
Name:
Title:
G-2-4
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of January
1, 2003 (the "Pooling and Servicing Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, The Bank of New York, as Trustee,
and BNY Western Trust Company, as Co-Trustee,
relating to the Asset-Backed Certificates, Series
2003-BC1
-----------------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement. The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Co-Trustee has received:
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;
in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2003-BC1, CWABS, Inc., by The Bank of New York, a
New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of January 1, 2003, without recourse", or,
in the case of each Mortgage Loan with respect to property located in
the State of California that is not a MERS Mortgage Loan, a duly
executed assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in
G-3-1
recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment
relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE BANK OF NEW YORK,
as Trustee
By:______________________
Name:
Title:
G-3-2
EXHIBIT G-4
[RESERVED]
G-4
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement dated as of January 1, 2003
(the "Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The
Bank of New York, as Trustee, and BNY Western Trust Company,
as Co-Trustee, relating to the Asset-Backed Certificates,
Series 2003-BC1
------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) the
Co-Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage[, and in the case of each Mortgage Loan
that is a MERS Mortgage Loan, the original Mortgage, noting thereon the presence
of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed Certificates,
Series 2003-BC1, CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the Pooling
H-1
and Servicing Agreement dated as of January 1, 2003, without recourse", or, in
the case of each Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage in blank (each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of and transfer to
the assignee thereof, under the Mortgage to which such assignment relates);
(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 January 1, 2003
(the "Agreement"), by and among CWABS, Inc., as depositor (the "Depositor"),
Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, 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
I-1
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the transferee contemplated hereby null and void.
6. The transferee agrees to require a Transfer Affidavit from any Person to
whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit 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
* * *
I-3
IN WITNESS WHEREOF, the transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____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-4
EXHIBIT 1
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
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-5
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
I-6
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 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-7
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS A-R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed
Certificates, Series 2003-BC1
-----------------------------
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 January 1,
2003, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee.
Very truly yours,
__________________________________
Name of Transferor
By: ______________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2003-BC1, 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 January 1,
2003, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee.
Very truly yours,
___________________________
Name of Transferor
By: _______________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2003-BC1, 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 permitted 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
K-1
respect thereto, or taken any other action which would result in a violation of
Section 5 of the Act, and (g) we will not sell, transfer or otherwise dispose of
any Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of January 1,
2003, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee.
Very truly yours,
___________________________
Name of Transferee
By: _______________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2003-BC1, 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 permitted 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
L-1
action, that would constitute a distribution of the Certificates under the
Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act. All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of January 1, 2003, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The
Bank of New York, as Trustee, and BNY Western Trust Company, as Co-Trustee.
L-2
ANNEX 1 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
___ BANK. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, A COPY OF WHICH
IS ATTACHED HERETO.
___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.
L-3
___ BROKER-DEALER. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
___ INSURANCE COMPANY. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of a State, territory
or the District of Columbia.
___ STATE OR LOCAL PLAN. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
___ ERISA PLAN. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
___ INVESTMENT ADVISOR. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940.
___ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958.
___ BUSINESS DEVELOPMENT COMPANY. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated
L-4
subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
______________________
Print Name of Buyer
By:___________________
Name:
Title:
Date:_________________
L-5
ANNEX 2 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $______ in securities (other than the
excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $_______ in securities
(other than the excluded securities referred to
below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
L-6
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
__________________________________
Print Name of Buyer or Adviser
By: ______________________________
Name:
Title:
IF AN ADVISER:
__________________________________
Print Name of Buyer
Date: ____________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Co-Trustee)
Loan Information
Name of Mortgagor:
-------------------------------------------
Master Servicer
Loan No.:
-------------------------------------------
Co-Trustee
Name:
-------------------------------------------
Address:
-------------------------------------------
Co-Trustee
Mortgage File No.:
-------------------------------------------
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Co-Trustee for the
Holders of Asset-Backed Certificates, Series 2003-BC1, 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 January 1, 2003 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, the Trustee and
the Co-Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum
of $________, made by __________________, payable to, or endorsed to
the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
M-1
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's
Office of the County of __________, State of _______________ in
book/reel/docket _______________ of official records at page/image
_____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trust Fund, solely for
the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit
the Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Master Servicer assert or seek to assert any claims or
rights of setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Co-Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trust Fund, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
[Master Servicer]
By _______________________
Its _______________________
Date: _________________, ____
M-2
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2003-BC1
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
____________ _____________________ DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
Exhibit O is a photocopy
of the Depository Agreement
as delivered.
[see appropriate documents delivered at closing]
O-1
EXHIBIT P
FORM OF MORTGAGE NOTE AND MORTGAGE
P-1
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
FORM OF THE CAP CONTRACT
BANK OF AMERICA N. A.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Tel 000-000-0000
Fax 000-000-0000
TO: CWABS Asset-Backed Certificates, Series 0000-XX0
x/x Xxx Xxxx xx Xxx Xxxx
as Trustee for CWABS Asset-Backed Certificates,
Series 2003-BC1
000 Xxxxxxx Xxxxxx - 0X
Xxx Xxxx, Xxx Xxxx
Corporate Trust, MBS Administration
TEL: [______________]
FAX: [______________]
FROM: Bank of America, N.A.
000 Xxxxx Xxxxxx Xxxxx - Xxxxx
0000
Xxxxxxx, Xxxxxxxx 00000
Xxxxx Xxxxxxxxx / Xxxx
Xxxxxx
Date: [______________]
Our Reference No. [______________]
Internal Tracking Nos. [______________]
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction originally entered into between Bank of America, N.A.. and
Countrywide Home Loans, Inc. on December 20, 0000 (Xxxx xx Xxxxxxx reference
number 3017354), which such Transaction is currently between The Bank of New
York solely as trustee for CWABS Asset-Backed Certificates, Series 2003-BC1
("Party B") and Bank of America, N.A. ("Party A", each a "party" and together
"the parties") pursuant to the terms of that certain Assignment Agreement dated
January 28, 2003 (the "Transaction").
This letter agreement constitutes a "Confirmation" and the definitions and
provisions
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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 this
Confirmation, this Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, the parties agree that for the purposes of this Transaction, this
Confirmation will supplement, form a part of, and be subject to an agreement in
the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) as if
the parties had executed an agreement in such form (but without any Schedule
except for the election of (i) the laws of the State of New York (without
reference to choice of law doctrine) as the governing law and (ii) USD as the
Termination Currency) on the Trade Date of the Transaction (the "Agreement"). In
the event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purpose of this
Transaction.
Each party represents to the other party and will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent a
written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction)
(I) NON-RELIANCE. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgement 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 that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. Further, such party has not received from the other
party any assurance or guarantee as to the expected results of that Transaction.
(II) EVALUATION AND UNDERSTANDING. It is capable of evaluation 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.
(III) STATUS OF PARTIES. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
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1. In this Confirmation "Party A" means Bank of America, N.A. and "Party B"
means CWABS Asset-Backed Certificates, Series 2003-BC1
2. The terms of this Transaction to which this Confirmation relates are as
follows:
Notional Amount:
Trade Date:
Effective Date:
Assignment Effective Date:
Termination Date: [____________], subject to adjustment
in accordance with the Modified
Following Business Day Convention
Amortization: Applicable (see Schedule A attached
hereto)
FIXED AMOUNTS:
Fixed Payer: Party B
II.
FIXED RATE PAYER
Payment Dates: Not Applicable
Fixed Amount: Not Applicable
FLOATING AMOUNTS:
III. FLOATING RATE
Payer: Party A
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Cap Rate: 5.13000%
Floating Rate Payer Payment
Dates: One Business Day prior
to the end of each
Calculation Period,
subject to adjustment in
accordance with the
Modified Following
Business Day Convention.
Floating Rate Payer Calculation
Period End Dates: The 25th of each month,
commencing
[______________] and
ending on the
Termination Date,
subject to adjustment in
accordance with the
Modified Following
Business Day Convention
Floating Rate for the
Initial Calculation Period: To be set
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each
Calculation Period
Business Days: New York, London
Calculation Agent: Party A
3. RECORDING OF CONVERSATIONS:
Each party to this Transaction acknowledges and agrees to the tape
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recording of conversations between the parties to this Transaction
whether by one or other or both of the parties or their agents,
and that any such tape recordings may be submitted in evidence in
any Proceedings relating to the Agreement and/or this Transaction.
4. ACCOUNT DETAILS:
Payments to Bank of America, N.A.:
USD
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ABA #: 000000000
ATTN: BOFAUS3N
NAME: BANK OF AMERICA NA
CITY: Charlotte
ACCT: 6550219386
ATTN: RATE DERIVATIVE SETTLEMENTS
ATTN: XXXXXX0XXXX
Payments to CWABS Asset-Backed Certificates, Series 2003-BC1
c/o The Bank of New York
USD
NAME: THE BANK OF NEW YORK
ABA #: 000-000-000
GLA #: 111-565
FFC TAS ACCT: 082255
ATTN: Xxxx X'Xxxxxxx
(000) 000-0000
5. OFFICES:
The Office of Party A for this
Transaction is: Charlotte, NC
Please send reset notices to fax no. (000-000-0000)
The Office of Party B for this
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Transaction is:
6. GOVERNING LAW: The Laws of the State of New York
(without reference to the conflict of
laws provisions thereof)
7. ADDITIONAL Notwithstanding the terms of Sections
PROVISIONS: 5 and 6 of the Master Agreement, the
provisions of Sections 5(a)(ii),
5(a)(iii), 5(a)(iv), 5(a)(v) and
5(a)(vi) shall not apply to Party A or
Party B.
8. TRANSFER, AMENDMENT No transfer, amendment or assignment
AND ASSIGNMENT: of this Transaction shall be permitted
by either party unless each of Moody's
Investors Services, Inc. ("Moody's")
and Standard & Poors Ratings Group, a
Division of the XxXxxx-Xxxx Companies,
Inc. ("S&P") has been provided notice
of such transfer, amendment or
assignment in writing.
9. PROCEEDINGS: Party A shall not institute against or
cause any other person to institute
against, or join any other person in
instituting against, Party B any
bankruptcy, reorganization,
arrangement, insolvency or liquidation
proceedings, or other proceedings
under any federal or state
R-6
bankruptcy or similar law for a period
of one year and one day following
payment in full of the CWABS
Asset-Backed Certificates, Series
2003-BC1.
10. SET-OFF: The provisions for Set-off set forth
in Section 6(e) of the Agreement shall
not apply for purposes of this
Transaction.
11. DOWNGRADE: If a Ratings Event (as defined below)
occurs with respect to Party A, then
Party A shall, at its own expense, (i)
assign this Transactions hereunder to
a third party within thirty (30) days
of such Ratings Event that meets or
exceeds, or as to which any applicable
credit support provider meets or
exceeds, the Approved Ratings
Thresholds (as defined below) and that
is approved by Party B on terms
substantially similar to this
Confirmation and (ii) deliver
collateral, in an amount equal to the
Exposure (as defined
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below), and an executed ISDA Credit
Support Annex (satisfactory to Party
B) within thirty (30) days of such
Ratings Event and subject to S&P's and
Moody's written confirmation that
delivery of such collateral in the
context of such downgrade will not
result in a withdrawal, qualification
or downgrade of the then current
ratings assigned to the CWABS
Asset-Backed Certificates Series
2003-BC1 (the "Certificates"). For
purposes of this Transaction, a
"RATINGS EVENT" shall occur with
respect to Party A, if short-term
certificates of deposit cease to be
rated at least "A-1" by S&P, and at
least "P-1" by Moody's (including in
connection with a merger,
consolidation or other similar
transaction by Party A) such ratings
being referred to herein as the
"APPROVED RATINGS THRESHOLDS." Only
with respect to such Ratings Event,
"EXPOSURE" shall mean the greater of
the following: (i) the xxxx-to-market
value of the Transaction as of the
Valuation Date (as such
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term is defined in the ISDA Credit
Support Annex); (ii) the amount of the
next payment due under the Transaction
and (iii) one percent of the Notional
Amount for the respective Calculation
Period.
12. FINANCIAL INSTITUTION. Party A is a "financial institution"
within the meaning of the Federal
Deposit Insurance Corporation
Improvement Act of 1991 as
supplemented by Regulation EE of the
Federal Reserve Board.
13. ELIGIBLE CONTRACT PARTICIPANT. Party A is an "eligible contract
participant" as such term is defined
in Section 1a(12) of the Commodity
Exchange Act, as amended."
Please confirm that the foregoing correctly sets forth the terms
and conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no. (000) 000-0000).
Failure to respond within such period shall not affect the
validity or enforceability of this Transaction, and shall be deemed to
be an affirmation of the terms and conditions contained herein, absent
manifest error.
R-9
Yours Sincerely,
Bank of America, N.A.
Authorized Signatory
Accepted and confirmed as of the date first written:
CWABS Asset-Backed Certificates, Series 2003-BC1
By The Bank of New York
Not in is individual capacity but solely as Trustee
For CWABS Asset-Backed Certificates, Series 2003-BC1
By:_____________ ________________
Name:______________________________
Title: _______________________________
Our Reference # 3017354
R-10
SCHEDULE OF NOTIONAL AMOUNTS
(all such dates subject to adjustment in accordance with the
Business Day Convention)
APPLICABLE NOTIONAL
-------------------
FROM AND INCLUDING TO BUT EXCLUDING AMOUNT (USD)
------------------ ---------------- ------------
Effective Date [ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
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Termination Date [ ]
R-11
EXHIBIT S
[FORM OF THE CAP CONTRACT ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of [_____________] ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK, not in an individual capacity but as Trustee for CWABS, Inc. Asset-Backed
Certificates, Series 2003-BC1 ("Assignee"), pursuant to a Pooling and Servicing
Agreement dated as of January 1, 2003 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as depositor, Assignor, as seller, Countrywide Home Loans
Servicing LP, as master servicer, Assignee, as trustee, and BNY Western Trust
Company, as co-trustee, and BANK OF AMERICA, N.A. ("Remaining Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, effective as of [_________________], Assignor desires to
assign all of its rights and delegate all of its duties and obligations to
Assignee under that certain Transaction (the "Assigned Transaction") as
evidenced by the certain confirmation and agreement dated January 28, 2003 whose
reference number is [___________] (the "Confirmation and Agreement"), a copy of
which is attached hereto as Exhibit I;
WHEREAS, Assignor and Remaining Party have executed and delivered the
Confirmation and Agreement in lieu of negotiating both an ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") and a
Schedule thereto;
WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction, including any modifications agreed to by the parties; and
WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party desires
to grant such consent in accordance with the terms hereof
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Effective as of and from
[________________] (the "Effective Date"), Assignor hereby assigns all of its
rights and delegates all of its duties and
S-1
obligations to Assignee and Assignee hereby assumes all Assignor's rights,
duties, and obligations under the Assigned Transaction arising on or after the
Effective Date.
2. RELEASE. Effective as of and from the Effective Date, Remaining
Party and Assignor hereby release one another from all duties and obligations
owed under and in respect of the Assigned Transaction, and Assignor hereby
terminates its rights under and in respect of the Assigned Transaction.
3. LIMITATION ON LIABILITY. Assignor and Remaining Party agree to the
following: (a) the sole recourse in respect of the obligations of Assignee
hereunder and under the Assigned Transaction shall be to the Trust Fund (as
defined in the Pooling and Servicing Agreement); (b) The Bank of New York
("BONY") is entering into this Assignment Agreement solely in its capacity as
trustee and not in its individual capacity under the Pooling and Servicing
Agreement; and (c) in no case shall BONY (or any person acting as successor
trustee under the Pooling and Servicing Agreement) be personally liable for or
on account of any of the statements, representations, warranties, covenants or
obligations stated to be those of Assignor under the terms of the Assigned
Transaction, all such liability, if any, being expressly waived by Assignor and
Remaining Party and any person claiming by, through or under either such party.
4. CONSENT AND ACKNOWLEDGMENT OF REMAINING PARTY. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of all
the rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement. In addition, Remaining Party hereby
acknowledges that the responsibilities of Assignee under the Assigned
Transaction will be performed on its behalf by Countrywide Home Loans Servicing
LP, as master servicer under the Pooling and Servicing Agreement.
5. REPRESENTATIONS. Each party hereby represents and warrants to the
other parties as follows:
(a) It is duly organized, validly existing and in good standing under
the laws of its organization or incorporation;
(b) It has the power to execute and deliver this Assignment Agreement;
and
(c) Its obligations under this Assignment Agreement constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms.
Each of Assignor and Remaining Party represents that no event or
condition has occurred that constitutes an Event of Default, a Potential Event
of Default or, to the party's knowledge, a Termination Event (as such terms are
defined in the Confirmation and Agreement), with respect to the party, and no
such event would occur as a result of the party's entering into or performing
its obligations under this Assignment Agreement.
6. INDEMNITY. Each of Assignor and Remaining Party hereby agrees to
indemnify and hold harmless Assignee with respect to any and all claims arising
under the Assigned
S-2
Transaction prior to the Effective Date. Each of Assignee (subject to the
limitations set forth in paragraph 3 above) and Remaining Party hereby agrees to
indemnify and hold harmless Assignor with respect to any and all claims arising
under the Assigned Transaction on or after the Effective Date.
7. GOVERNING LAW. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
8. NOTICES For the purposes of this Assignment Agreement and Section
12(a) of the Assigned Transaction, the addresses for notices or communications
are as follows: (i) in the case of Assignor, Countrywide Home Loans, Inc., 0000
Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxx, with a copy
to the same address, Attention: Legal Department, or such other address as may
be hereafter furnished in writing to Assignee and Remaining Party; (ii) in the
case of Assignee, The Bank of New York, 000 Xxxxxxx Xxxxxx - 0X, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Trust MBS Administration, CWABS, Inc. Series
2003-BC1, or such other address as may be hereafter furnished in writing to
Assignor and Remaining Party; and (iii) in the case of Remaining Party, 000
Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: [DPC
Manager], facsimile (000) 000-0000, or such other address as may be hereafter
furnished in writing to Assignor and Assignee.
9. PAYMENTS All payments remitted by Remaining Party under the Assigned
Transaction shall be made by wire transfer according to the following
instructions:
The Bank of New York
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: [____________]
Attn: Xxxx X'Xxxxxxx
(000) 000-0000
10. COUNTERPARTS This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission), each of which
when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same instrument.
S-3
IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement
as of the date first above written. COUNTRYWIDE HOME LOANS, INC.
By:____________________________
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
THE BANK OF NEW YORK, not in an
individual capacity but as
Trustee for CWABS, Inc.,
Asset-Backed Certificates,
Series 2003-BC1
By:___________________________
Name:
Title:
BANK OF AMERICA, N.A.
By:___________________________
Name:
Title:
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