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 August 1, 2003
______________________________________
ASSET-BACKED CERTIFICATES, SERIES 2003-BC4
Table of Contents
ARTICLE I
DEFINITIONS.......................................................................................................3
Section 1.01 Defined Terms..........................................................................3
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES...................................................................................54
Section 2.01 Conveyance of Mortgage Loans..........................................................54
Section 2.02 Acceptance of the Mortgage Loans......................................................58
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the
Seller................................................................................60
Section 2.04 Representations and Warranties of the Depositor.......................................73
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases...........................................................................74
Section 2.06 Authentication and Delivery of Certificates...........................................75
Section 2.07 Covenants of the Master Servicer......................................................75
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS................................................................................................77
Section 3.01 Master Servicer to Service Mortgage Loans.............................................77
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer.......................78
Section 3.03 Rights of the Depositor, the Seller and the Trustee in Respect of the Master
Servicer..............................................................................79
Section 3.04 Trustee to Act as Master Servicer.....................................................79
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution
Account; Seller Shortfall Interest Requirement........................................80
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts
.....................................................................................83
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage
Loans.................................................................................83
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution Account
and the Carryover Reserve Fund........................................................84
Section 3.09 [Reserved.]...........................................................................86
Section 3.10 Maintenance of Hazard Insurance.......................................................86
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.............................87
i
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans
.....................................................................................88
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files....................................91
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held
for the Trustee.......................................................................92
Section 3.15 Servicing Compensation................................................................93
Section 3.16 Access to Certain Documentation.......................................................93
Section 3.17 Annual Statement as to Compliance.....................................................94
Section 3.18 Annual Independent Public Accountants' Servicing Statement; Financial
Statements............................................................................94
Section 3.19 The Cap Contracts.....................................................................94
Section 3.20 Prepayment Charges....................................................................95
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER..................................................................................97
Section 4.01 Advances..............................................................................97
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls...................................................................98
Section 4.03 [Reserved]............................................................................98
Section 4.04 Distributions.........................................................................98
Section 4.05 Monthly Statements to Certificateholders.............................................104
Section 4.06 [Reserved]...........................................................................107
Section 4.07 [Reserved]...........................................................................107
Section 4.08 Carryover Reserve Fund...............................................................107
Section 4.09 Distributions on the REMIC I Regular Interests.......................................108
Section 4.10 [Reserved]...........................................................................110
Section 4.11 Allocation of Realized Losses on the REMIC I Regular Interests.......................110
Section 4.12 Termination of the Mortgage Insurance Policy.........................................111
Section 4.13 The Class P Certificates.............................................................111
ARTICLE V
THE CERTIFICATES................................................................................................112
Section 5.01 The Certificates.....................................................................112
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates
....................................................................................113
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates....................................117
Section 5.04 Persons Deemed Owners................................................................117
Section 5.05 Access to List of Certificateholders' Names and Addresses............................117
Section 5.06 Book-Entry Certificates..............................................................118
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Section 5.07 Notices to Depository................................................................119
Section 5.08 Definitive Certificates..............................................................119
Section 5.09 Maintenance of Office or Agency......................................................119
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER...............................................................120
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Seller
....................................................................................120
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Seller
....................................................................................120
Section 6.03 Limitation on Liability of the Depositor, the Seller, the Master Servicer and
Others...............................................................................120
Section 6.04 Limitation on Resignation of Master Servicer.........................................121
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.......................................121
ARTICLE VII
DEFAULT; TERMINATION OF MASTER SERVICER.........................................................................122
Section 7.01 Events of Default....................................................................122
Section 7.02 Trustee to Act; Appointment of Successor.............................................123
Section 7.03 Notification to Certificateholders...................................................125
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE.......................................................................126
Section 8.01 Duties of Trustee....................................................................126
Section 8.02 Certain Matters Affecting the Trustee................................................127
Section 8.03 Trustee Not Liable for Mortgage Loans................................................128
Section 8.04 Trustee May Own Certificates.........................................................128
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses...................................129
Section 8.06 Eligibility Requirements for Trustee.................................................129
Section 8.07 Resignation and Removal of Trustee...................................................130
Section 8.08 Successor Trustee....................................................................130
Section 8.09 Merger or Consolidation of Trustee...................................................131
Section 8.10 Appointment of Co-Trustee or Separate Trustee........................................131
Section 8.11 Tax Matters..........................................................................132
Section 8.12 Co-Trustee...........................................................................135
ARTICLE IX
TERMINATION.....................................................................................................138
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans.....................138
iii
Section 9.02 Final Distribution on the Certificates...............................................139
Section 9.03 Additional Termination Requirements..................................................140
ARTICLE X
MISCELLANEOUS PROVISIONS........................................................................................142
Section 10.01 Amendment............................................................................142
Section 10.02 Recordation of Agreement; Counterparts...............................................143
Section 10.03 Governing Law........................................................................144
Section 10.04 Intention of Parties.................................................................144
Section 10.05 Notices..............................................................................144
Section 10.06 Severability of Provisions...........................................................146
Section 10.07 Assignment...........................................................................146
Section 10.08 Limitation on Rights of Certificateholders...........................................146
Section 10.09 Inspection and Audit Rights..........................................................147
Section 10.10 Certificates Nonassessable and Fully Paid............................................147
EXHIBITS
EXHIBIT A-1 Form of Class 1-A Certificate
EXHIBIT A-2 Form of Class 2-A-1 Certificate
EXHIBIT A-3 Form of Class 2-A-2 Certificate
EXHIBIT A-4 Form of Class M-1 Certificate
EXHIBIT A-5 Form of Class M-2 Certificate
EXHIBIT A-6 Form of Class M-3 Certificate
EXHIBIT A-7 Form of Class M-4 Certificate
EXHIBIT A-8 Form of Class M-5 Certificate
EXHIBIT A-9 Form of Class M-6 Certificate
EXHIBIT A-10 Form of Class B Certificate
EXHIBIT B Form of Class C Certificate
EXHIBIT C Form of Class P Certificate
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedules
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the
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]
iv
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 Agreements
EXHIBIT T Officer's Certificate with Respect to Prepayments
v
POOLING AND SERVICING AGREEMENT, dated as of August 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
thirteen classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein).
REMIC I
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Cap Contracts and the Carryover Reserve Fund)
subject to this Agreement as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC I." The Class R-I Interest will represent the sole
class of "residual interests" in REMIC I for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC I Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC I (the "REMIC I Regular Interests").
The "latest possible maturity date" (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I
Regular Interest shall be the 360th Distribution Date. None of the REMIC I
Regular Interests will be certificated.
Uncertificated REMIC I Uncertificated Principal Latest Possible
Designation Pass-Through Rate Balance Maturity Date
----------- ----------------- ------- -------------
LT-AA Variable (1) $ 392,000,000.16 September 2033
LT-1A Variable (1) $ 870,015.00 September 2033
LT-2A1 Variable (1) $ 1,031,250.00 September 2033
LT-2A2 Variable (1) $ 1,578,735.00 September 2033
LT-M1 Variable (1) $ 220,000.00 September 2033
LT-M2 Variable (1) $ 60,000.00 September 2033
LT-M3 Variable (1) $ 60,000.00 September 2033
LT-M4 Variable (1) $ 60,000.00 September 2033
LT-M5 Variable (1) $ 50,000.00 September 2033
LT-M6 Variable (1) $ 40,000.00 September 2033
1
LT-B Variable (1) $ 30,000.00 September 2033
LT-ZZ Variable (1) $ 4,000,000.00 September 0000
XX-X Variable (1) $ 100.00 September 2033
LT-R Variable (1) $ 100.00 September 2033
LT-1SUB Variable (1) $ 2,599.89 September 2033
LT-1GRP Variable (1) $ 20,000.19 September 2033
LT-2SUB Variable (1) $ 7,800.06 September 2033
LT-2GRP Variable (1) $ 59,999.76 September 2033
LT-XX Variable (1) $ 399,909,600.25 September 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 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 II. The
"latest possible maturity date" (determined solely for purposes of satisfying
Treasury Regulation Section 1.860G-1(a)(4)(iii)) for each Class of REMIC II
Regular Certificates shall be the 360th Distribution Date.
Aggregate Initial Certificate Final Scheduled
Designation Pass-Through Rate Principal Balance Distribution Date
----------- ----------------- ----------------- -----------------
Class 1-A (1) $174,003,000 September 2033
Class 2-A-1 (1) $206,250,000 April 2021
Class 2-A-2 (1) $315,747,000 September 2033
Class M-1 (1) $ 44,000,000 July 2033
Class M-2 (1) $ 12,000,000 June 2033
Class M-3 (1) $ 12,000,000 May 2033
Class M-4 (1) $ 12,000,000 March 2033
Class M-5 (1) $ 10,000,000 January 2033
Class M-6 (1) $ 8,000,000 September 2032
Class B (1) $ 6,000,000 January 2032
Class C (2) September 2033
2
Class P (3) $ 100 September 2033
_______________
(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 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-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 the current Distribution Date. With respect to any
Distribution Date and the Class C Certificates, the calendar month preceding the
month in which such Distribution Date occurs. All calculations of interest on
the Certificates (other than the Class C Certificates) will be made on the basis
of the actual number of days elapsed in the related Accrual Period and on a
360-day year. All calculations of interest on the Class C Certificates will be
made on the basis of a 360-day year consisting of twelve 30-day months. The
Class A-R Certificates and Class P Certificates will not accrue any interest and
therefore have no Accrual Period.
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 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
3
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 by the Master Servicer 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.
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
4
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 CONTRACTS: The Class 1-A Cap Contract, Class 2-A Cap Contract and
Subordinated Cap Contract.
CAP CONTRACT ASSIGNMENT AGREEMENT: The Class 1-A Cap Contract
Assignment Agreement, Class 2-A Cap Contract Assignment Agreement and
Subordinated Cap Contract Assignment Agreement, as applicable.
CAP CONTRACT COUNTERPARTY: Bear Xxxxxxx Financial Products Inc., and
any permitted successors and assigns pursuant to the Cap Contracts.
CAP CONTRACT PAYMENT AMOUNT: The Class 1-A Cap Contract Payment Amount,
Class 2-A Cap Contract Payment Amount and Subordinated Cap Contract Payment
Amount, as applicable.
CAP CONTRACT TERMINATION DATE: The Class 1-A Cap Contract Termination
Date, Class 2-A Cap Contract Termination Date and Subordinated Cap Contract
Termination Date, as applicable.
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-BC4". 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-6, Exhibit B, Exhibit C and Exhibit D.
CERTIFICATE ACCOUNT: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans, Inc. in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC4". Funds in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
5
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 GROUP: Any of the Group 1 Certificates or Group 2
Certificates.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the person
that is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than the
Class C Certificates) and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate less 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. References herein to
the Certificate Principal Balance of a Class of Certificates shall mean the
Certificate Principal Balances of all Certificates in such Class.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02
hereof.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof (other
than the second sentence of Section 10.01 hereof) that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
CLASS: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
CLASS 1-A CAP CONTRACT: The transaction evidenced by the Confirmation
And Agreement for the benefit of the Class 1-A Certificateholders (as assigned
to the Trustee pursuant to the Class 1-A Cap Contract Assignment Agreement), a
form of which is attached hereto as Exhibit R.
6
CLASS 1-A CAP CONTRACT ASSIGNMENT AGREEMENT: The Assignment Agreement
regarding the Class 1-A 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.
CLASS 1-A CAP CONTRACT PAYMENT AMOUNT: The amount, if any, received by
the Trustee for the benefit of the Trust Fund in respect of the Class 1-A Cap
Contract.
CLASS 1-A CAP CONTRACT TERMINATION DATE: The Distribution Date in
December 2009.
CLASS 1-A CERTIFICATE: Any Certificate designated as a "Class 1-A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
CLASS 1-A CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 1-A Certificates.
CLASS 1-A CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated August 28, 2003, reference number FXNCC5326, evidencing the Class 1-A Cap
Contract.
CLASS 1-A CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 1-A Pass-Through Rate on
the Class 1-A 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 1-A INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class 1-A Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class 1-A Certificates
with respect to interest on such prior Distribution Dates.
CLASS 1-A INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class 1-A Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class 1-A
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 1-A
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class 1-A Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class 1-A Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class 1-A Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS 1-A MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.270% per annum and, for any Distribution Date after the
Optional Termination Date, 0.540% per annum.
CLASS 1-A PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 1-A Margin and (ii) the Net Rate Cap for such
Distribution Date.
7
CLASS 1-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
product of (a) a fraction, the numerator of which is the Principal Remittance
Amount for such Distribution Date attributable to the Mortgage Loans in Loan
Group 1 and the denominator of which is the Principal Remittance Amount for such
Distribution Date attributable to all Mortgage Loans and (b) the excess of (i)
the sum of the Certificate Principal Balances of the Class 1-A, Class 2-A-1 and
Class 2-A-2 Certificates immediately prior to such Distribution Date, over (ii)
the lesser of (x) 71.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date and (y) the aggregate Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date minus the OC Floor.
CLASS 2-A CAP CONTRACT: The transaction evidenced by the Confirmation
And Agreement for the benefit of the Class 2-A-1 Certificateholders and Class
2-A-2 Certificateholders (as assigned to the Trustee pursuant to the Class 2-A
Cap Contract Assignment Agreement), a form of which is attached hereto as
Exhibit R.
CLASS 2-A CAP CONTRACT ASSIGNMENT AGREEMENT: The Assignment Agreement
regarding the Class 2-A 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.
CLASS 2-A CAP CONTRACT PAYMENT AMOUNT: The amount, if any, received by
the Trustee for the benefit of the Trust Fund in respect of the Class 2-A Cap
Contract.
CLASS 2-A CAP CONTRACT TERMINATION DATE: The Distribution Date in
December 2009.
CLASS 2-A CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated August 28, 2003, reference number FXNCC5327, evidencing the Class 2-A Cap
Contract.
CLASS 2-A-1 CERTIFICATE: Any Certificate designated as a "Class 2-A-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
CLASS 2-A-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-1
Certificates.
CLASS 2-A-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-1 Pass-Through Rate
on the Class 2-A-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
CLASS 0-X-0 XXXXXXXX XXXXX XXXXXXX XXXXXX: For any Distribution Date,
the excess of (a) the Class 2-A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-1
Certificates with respect to interest on such prior Distribution Dates.
8
CLASS 2-A-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date on
which the Pass-Through Rate for the Class 2-A-1 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
2-A-1 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
2-A-1 Margin for such Distribution Date, over (ii) the amount of interest
accrued on the Class 2-A-1 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class 2-A-1 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class 2-A-1 Pass-Through Rate (without
giving effect to the Net Rate Cap).
CLASS 2-A-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.120% per annum and, for any Distribution Date after
the Optional Termination Date, 0.240% per annum.
CLASS 2-A-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-1 Margin and (ii) the Net Rate Cap for
such Distribution Date.
CLASS 2-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
product of (a) a fraction, the numerator of which is the Principal Remittance
Amount for such Distribution Date attributable to the Mortgage Loans in Loan
Group 2 and the denominator of which is the Principal Remittance Amount for such
Distribution Date attributable to all Mortgage Loans and (b) the excess of (i)
the sum of the Certificate Principal Balances of the Class 1-A, Class 2-A-1 and
Class 2-A-2 Certificates immediately prior to such Distribution Date, over (ii)
the lesser of (x) 71.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date and (y) the aggregate Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date minus the OC Floor.
CLASS 2-A-2 CERTIFICATE: Any Certificate designated as a "Class 2-A-2
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
CLASS 2-A-2 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-2
Certificates.
CLASS 2-A-2 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-2 Pass-Through Rate
on the Class 2-A-2 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
CLASS 0-X-0 XXXXXXXX XXXXX XXXXXXX XXXXXX: For any Distribution Date,
the excess of (a) the Class 2-A-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-2
Certificates with respect to interest on such prior Distribution Dates.
9
CLASS 2-A-2 INTEREST CARRYOVER AMOUNT: For any Distribution Date on
which the Pass-Through Rate for the Class 2-A-2 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
2-A-2 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
2-A-2 Margin for such Distribution Date, over (ii) the amount of interest
accrued on the Class 2-A-2 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class 2-A-2 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class 2-A-2 Pass-Through Rate (without
giving effect to the Net Rate Cap).
CLASS 2-A-2 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.320% per annum and, for any Distribution Date after
the Optional Termination Date, 0.640% per annum.
CLASS 2-A-2 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-2 Margin and (ii) the Net Rate Cap for
such Distribution Date.
CLASS A-R CERTIFICATE: Any one of the Class A-R Certificates executed
by the Trustee substantially in the form annexed hereto as Exhibit D, composed
of the Class R-I Interest and Class R-II Interest, and evidencing an interest
designated as a "residual interest" in REMIC I and REMIC II 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 CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to distributions as set forth herein.
CLASS B CERTIFICATE PRINCIPAL BALANCE: As of any date of determination,
the Certificate Principal Balance of the Class B Certificates.
CLASS B CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class B Pass-Through Rate on
the Class B Certificate Principal Balance immediately prior to such Distribution
Date, 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 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class B Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class B Certificates with
respect to interest on such prior Distribution Dates.
10
CLASS B INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class B Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class B
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class B
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class B Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class B Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class B Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS B MARGIN: For 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 PASS-THROUGH RATE: For any Distribution Date, the lesser of (i)
One-Month LIBOR plus the Class B Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS B PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the excess of (i) the sum of (A) the Certificate Principal Balances of the
Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates (after taking into account
distribution of the Class 1-A and Class 2-A Principal Distribution Amounts on
such Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distribution of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance (after taking into account distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (E) the Class M-4 Certificate
Principal Balance (after taking into account distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class M-5
Certificate Principal Balance (after taking into account distribution of the
Class M-5 Principal Distribution Amount on such Distribution Date), (G) the
Class M-6 Certificate Principal Balance (after taking into account distribution
of the Class M-6 Principal Distribution Amount on such Distribution Date) and
(H) the Class B Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 97.70% of the aggregate Stated
Principal Balances of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Class 1-A Certificate
Principal Balance, the Class 2-A-1 Certificate Principal Balance, the Class
2-A-2 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate Principal Balance, the Class M-5
Certificate Principal Balance and the Class M-6 Certificate Principal Balance
have been reduced to zero, the Class B Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
11
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 I Regular
Interest LT-P and REMIC I Regular Interest LT-R.
CLASS C PASS-THROUGH RATE: A rate per annum equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A) through (L) below, and the denominator of
which is the Uncertificated Principal Balance of the REMIC I Regular Interests
(other than REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R).
For purposes of calculating the Pass Through Rate for the Class C Certificates,
the numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-AA;
(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-1A;
(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-2A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-2A1;
(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-2A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-2A2;
(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M1;
(F) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M2;
12
(G) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M3;
(H) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M4;
(I) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M5;
(J) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M6;
(K) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-B; and
(L) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-ZZ.
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-4 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
13
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-1 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-1 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-1 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS M-1 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.700% per annum and, for any Distribution Date after the
Optional Termination Date, 1.050% per annum.
CLASS M-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-1 Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of (A) the Certificate Principal
Balances of the Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates (after
taking into account distribution of the Class 1-A and Class 2-A Principal
Distribution Amounts on such Distribution Date) and (B) the Class M-1
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (x) 82.70% of the Stated Principal Balances of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date minus the OC Floor; provided, however, that
after the Class 1-A Certificate Principal Balance, the Class 2-A-1 Certificate
Principal Balance, the Class 2-A-2 Certificate Principal Balance, the Class M-2
Certificate Principal Balance, the Class M-3 Certificate Principal Balance, the
Class M-4 Certificate Principal Balance, the Class M-5 Certificate Principal
Balance, the Class M-6 Certificate Principal Balance and the Class B 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-5 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.
14
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, over (ii) the amount of interest accrued on
the Class M-2 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-2 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-2 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS M-2 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.900% per annum and, for any Distribution Date after the
Optional Termination Date, 1.350% per annum.
CLASS M-2 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-2 Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balances of the Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates (after
taking into account distribution of the Class 1-A and Class 2-A Principal
Distribution Amounts on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date) and (C) the Class M-2
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (x) 85.70% of the aggregate Stated Principal Balances of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date minus the OC Floor; provided,
however, that after the Class 1-A Certificate Principal Balance, Class 2-A-1
Certificate Principal Balance, Class 2-A-2 Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-3 Certificate Principal
Balance, the Class M-4 Certificate Principal Balance, the Class M-5 Certificate
Principal Balance, the Class M-6 Certificate Principal Balance and the Class B
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 M-3 CERTIFICATE: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
15
CLASS M-3 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-3 Certificates.
CLASS M-3 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date, 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-3 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-3 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-3 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-3 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-3 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-3
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-3
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-3 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-3 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-3 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS M-3 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.450% per annum and, for any Distribution Date after the
Optional Termination Date, 2.175% per annum.
CLASS M-3 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-3 Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balances of the Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates (after
taking into account distribution of the Class 1-A and Class 2-A Principal
Distribution Amounts 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 M-3 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the lesser of (x) 88.70% of the aggregate Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Class 1-A Certificate Principal Balance, Class
2-A-1 Certificate Principal Balance, Class 2-A-2 Certificate Principal Balance,
the Class M-1 Certificate Principal Balance, the Class
16
M-2 Certificate Principal Balance, the Class M-4 Certificate Principal Balance,
the Class M-5 Certificate Principal Balance, the Class M-6 Certificate Principal
Balance and the Class B Certificate Principal Balance have been reduced to zero,
the Class M-3 Principal Distribution Amount for such Distribution Date will
equal 100% of the Principal Distribution Amount for such Distribution Date.
CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
CLASS M-4 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-4 Certificates.
CLASS M-4 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance immediately prior to such
Distribution Date, 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-4 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-4 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-4 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-4 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-4 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-4
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-4
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-4 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-4 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-4 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS M-4 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.750% per annum and, for any Distribution Date after the
Optional Termination Date, 2.625% per annum.
CLASS M-4 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-4 Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balances of the Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates (after
taking into account distribution of the Class 1-A and Class 2-A Principal
Distribution Amounts 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
17
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class M-3 Certificate Principal Balance (after taking into
account distribution of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (E) the Class M-4 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 91.70%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class 1-A Certificate Principal Balance, Class 2-A-1 Certificate Principal
Balance, Class 2-A-2 Certificate Principal Balance, the Class M-1 Certificate
Principal Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate Principal Balance, the Class M-5 Certificate Principal Balance, the
Class M-6 Certificate Principal Balance and the Class B Certificate Principal
Balance have been reduced to zero, the Class M-4 Principal Distribution Amount
for such Distribution Date will equal 100% of the Principal Distribution Amount
for such Distribution Date.
CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
CLASS M-5 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-5 Certificates.
CLASS M-5 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance immediately prior to such
Distribution Date, 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-5 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-5 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-5 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-5 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-5 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-5
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-5
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-5 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-5 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-5 Pass-Through Rate (without giving effect to the Net Rate Cap).
CLASS M-5 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 2.300% per annum and, for any Distribution Date after the
Optional Termination Date, 3.450% per annum.
18
CLASS M-5 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-5 Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balances of the Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates (after
taking into account distribution of the Class 1-A and Class 2-A Principal
Distribution Amounts on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distribution
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date) and (F) the Class M-5 Certificate Principal Balance immediately prior to
such Distribution Date over (ii) the lesser of (x) 94.20% of the aggregate
Stated Principal Balances of the Mortgage Loans for such Distribution Date after
giving effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Class 1-A Certificate
Principal Balance, Class 2-A-1 Certificate Principal Balance, Class 2-A-2
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance, the Class M-3 Certificate Principal
Balance, the Class M-4 Certificate Principal Balance, the Class M-6 Certificate
Principal Balance and the Class B Certificate Principal Balance have been
reduced to zero, the Class M-5 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.
CLASS M-6 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-6 Certificates.
CLASS M-6 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance immediately prior to such
Distribution Date, 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-6 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-6 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-6 Certificates
with respect to interest on such prior Distribution Dates.
CLASS M-6 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-6 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i)
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the amount of interest the Class M-6 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-6 Margin for such Distribution Date, over (ii)
the amount of interest accrued on the Class M-6 Certificates at the Net Rate Cap
for such Distribution Date and (B) the Class M-6 Interest Carryover Amount for
all previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class M-6 Pass-Through Rate (without
giving effect to the Net Rate Cap).
CLASS M-6 MARGIN: For 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 M-6 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-6 Margin and (ii) the Net Rate Cap for such
Distribution Date.
CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balances of the Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates (after
taking into account distribution of the Class 1-A and Class 2-A Principal
Distribution Amounts on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distribution
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (F) the Class M-5 Certificate Principal Balance (after taking into
account distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date) and (G) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 96.20%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class 1-A Certificate Principal Balance, Class 2-A-1 Certificate Principal
Balance, Class 2-A-2 Certificate Principal Balance, the Class M-1 Certificate
Principal Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate Principal Balance, the Class M-4 Certificate Principal Balance, the
Class M-5 Certificate Principal Balance and the Class B Certificate Principal
Balance have been reduced to zero, the Class M-6 Principal Distribution Amount
for such Distribution Date will equal 100% of the Principal Distribution Amount
for such Distribution Date.
CLASS 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.
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CLASS P CERTIFICATE PRINCIPAL BALANCE: As of any date of determination,
the Certificate Principal Balance of the Class P Certificates.
CLASS P DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Class P Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC4".
CLASS P PRINCIPAL DISTRIBUTION DATE: The first Distribution Date that
occurs after the end of the latest Prepayment Charge Period for all Mortgage
Loans that have a Prepayment Charge Period.
CLASS R-I INTEREST: The uncertificated Residual Interest in REMIC I.
CLASS R-II INTEREST: The uncertificated Residual Interest in REMIC II.
CLOSING DATE: August 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.
CONFIRMATION AND AGREEMENTS: The Class 1-A Confirmation and Agreement,
Class 2-A Confirmation And Agreement and Subordinated Confirmation And
Agreement.
CORPORATE TRUST OFFICE: The designated office of the Trustee in the
State of New York where at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (Attention: Corporate Trust MBS Administration), telephone: (212)
000-0000, facsimile: (000) 000-0000.
CORRESPONDING CERTIFICATE: With respect to each REMIC I Regular
Interest set forth below, the Regular Certificate set forth in the table below:
REMIC I REGULAR INTEREST REMIC II CERTIFICATE
LT-1A Class 1-A Certificate
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LT-2A1 Class 2-A-1 Certificate
LT-2A2 Class 2-A-2 Certificate
LT-M1 Class M-1 Certificate
LT-M2 Class M-2 Certificate
LT-M3 Class M-3 Certificate
LT-M4 Class M-4 Certificate
LT-M5 Class M-5 Certificate
LT-M6 Class M-6 Certificate
LT-B Class B Certificate
LT-P Class P Certificate
LT-R Class A-R Certificate
CURRENT INTEREST: With respect to (i) the Class 1-A Certificates, the
Class 1-A Current Interest, (ii) the Class 2-A-1 Certificates, the Class 2-A-1
Current Interest, (iii) the Class 2-A-2 Certificates, the Class 2-A-2 Current
Interest, (iv) the Class M-1 Certificates, the Class M-1 Current Interest, (v)
the Class M-2 Certificates, the Class M-2 Current Interest, (vi) the Class M-3
Certificates, the Class M-3 Current Interest, (vii) the Class M-4 Certificates,
the Class M-4 Current Interest, (viii) the Class M-5 Certificates, the Class M-5
Current Interest, (ix) the Class M-6 Certificates, the Class M-6 Current
Interest, (x) the Class B Certificates, the Class B Current Interest and (xi)
the Class C Certificates, the Class C Current Interest.
CUMULATIVE LOSS TRIGGER EVENT: With respect to a Distribution Date on
or after the Stepdown Date exists if the aggregate amount of Trigger Event
Realized Losses on the Mortgage Loans from (and including) the Cut-off Date for
each Mortgage Loan to (and including) the last day of the related Due Period
exceeds the applicable percentage, for such Distribution Date, of the Cut-off
Date Principal Balance of the Mortgage Loans, as set forth below:
Distribution Date Percentage
September 2006 - August 2007................................... 2.00%
September 2007 - August 2008................................... 3.25%
September 2008 - August 2009................................... 4.25%
September 2009 and thereafter.................................. 5.00%
CUT-OFF DATE: In the case of any Mortgage Loan, the later of (x) August
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
22
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.
DELINQUENCY TRIGGER EVENT: With respect to any Distribution Date on or
after the Stepdown Date exists if the product of (i) 1.75 and (ii) the Rolling
Delinquency Percentage equals or exceeds the 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
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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.
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-BC4". 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 September 2003.
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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.
ERISA-RESTRICTED CERTIFICATES: The Class A-R, Class C and Class P
Certificates.
EVENT OF DEFAULT: As defined in Section 7.01 hereof.
EXCESS CASHFLOW: With respect to any Distribution Date the sum of (i)
the amount remaining after the distribution of interest to Certificateholders
for such Distribution Date pursuant to Section 4.04(a)(ix), and (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date pursuant to Section 4.04(d)(i)(I) or 4.04(d)(ii)(I).
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
25
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 and Loan Group, the lesser of (1) the Overcollateralization Deficiency
Amount for such Distribution Date multiplied by a fraction, the numerator of
which is the Principal Remittance Amount for such Loan Group and the denominator
of which is the Principal Remittance Amount for both Loan Groups, and (2) the
Loan Group Excess Cashflow Allocation Amount for such Distribution Date
available for payment thereof pursuant to Section 4.04(e)(i).
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.
FITCH RATINGS: Fitch, Inc. or any successor thereto.
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.
GROSS MARGIN: The percentage set forth in the related Mortgage Note for
the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth in
the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.
GROUP 1 CERTIFICATES: The Class A-R Certificates and the Class 1-A
Certificates.
GROUP 1 MORTGAGE LOANS: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in each
case any Mortgage Loans delivered in replacement thereof.
26
GROUP 1 NET WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 1.
GROUP 2 CERTIFICATES: The Class 2-A-1 Certificates and Class 2-A-2
Certificates.
GROUP 2 MORTGAGE LOANS: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including any
Mortgage Loans delivered in replacement thereof.
GROUP 2 NET WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 2.
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,
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.
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INTEREST CARRY FORWARD AMOUNT: With respect to (i) the Class 1-A
Certificates, the Class 1-A Interest Carry Forward Amount, (ii) the Class 2-A-1
Certificates, the Class 2-A-1 Interest Carry Forward Amount, (iii) the Class
2-A-2 Certificates, the Class 2-A-2 Interest Carry Forward Amount, (iv) the
Class M-1 Certificates, the Class M-1 Interest Carry Forward Amount, (v) the
Class M-2 Certificates, the Class M-2 Interest Carry Forward Amount, (vi) the
Class M-3 Certificates, the Class M-3 Interest Carry Forward Amount, (vii) the
Class M-4 Certificates, the Class M-4 Interest Carry Forward Amount, (viii) the
Class M-5 Certificates, the Class M-5 Interest Carry Forward Amount, (ix) the
Class M-6 Certificates, the Class M-6 Interest Carry Forward Amount and (x) the
Class B Certificates, the Class B Interest Carry Forward Amount.
INTEREST DETERMINATION DATE: With respect to the Certificates (other
than the Class A-R, Class C and Class P Certificates) for the first Accrual
Period, August 26, 2003. With respect to the Certificates (other than the 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 in each
Loan Group and any Master Servicer Advance Date, the sum, without duplication,
of (i) all scheduled interest collected during the related Due Period with
respect to the Mortgage Loans less the related Servicing Fee, (ii) 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 September 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 September 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.
28
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 GROUP: Any of Loan Group 1 or Loan Group 2.
LOAN GROUP CHARACTERISTICS: The characteristics for each Loan Group
identified under the caption "The Mortgage Pool" in the Prospectus Supplement.
LOAN GROUP 1: The Group 1 Mortgage Loans.
LOAN GROUP 2: The Group 2 Mortgage Loans.
LOAN GROUP EXCESS CASHFLOW ALLOCATION AMOUNT: With respect to any
Distribution Date and Loan Group, the product of (i) the Excess Cashflow for
such Distribution Date multiplied by (ii) a fraction, the numerator of which is
the Principal Remittance Amount for such Loan Group for such Distribution Date
and the denominator of which is the sum of the Principal Remittance Amount for
both Loan Groups.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
MARKER RATE: With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted
average of the Pass Through Rates for each REMIC I Regular Interest (other than
REMIC I Regular Interest LT-AA, REMIC I Regular Interest LT-P and REMIC I
Regular Interest LT-R), with the rates on each such REMIC I Regular Interest
subject to a cap equal to the Pass Through Rate for the Corresponding Class for
such REMIC I Regular Interest, and the rate on REMIC I Regular Interest LT-ZZ
subject to a cap of zero for purposes of this calculation.
MASTER SERVICER: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as master servicer
hereunder.
MASTER SERVICER ADVANCE DATE: As to any Distribution Date, the Business
Day immediately preceding such Distribution Date.
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.
29
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan registered with MERS on the
MERS(R)System.
MERS(R) SYSTEM: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
MOM LOAN: Any Mortgage Loan, as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 4.05.
MOODY'S: Xxxxx'x Investors Service, Inc. or any successor thereto.
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 the
Mortgage Insurer with respect to certain mortgage loans identified in the
Mortgage Loan Schedule.
MORTGAGE INSURER: Mortgage Guarantee Insurance Corporation.
COVERED MORTGAGE LOAN: A mortgage loan listed on the Mortgage Loan
Schedule as being covered by the Mortgage Insurance Policy.
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.
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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: Such of the Group 1 Mortgage Loans and Group 2 Mortgage
Loans transferred and assigned to the Trustee pursuant to the provisions hereof
as from time to time are held as a part of the Trust Fund (including any REO
Property), the mortgage loans so held being identified in the Mortgage Loan
Schedule, notwithstanding foreclosure or other acquisition of title of the
related Mortgaged Property. Any Mortgage Loan subject to repurchase by the
Seller or 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.
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 Loan Group;
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is either (a)
a detached single family dwelling (b) a condominium unit or (c) a two to four
unit residential property;
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(xiii) a code indicating whether the Mortgage Loan is a Simple Interest
Mortgage Loan; and
(xiv) a code indicating whether the Mortgage Loan is a Covered Mortgage
Loan and the rate for the Mortgage Insurance Premium, if applicable;
(xv) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan.
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: (i) With respect to the Class 1-A Certificates, the Group
1 Net WAC, (ii) with respect to the Class 2-A-1 Certificates and Class 2-A-2
Certificates, the Group 2 Net WAC, and (iii) with respect to the Class X-0,
Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Certificates,
the weighted average of the Group 1 Net WAC and Group 2 Net WAC (weighted (x) in
the case of the Group 1 Net WAC on the positive difference (if any) of the
Stated Principal
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Balance of the Mortgage Loans in Loan Group 1 over the outstanding Certificate
Principal Balance of the Class 1-A Certificates and (y) in the case of the Group
2 Net WAC on the positive difference (if any) of the Stated Principal Balance of
the Mortgage Loans in Loan Group 2 over the aggregate outstanding Certificate
Principal Balance the Class 2-A-1 Certificates and Class 2-A-2 Certificates), in
the case of each of (i), (ii) and (iii) above, adjusted to an effective rate
reflecting the calculation of interest on the basis of the actual number of days
elapsed during the related interest accrual period and a 360-day year. For
federal income tax purposes, the equivalent of clause (i) above shall be
expressed as the weighted average of the Uncertificated REMIC I Pass-Through
Rate on REMIC I Regular Interest LT-1GRP, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest. For federal
income tax purposes, the equivalent of clause (ii) above shall be expressed as
the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I
Regular Interest LT-2GRP, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interest. For federal income tax purposes, the
equivalent of clause (iii) above shall be expressed as the weighted average of
the Uncertificated REMIC I Pass-Through Rates on (a) REMIC I Regular Interest
LT-1SUB, subject to a cap and a floor equal to the Group 1 Net WAC Rate and (b)
REMIC I Regular Interest LT-2SUB, subject to a cap and a floor equal to the
Group 2 Net WAC Rate; in each case weighted on the basis of the Uncertificated
Principal Balance of such REMIC I Regular Interests.
NET RATE CARRYOVER: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class 1-A Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class 2-A-1 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class 2-A-2 Interest Carryover Amount
for such Distribution Date (if any), (iv) the Class M-1 Interest Carryover
Amount for such Distribution Date (if any), (v) the Class M-2 Interest Carryover
Amount for such Distribution Date (if any), (vi) the Class M-3 Interest
Carryover Amount for such Distribution Date (if any), (vii) the Class M-4
Interest Carryover Amount for such Distribution Date (if any), (viii) the Class
M-5 Interest Carryover Amount for such Distribution Date (if any), (ix) the
Class M-6 Interest Carryover Amount for such Distribution Date (if any) and (x)
the Class B Interest Carryover Amount for such Distribution Date (if any);
provided that when the term Net Rate Carryover is used with respect to one Class
of Certificates (other than the Class A-R, Class C and Class P Certificates), it
shall mean such carryover amount listed in clauses (i), (ii), (iii) (iv), (v),
(vi), (vii), (viii), (ix) or (x) as applicable, with the same Class designation.
The Class A-R, Class C and Class P Certificates shall not accrue any Net Rate
Carryover.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.
NONRECOVERABLE ADVANCE: Any portion of an Advance previously made or
proposed to be made by the 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.
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OFFERED CERTIFICATES: The Class 1-A, Class 2-A-1, Class 2-A-2, Class
A-R, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class
B 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 1.11% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
OPTIONAL TERMINATION: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to the last
sentence of Section 9.01 hereof.
OPTIONAL TERMINATION DATE: 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.
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ORIGINAL VALUE: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Master Servicer or the sales price of
such property or, in the case of a refinancing, on an appraisal satisfactory to
the Master Servicer.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
OUTSTANDING MORTGAGE LOAN: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Prepayment Period.
OVERCOLLATERALIZED AMOUNT: For any Distribution Date, the amount, if
any, by which (x) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period exceeds (y) the aggregate
Certificate Principal Balance of the Offered Certificates as of such
Distribution Date (after giving effect to distributions in respect of the
Principal Remittance Amount on such Distribution Date).
OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount for such Distribution Date (after
giving effect to distributions in respect of the Principal Remittance Amount for
such Distribution Date).
OVERCOLLATERALIZATION TARGET AMOUNT: (a) On the Closing Date and each
Distribution Date prior to and including the Distribution Date in November 2003,
zero (b) on or after the Distribution Date in December 2003 and each
Distribution Date prior to the Stepdown Date, an amount equal to 1.15% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans, and (c) on and
after the Stepdown Date, an amount equal to 2.30% of the aggregate Stated
Principal Balance of the Mortgage Loans in the Mortgage Pool for the current
Distribution Date, subject to a minimum amount equal to the OC Floor; provided,
however, that, if on any Distribution Date, a Trigger Event is in effect, the
Overcollateralization Target Amount will be the Overcollateralization Target
Amount on the Distribution Date immediately preceding such Distribution Date.
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OWNERSHIP INTEREST: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to the Class 1-A Certificates, the
Class 1-A Pass-Through Rate; with respect to the Class 2-A-1 Certificates, the
Class 2-A-1 Pass-Through Rate; with respect to the Class 2-A-2 Certificates, the
Class 2-A-2 Pass-Through Rate; with respect to the Class 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 M-3 Certificates, the
Class M-3 Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4 Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5 Pass-Through Rate; with respect to the Class M-6 Certificates, the
Class M-6 Pass-Through Rate; with respect to the Class B Certificates, the Class
B Pass-Through Rate and with respect to the Class C Certificates, the Class C
Pass-Through Rate.
PERCENTAGE INTEREST: With respect to any Certificate (other than the
Class P, Class C or Class A-R Certificates), a fraction, expressed as a
percentage, the numerator of which is the Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
Certificate Principal Balance of the related Class. With respect to the Class C,
Class P and Class A-R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate.
PERIODIC RATE CAP: As to substantially all Adjustable Rate Mortgage
Loans and the related Mortgage Notes, the provision therein that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than three percentage points.
PERMITTED INVESTMENTS: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as each Rating Agency has confirmed in writing will not result
in the downgrading or withdrawal of the ratings then assigned to the
Certificates by such Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as each Rating Agency has
confirmed in writing will not result in the downgrading or withdrawal
of the ratings then assigned to the Certificates by such Rating Agency;
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(v) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding company,
but only if Xxxxx'x is not a Rating Agency) are then rated one of the
two highest long-term and the highest short-term ratings of each such
Rating Agency for such securities, or such lower ratings as each Rating
Agency has confirmed in writing will not 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;
37
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be 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.
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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.
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 portion of the Prepayment Period from the related Due Date to the end
of such Prepayment Period, any payment of interest received in connection
therewith (net of any applicable Servicing Fee) representing interest accrued
for any portion of such month of receipt.
39
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during (i) the
Prepayment Period with respect to a Simple Interest Mortgage Loan or (ii) the
portion of the Prepayment Period from the beginning of such Prepayment Period to
the related Due Date in such Prepayment Period (in each case, other than a
Principal Prepayment in full resulting from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof), the amount, if any,
by which (i) one month's interest at the applicable Net Mortgage Rate on the
Stated Principal Balance of such Mortgage Loan immediately prior to such
prepayment (or liquidation) 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 August 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.
PRIME RATE: The prime commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time. The Prime Rate shall be
adjusted automatically, without notice, on the effective date of any change in
such prime commercial lending rate. The Prime Rate is not necessarily the Bank
of New York's lowest rate of interest.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date
and a Loan Group, the sum of (i) the Principal Remittance Amount for such Loan
Group for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Loan Group for such Distribution Date.
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
40
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.
PRIVATE CERTIFICATES: The Class C Certificates and Class P
Certificates.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated August 22, 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, (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, and (iii) costs
and damages incurred by the Trust Fund in connection with a repurchase pursuant
to Section 2.03 hereof that arises out of a violation of any predatory or
abusive lending law which also constitutes an actual breach of representation
(xxxiv) of Section 2.03(b) hereof.
RATING AGENCY: Each of Xxxxx'x and Xxxxx Ratings. If any such
organization or its successor is no longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee. References herein to a given rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
REALIZED LOSS: With respect to each Liquidated Loan, an amount (not
less than zero or more than the Stated Principal Balance of the Mortgage Loan)
as of the date of such liquidation, equal to (i) the Stated Principal Balance of
such Liquidated Loan as of the date of such liquidation, minus (ii) the
Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, and (ii)
if the principal amount due under the related
41
Mortgage Note has been reduced, the difference between the principal balance of
the Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient Valuation
plus any reduction in the interest component of the Scheduled Payments. With
respect to each Mortgage Loan that has become the subject of a Debt Service
Reduction and any Distribution Date, the amount, if any, by which the related
Scheduled Payment was reduced.
RECORD DATE: With respect to any Distribution Date and the
Certificates, other than the Class A-R, Class C and Class P Certificates, the
Business Day immediately preceding such Distribution Date, or if such
Certificates are no longer Book-Entry Certificates, the last Business Day of the
month preceding the month of such Distribution Date. With respect to the Class
A-R, Class C and Class P Certificates, the last Business Day of the month
preceding the month of a Distribution Date.
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 aggregate
Certificate Principal Balance of the Offered Certificates on such Interest
Determination Date, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean (rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%) of the rates quoted by one or more major banks in New York
City, selected by the Trustee, as of 11:00 a.m., New York City time, on such
date for loans in U.S. dollars to leading European banks for a period of one
month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Offered Certificates on such Interest Determination Date.
REFERENCE BANKS: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.
REFINANCING MORTGAGE LOAN: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
REGULAR CERTIFICATE: Any 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.
42
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 August 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 INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests then
outstanding and (ii) the Uncertificated Pass-Through Rate for REMIC I Regular
Interest LT-AA minus the Marker Rate, divided by (b) 12.
REMIC I MARKER ALLOCATION PERCENTAGE: 50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest LT-AA, REMIC I Regular Xxxxxxxx XX-X0, REMIC I
Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I Regular
Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I Regular Interest LT-M3,
REMIC I Regular Interest LT-M4, REMIC I Regular Interest LT-M5, REMIC I Regular
Interest LT-M6, REMIC I Regular Interest LT-B, REMIC I Regular Interest LT-ZZ,
REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R.
REMIC I OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests minus (ii) the Uncertificated Principal Balances
of Regular Interest LT-A1, REMIC I Regular Interest LT-2A1, REMIC I Regular
Interest LT-2A2, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2,
REMIC I Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular
Interest LT-M5, REMIC I Regular Interest LT-M6 and REMIC I Regular Interest
LT-B, in each case as of such date of determination.
REMIC I OVERCOLLATERALIZATION TARGET AMOUNT:1% of the
Overcollateralization Target Amount.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the sum of the Uncertificated
Principal Balances of REMIC I Regular Xxxxxxxxx XX-X0, XX-0X0, XX-0X0, LT-M1,
LT-M2, LT-M3, LT-M4, LT-M5, LT-M6 and LT-B and the denominator of which is the
sum of the Uncertificated Principal Balances of REMIC I Regular Xxxxxxxxx XX-X0,
XX-0X0, XX-0X0, LT-M1, LT-M2, LT-M3, LT-M4, LT-M5, LT-M6, LT-B and LT-ZZ.
43
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-AA, Regular
Interest LT-A1, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I
Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest
LT-M5, REMIC I Regular Interest LT-M6, REMIC I Regular Interest LT-B, REMIC I
Regular Interest LT-ZZ, REMIC, REMIC I Regular Interest LT-P, REMIC I Regular
Interest LT-R, REMIC I Regular Interest LT-1SUB, REMIC I Regular Interest
LT-1GRP, REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest LT-2GRP and
REMIC I Regular Interest LT-XX.
REMIC I REGULAR INTEREST LT-AA: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-1A: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2A1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2A2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M3: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
44
REMIC I REGULAR INTEREST LT-M4: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M5: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-M6: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-B: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-ZZ: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-P: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-R: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-1SUB: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-1GRP: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal
45
Balance, that bears interest at the related Uncertificated REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I REGULAR INTEREST LT-2SUB: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-2GRP: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-XX: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I REGULAR INTEREST LT-ZZ MAXIMUM INTEREST DEFERRAL AMOUNT: With
respect to any Distribution Date, the sum of (a) the excess of (i)
Uncertificated Accrued Interest calculated with the Uncertificated Pass-Through
Rate for REMIC I Regular Interest LT-ZZ and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC I
Regular Interest LT-ZZ over (y) the REMIC I Overcollateralized Amount, in each
case for such Distribution Date, over (ii) Uncertificated Accrued Interest on
REMIC I Regular Xxxxxxxxx XX-X0, XX-0X0, XX- 0X0, XX-X0, LT-M2, LT-M3, LT-M4,
LT-M5, LT-M6 and LT-B, with the rate on each such REMIC I Regular Interest
subject to a cap equal to the Pass-Through Rate on the Corresponding Certificate
for the purpose of this calculation.
REMIC I SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LT-1SUB, REMIC I Regular Interest LT-1GRP, REMIC I Regular
Interest LT-2SUB, REMIC I Regular Interest LT2-GRP and REMIC I Regular Interest
LT-XX.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the designation
"SUB,", equal to the ratio among, with respect to each such REMIC I Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the Certificate Principal
Balance of the Class A Certificates, Class R Certificates and Class P
Certificates in the related Loan Group.
REMIC II REGULAR CERTIFICATES: Any of the Class 1-A, Class 2-A-1, Class
2-A-2, Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
B, Class C or Class P Certificates.
46
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.
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.
47
REQUIRED PERCENTAGE: With respect to each Distribution Date on or after
the Stepdown Date, the fraction (expressed as a percentage) of (1) the numerator
of which is the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for the preceding Distribution Date over (b) (i) before the
Certificate Principal Balances of the Class 1-A, Class 2-A-1 and Class 2-A-2
Certificates have been reduced to zero, the aggregate Certificate Principal
Balance of the Class 1-A, Class 2-A-1 and Class 2-A-2 Certificates, or (ii)
after the Certificate Principal Balances of the Class 1-A, Class 2-A-1 and Class
2-A-2 Certificates have been reduced to zero, the Certificate Principal Balance
of the most senior Class of Certificates outstanding as of the preceding Master
Servicer Advance Date and (2) the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans for the preceding Distribution Date.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
ROLLING DELINQUENCY PERCENTAGE: With respect to any Distribution Date,
the average, over the past three months, of a fraction (expressed as a
percentage), (a) the numerator of which is the aggregate Stated Principal
Balances for such Distribution Date of all Mortgage Loans 60 or more days
delinquent as of the last day of the preceding month (including Mortgage Loans
in foreclosure and REO Properties) and (b) the denominator of which is the
aggregate Stated Principal Balances of the Mortgage Loans for such Distribution
Date.
S&P: Standard & Poor's 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.
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 September 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
48
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 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
49
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 Class 1-A, Class 2-A-1
and Class 2-A-2 Certificates is reduced to zero and (ii) the later to occur of
(a) the Distribution Date in September 2006 or (b) the first Distribution Date
on which the aggregate Certificate Principal Balance of the Class 1-A, Class
2-A-1 and Class 2-A-2 Certificates (after calculating anticipated distributions
on such Distribution Date) is less than or equal to 71.70% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date.
SUBORDINATED CAP CONTRACT: The transaction evidenced by the
Confirmation And Agreement for the benefit of the Subordinate Certificateholders
(as assigned to the Trustee pursuant to the Subordinated Cap Contract Assignment
Agreement), a form of which is attached hereto as Exhibit R.
SUBORDINATED CAP CONTRACT ASSIGNMENT AGREEMENT: The Assignment
Agreement regarding the Subordinated 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.
SUBORDINATED CAP CONTRACT PAYMENT AMOUNT: The amount, if any, received
by the Trustee for the benefit of the Trust Fund in respect of the Subordinated
Cap Contract.
SUBORDINATED CAP CONTRACT TERMINATION DATE: The Distribution Date in
December 2009.
SUBORDINATED CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated August 28, 2003, reference number FXNCC5328, evidencing the Subordinated
Cap Contract.
SUBORDINATE CERTIFICATES: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6 and Class B Certificates.
SUBSERVICER: As defined in Section 3.02(a).
SUBSERVICING AGREEMENT: As defined in Section 3.02(a).
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(c).
50
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.
TRIGGER EVENT REALIZED LOSS: With respect to any Distribution Date and
any Liquidated Mortgage Loan is the excess of the Stated Principal Balance of
that Mortgage Loan over 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 Mortgage Loan.
TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(ii); (ii) the
Certificate Account, the Distribution Account, the Carryover Reserve Fund and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) the Cap Contracts; (iv) property that secured a Mortgage Loan
and has been acquired by foreclosure, deed in lieu of foreclosure or otherwise;
(v) the mortgagee's rights under any insurance policies with respect to the
Mortgage Loan; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
TRUSTEE: The Bank of New York, a New York banking corporation, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
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TRUSTEE ADVANCE RATE: With respect to any Advance made by the Trustee
pursuant to Section 4.01(b), a per annum rate of interest determined as of the
date of such Advance equal to the Prime Rate in effect on such date plus 5.00%.
TRUSTEE FEE: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date.
TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.009% per annum.
TWO-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
UNCERTIFICATED ACCRUED INTEREST: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated Pass-Through Rate for such Distribution Date, accrued on the
Uncertificated Principal, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the Uncertificated Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months. For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests for any Distribution Date:
(A) The REMIC I Marker Allocation Percentage of the aggregate amount of
any Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to Uncertificated Accrued Interest payable to REMIC I
Regular Interest LT-AA and REMIC I Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%,
respectively, and thereafter among REMIC I Regular Interest LT-AA, REMIC I
Regular Xxxxxxxx XX-X0, REMIC I Regular Interest LT-2A1, REMIC I Regular
Interest LT-2A2, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2,
REMIC I Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular
Interest LT-M5, REMIC I Regular Interest LT-M6, REMIC I Regular Interest LT-B,
REMIC I Regular Interest LT-ZZ, pro rata based on, and to the extent of, one
month's interest at the then applicable respective REMIC I Pass-Through Rate on
the respective Uncertificated Principal Balance of each such REMIC I Regular
Interest; and
(B) The REMIC I Sub WAC Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by payments by
Compensating Interest) incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC I Regular Interest LT-1SUB, REMIC I Regular Interest LT-1GRP,
REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest LT-2GRP and REMIC I
Regular Interest LT-XX, pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC I Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC I
Regular Interest.
UNCERTIFICATED PASS-THROUGH RATE: The Uncertificated REMIC I
Pass-Through Rate.
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UNCERTIFICATED PRINCIPAL BALANCE: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal Balance of each Uncertificated Regular Interest shall
be reduced by all distributions of principal made on such Uncertificated Regular
Interest, as applicable, on such Distribution Date and, if and to the extent
necessary and appropriate, shall be further reduced in such Distribution Date by
Realized Losses. The Uncertificated Principal Balance of each Uncertificated
Regular Interest shall never be less than zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interest LT-AA, REMIC I Regular Xxxxxxxx XX-X0, REMIC I Regular Interest
LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC I Regular Interest LT-M6, REMIC I
Regular Interest LT-B, REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest
LT-P, REMIC I Regular Interest LT-AR, REMIC I Regular Interest LT-1SUB, REMIC I
Regular Interest LT-2SUB and REMIC I Regular Interest LT-XX, the weighted
average of the Adjusted Net Mortgage Rates of the Mortgage Loans. With respect
to REMIC I Regular Interest LT-1GRP, the weighted average of the Adjusted Net
Mortgage Rates of the Group 1 Mortgage Loans and with respect REMIC I Regular
Interest LT-2GRP, the weighted average of the Adjusted Net Mortgage Rates of the
Group 2 Mortgage Loans.
UNCERTIFICATED REGULAR INTERESTS: The REMIC I Regular Interests.
UNDERWRITER'S EXEMPTION: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
UNPAID REALIZED LOSS AMOUNT: For any Class of Subordinate Certificates,
the portion of the aggregate Applied Realized Loss Amount previously allocated
to that Class remaining unpaid from prior Distribution Dates.
VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificates for purposes of the voting provisions
hereunder. Voting Rights allocated to each Class of Certificates shall be
allocated 97% to the Certificates other than the Class A-R, Class C and Class P
Certificates (with the allocation among the Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class C and Class P Certificates. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.
53
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans, including all interest and
principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date. The Seller
confirms that, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred to in
the preceding paragraph, the Depositor sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for benefit of the Certificateholders, without
recourse, all right title and interest in the Mortgage Loans.
The Seller further agrees to assign all of its right, title and
interest in and to the interest rate cap transactions evidenced by the
Confirmation And Agreements , and to cause all of its obligations in respect of
such transactions to be assumed by, the Trustee on behalf of the Trust Fund, on
the terms and conditions set forth in the Cap Contract Assignment Agreements.
(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]
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(g) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered to, and deposited with, the Co-Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit
with, the Co-Trustee within the time periods specified in the definition of
Delay Delivery Mortgage Loans) (except as provided in clause (vi) below) for the
benefit of the Certificateholders, the following documents or instruments with
respect to each such Mortgage Loan so assigned (with respect to each Mortgage
Loan, clause (i) through (vi) below, together, the "Mortgage File" for each such
Mortgage Loan):
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following
form: "Pay to the order of ________________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from
the originator to the Seller, or, if the original Mortgage Note has
been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of each
MERS Mortgage Loan, the original Mortgage, noting the presence of the
MIN of the Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2003-BC4, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the
Pooling and Servicing Agreement dated as of August 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.
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In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code "[IDENTIFY
TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE FIELD NAME FOR TRUSTEE]"
which identifies the Trustee and (b) the code "[IDENTIFY SERIES SPECIFIC CODE
NUMBER]" in the field "Pool Field" which identifies the series of the
Certificates issued in connection with such Mortgage Loans. The Seller further
agrees that it will not, and will not permit the Master Servicer to, and the
Master Servicer agrees that it will not, alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the terms
of this Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv) concurrently with the execution and delivery hereof,
the Seller shall deliver or cause to be delivered to the Co-Trustee a true copy
of such Mortgage and of each such undelivered interim assignment of the Mortgage
each certified by the Seller, the applicable title company, escrow agent or
attorney, or the originator of such Mortgage, as the case may be, to be a true
and complete copy of the original Mortgage or assignment of Mortgage submitted
for recording. For any such Mortgage Loan that is not a MERS Mortgage Loan the
Seller shall promptly deliver or cause to be delivered to the Co-Trustee such
original Mortgage and such assignment or assignments with evidence of recording
indicated thereon upon receipt thereof from the public recording official, or a
copy thereof, certified, if appropriate, by the relevant recording office, but
in no event shall any such delivery be made later than 270 days following the
Closing Date; provided that in the event that by such date the Seller is unable
to deliver or cause to be delivered each such Mortgage and each interim
assignment by reason of the fact that any such documents have not been returned
by the appropriate recording office, or, in the case of each interim assignment,
because the related Mortgage has not been returned by the appropriate recording
office, the Seller shall deliver or cause to be delivered such documents to the
Co-Trustee as promptly as possible upon receipt thereof. If the public recording
office in which a Mortgage or interim 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
56
modification of a Mortgage Loan and (y) any other documents required to be
delivered by the Depositor or the Master Servicer to the Trustee within the time
periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan as
to which the related Mortgaged Property and Mortgage File are located in (a) the
State of California or (b) any other jurisdiction under the laws of which the
recordation of the assignment specified in clause (iii) above is not necessary
to protect the Trustee's and the Certificateholders, interest in the related
Mortgage Loan, as evidenced by an Opinion of Counsel, delivered by the Seller to
the Trustee and a copy to the Rating Agencies, in lieu of recording the
assignment specified in clause (iii) above, the Seller may deliver an unrecorded
assignment in blank, in form otherwise suitable for recording to the Co-Trustee;
provided that if the related Mortgage has not been returned from the applicable
public recording office, such assignment, or any copy thereof, of the Mortgage
may exclude the information to be provided by the recording office. As to any
Mortgage Loan other than a MERS Mortgage Loan, the procedures of the preceding
sentence 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.
57
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date and the Cut-off Date, the Seller shall
deposit or cause to be deposited in the Certificate Account the amount required
to be deposited therein with respect to such payment pursuant to Section 3.05
hereof.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver to the
Co-Trustee the Mortgage File as required pursuant to this Section 2.01 for each
Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery Mortgage
Loan or (B) substitute the Delay Delivery Mortgage Loan for a Replacement
Mortgage Loan, which repurchase or substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, provided that if
the Seller fails to deliver a Mortgage File for any Delay Delivery Mortgage Loan
within the period provided in the prior sentence, the cure period provided for
in Section 2.02 or in Section 2.03 shall not apply to the initial delivery of
the Mortgage File for such Delay Delivery Mortgage Loan, but rather the Seller
shall have five (5) Business Days to cure such failure to deliver; 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
58
the Closing Date to the Depositor, the Master Servicer and the Seller an Interim
Certification substantially in the form annexed hereto as Exhibit G-2 to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), all
documents required to be delivered to the Co-Trustee pursuant to 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;
59
provided that any such substitution pursuant to (A) above or repurchase pursuant
to (B) above shall not be effected prior to the delivery to the Trustee of the
Opinion of Counsel required by Section 2.05 hereof and any substitution pursuant
to (A) above shall not be effected prior to the additional delivery to the
Co-Trustee of a Request for Release substantially in the form of Exhibit N. No
substitution will be made in any calendar month after the Determination Date for
such month. The Purchase Price for any such Mortgage Loan shall be deposited by
the Seller in the Certificate Account and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit N hereto, the
Co-Trustee shall release the related Mortgage File to the Seller and shall
execute and deliver at the Seller's request such instruments of transfer or
assignment as the Seller has prepared, in each case without recourse, as shall
be necessary to vest in the Seller, or a designee, the 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
60
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate action on the part of the Master Servicer the execution,
delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes a legal, valid and binding obligation
of the Master Servicer, enforceable against the Master Servicer in
accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to 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.
61
(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 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 in a Loan Group are measured by the Cut-off Date Principal
Balance of the Mortgage Loans in the related Loan Xxxxx):
(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)
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result in a material breach of any term or provision of the charter or
by-laws of the Seller or (B) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument
to which the Seller is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Seller of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Seller; and
the Seller is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Seller's ability to perform or meet
any of its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional mortgage
loans for Xxxxxx Xxx or 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,
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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,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(xiii) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(xiv) There is no valid offset, claim, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
(xv) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property that are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those that
are insured against by the title insurance policy referred to in item
(xviii) below.
(xvi) As of the Closing Date, to the best of Seller's
knowledge, each Mortgaged Property is free of material damage and is in
good repair.
(xvii) As of the Closing Date neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material
respect (except that a Mortgage Loan may have been modified by a
written instrument that has been recorded or submitted for recordation,
if necessary, to protect the interests of the Certificateholders and
the original or a copy of which has been delivered to the Trustee);
satisfied, cancelled or subordinated such Mortgage in whole or in part;
released the related Mortgaged Property in whole or in part from the
lien of such Mortgage; or executed any instrument of release,
cancellation, modification (except as expressly permitted above) or
satisfaction with respect thereto.
(xviii) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and
effect, and each such policy was issued by a title insurer qualified to
do business in the jurisdiction where the Mortgaged Property is located
and acceptable to Xxxxxx Mae or Xxxxxxx Mac and is in a form acceptable
to Xxxxxx Mae or
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Xxxxxxx Mac, which policy insures the Seller and successor owners of
indebtedness secured by the insured Mortgage, as to the first priority
lien, of the Mortgage subject to the exceptions set forth in paragraph
(iv) above; to the best of the Seller's knowledge, no claims have been
made under such mortgage title insurance policy and no prior holder of
the related Mortgage, including the Seller, has done, by act or
omission, anything that would impair the coverage of such mortgage
title insurance policy.
(xix) No Mortgage Loan was the subject of a Principal
Prepayment in full between the Closing Date and the Cut-off Date.
(xx) To the best of the Seller's knowledge, all of the
improvements that were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(xxi) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
(xxii) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and under applicable
law, except that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. To the best of the
Seller's knowledge, all parties to the Mortgage Note and the Mortgage
had legal capacity to execute the Mortgage Note and the Mortgage and
each Mortgage Note and Mortgage have been duly and properly executed by
such parties.
(xxiii) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making, or
closing or recording the Mortgage Loans were paid.
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(xxiv) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(xxv) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by
the Certificateholders to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Mortgagor.
(xxvi) Each Mortgage Note and each Mortgage is in
substantially one of the forms attached hereto as Exhibit P acceptable
in form to Xxxxxx Mae or Xxxxxxx Mac.
(xxvii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the related Mortgage Note.
(xxviii) The origination, underwriting, servicing and
collection practices used by the Seller with respect to each Mortgage
Loan have been in all respects legal, proper, prudent and customary in
the mortgage lending and servicing business.
(xxix) There is no pledged account or other security other
than real estate securing the Mortgagor's obligations.
(xxx) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(xxxi) Each Mortgage Loan contains a customary "due on sale"
clause.
(xxxii) No more than approximately 3.63% and 3.83% and of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are
secured by two- to four-family dwellings. No more than approximately
4.97% and 4.64% of the Mortgage Loans in Loan Group 1 and Loan Group 2,
respectively, are secured by condominium units. No more than
approximately 0.14% and 0.19% of the Mortgage Loans in Loan Group 1 and
Loan Group 2, respectively, are secured by high rise condominium units.
No less than approximately 78.78% and 79.65% of the Mortgage Loans in
Loan Group 1 and Loan Group 2, respectively, are secured by single
family detached dwellings. No more than approximately 0.62% and 0.74%
of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively,
are secured by manufactured housing. No more than approximately 9.58%
and 9.30% of the Mortgage Loans in Loan Group 1 and Loan Group 2,
respectively, are secured by PUDs.
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(xxxiii) No Mortgage Loan in Loan Group 1 and Loan Group 2 had
a principal balance in excess of $639,112 and $577,399, respectively,
at origination.
(xxxiv) To the extent required under applicable law, each
originator and subsequent mortgagee or servicer of the Mortgage Loan
complied with all licensing requirements and was authorized to transact
and do business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held or serviced the Mortgage
Loan. Any and all requirements of any federal, state or local laws or
regulations, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection,
anti-predatory lending, fair credit reporting, unfair collection
practice, equal credit opportunity, fair housing and disclosure laws
and regulations, applicable to the solicitation, origination,
collection and servicing of such Mortgage Loan have been complied with
in all material respects; and any obligations of the holder of the
Mortgage Note, Mortgage and other loan documents have been complied
with in all material respects; servicing of each Mortgage Loan has been
in accordance with prudent mortgage servicing standards, any applicable
laws, rules and regulations and in accordance with the terms of the
Mortgage Notes, Mortgage and other loan documents, whether such
origination and servicing was done by Seller, its affiliates, or any
third party which originated the Mortgage Loan on behalf of, or sold
the Mortgage Loan to, any of them, or any servicing agent of any of the
foregoing;
(xxxv) Each Mortgage Loan was originated on or after December
26, 2001;
(xxxvi) Each Two-Year Hybrid Mortgage Loan had an initial
Adjustment Date no later than July 1, 2005; each Three-Year Hybrid
Mortgage Loan had an initial Adjustment Date no later than June 1,
2006; each Five-Year Hybrid Mortgage Loan had an initial Adjustment
Date no later than May 1, 2008.
(xxxvii) Approximately 80.41% and 82.15% of the Mortgage Loans
in Loan Group 1 and Loan Group 2, respectively, provide for a
prepayment penalty.
(xxxviii) On the basis of representations made by the
Mortgagors in their loan applications, no less than approximately
99.94% and 99.71% of the owner-occupied Mortgage Loans in Loan Group 1
and Loan Group 2, respectively, are secured by owner-occupied Mortgaged
Properties that are primary residences and no more than approximately
0.06% and 0.29% of the owner-occupied Mortgage Loans in Loan Group 1
and Loan Group 2, respectively, are secured by owner-occupied Mortgaged
Properties that are secondary residences.
(xxxix) At the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a generally acceptable carrier that provides for fire and
extended coverage and coverage for such other hazards as are customary
in the area where the Mortgaged Property is located in an amount that
is at least equal to the lesser of (i) the maximum insurable value of
the improvements securing
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such Mortgage Loan or (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the Mortgagor and/or the
mortgagee from becoming a co-insurer. If the Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. All such individual insurance
policies and all flood policies referred to in item (xl) below contain
a standard mortgagee clause naming the Seller or the original
mortgagee, and its successors in interest, as mortgagee, and the Seller
has received no notice that any premiums due and payable thereon have
not been paid; the Mortgage obligates the Mortgagor thereunder to
maintain all such insurance, including flood insurance, at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(xl) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the original outstanding principal
balance of the Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis, or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973, as amended.
(xli) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the total or partial
condemnation of the Mortgaged Property.
(xlii) There is no material monetary default existing under
any Mortgage or the related Mortgage Note and, to the best of the
Seller's knowledge, there is no material event that, with the passage
of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
under the Mortgage or the related Mortgage Note; and the Seller has not
waived any default, breach, violation or event of acceleration.
(xliii) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of the Seller's knowledge, no
Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(xliv) Each Mortgage Loan is being serviced by the 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 October
28, 2003.
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(xlv) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
Mortgage Loan Schedule. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan. The Mortgage
Note does not permit or obligate the Master Servicer to make future
advances to the Mortgagor at the option of the Mortgagor.
(xlvi) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents that previously became due and owing have been paid, or an
escrow of funds has been established in an amount sufficient to pay for
every such item that remains unpaid and that has been assessed, but is
not yet due and payable. Except for (A) payments in the nature of
escrow payments, and (B) interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage proceeds,
whichever is later, to the day that precedes by one month the Due Date
of the first installment of principal and interest, including without
limitation, taxes and insurance payments, the 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.
(xlvii) The Mortgage Loans were underwritten in all material
respects in accordance with customary and prudent underwriting
guidelines generally used by originators of credit blemished quality
mortgage loans.
(xlviii) Prior to the approval of the Mortgage Loan
application, an appraisal of the related Mortgaged Property was
obtained from a qualified appraiser, duly appointed by the originator,
who had no interest, direct or indirect, in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan; such
appraisal is in a form acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
(xlix) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and no Mortgage Loan
is subject to a buydown or similar arrangement.
(l) The Mortgage Rates borne by the Mortgage Loans in Loan
Group 1 as of the Cut-off Date ranged from 5.12% per annum to 12.500%
per annum and the weighted average Mortgage Rate as of the Cut-off Date
was 7.49% per annum. The Mortgage Rates borne by the Mortgage Loans in
Loan Group 2 as of the Cut-off Date ranged from 4.70% per annum to
12.78% per annum and the weighted average Mortgage Rate as of the
Cut-off Date was 7.46% per annum.
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(li) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Seller's
portfolio at the Closing Date, as to which the representations and
warranties made as to the Mortgage Loans set forth in this Section
2.03(b) can be made. No selection was made in a manner that would
adversely affect the interests of Certificateholders.
(lii) The Gross Margins on the Adjustable Rate Mortgage Loans
that are Mortgage Loans in Loan Group 1 range from approximately 3.95%
to 11.49% and the weighted average Gross Margin was approximately
6.60%. The Gross Margins on the Adjustable Rate Mortgage Loans that are
Mortgage Loans in Loan Group 2 range from approximately 2.00% to 10.81%
and the weighted average Gross Margin was approximately 6.65%.
(liii) Each Mortgage Loan has a payment date on or before the
Due Date in the month of the first Distribution Date.
(liv) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
(lv) There is no obligation on the part of the Seller under
the terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor.
(lvi) Any leasehold estate securing a Mortgage Loan has a term
of not less than five years in excess of the term of the related
Mortgage Loan.
(lvii) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without regard
to the rule in Treasury Regulation ss. 1.860G 2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially
similar successor provision) and applicable Treasury regulations
promulgated thereunder.
(lviii) No Mortgage Loan was either a "consumer credit
contract" or a "purchase money loan" as such terms are defined in 16
C.F.R. Section 433 nor is any Mortgage Loan a "mortgage" as defined in
15 U.S.C. ss. 1602(aa).
(lix) The information set forth in the Prepayment Charge
Schedule with respect to each Mortgage Loan is complete, true and
correct in all material respects at the date or dates respecting which
such information is furnished and each Prepayment Charge is permissible
and enforceable in accordance with its terms under applicable law upon
the Mortgagor's full and voluntary principal prepayment (except to the
extent that: (1) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally; or (2) the collectibility
thereof may be limited due to acceleration in connection with a
foreclosure or other involuntary prepayment).
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(lx) No Mortgage Loan is a "high cost home loan" as defined in
the Georgia Fair Lending Act, as amended. No Mortgage Loan with a
principal balance at origination (or modification) equal to or less
than the mortgage loan balance limit of Xxxxxx Xxx in effect at the
time of origination (or modification) and secured by owner-occupied
real property located in the State of Georgia was originated (or
modified) on or after October 1, 2002 through and including March 6,
2003.
(lxi) No Mortgage Loan is a "high cost home loan" as defined
in New York Banking Law 6-1.
(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.
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With respect to any Replacement Mortgage Loan or Loans, the Seller
delivering such Replacement Mortgage Loan shall deliver to the Trustee for the
benefit of the Certificateholders the related Mortgage Note, Mortgage and
assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Co-Trustee shall
release to the Representing Party the Mortgage File relating to such Deleted
Mortgage Loan and held for the benefit of the Certificateholders and shall
execute and deliver at the Master Servicer's direction such instruments of
transfer or assignment as have been prepared by the Master Servicer, in each
case without recourse, as shall be necessary to vest in the Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due (in the 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
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to repurchase or replace such Mortgage Loan and upon such deposit of the
Purchase Price, the delivery of the Opinion of Counsel required by Section 2.05,
if any, and the receipt of a Request for Release in the form of Exhibit N
hereto, the Co-Trustee shall release the related Mortgage File held for the
benefit of the Certificateholders to such Seller, and the Trustee shall execute
and deliver at such Person's direction the related instruments of transfer or
assignment prepared by such Seller, in each case without recourse, as shall be
necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to such Seller to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
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 may be
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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
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making such repurchase or substitution delivers to the Trustee an Opinion of
Counsel, addressed to the Trustee, to the effect that such repurchase or
substitution would not (i) result in the imposition of the tax on "prohibited
transactions" of the Trust Fund or contributions after the Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or the
substitution therefor shall occur (subject to compliance with Sections 2.02,
2.03 or 2.04) upon the earlier of (a) the occurrence of a default or imminent
default with respect to such loan and (b) receipt by the Trustee of an Opinion
of Counsel to the effect that such repurchase or substitution, as applicable,
will not result in the events described in clause (i) or clause (ii) of the
preceding sentence.
(b) Upon discovery by the Depositor, the Seller, the 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
(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
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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
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assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties 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
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subservicer performed pursuant to the related subservicing agreement shall be
performed as an agent of the Master Servicer with the same force and effect as
if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
Section 3.03 Rights of the Depositor, the Seller 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); and
(ii) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(f) in connection with any losses on
Permitted Investments.
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In the
event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering a written notice to the Trustee that
describes the amounts deposited in error in the
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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 September 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) On the Closing Date, the Seller shall deposit into the Distribution
Account an amount equal to $548.68. The Trustee shall allocate such amount to
Loan Group 1 and Loan Group 2 based on the Stated Principal Balances of each
Loan Group and distribute such amount to the Certificates on the first
Distribution Date pursuant to Section 4.04(d).
(f) Each institution that maintains the Certificate Account or the
Distribution Account shall invest the funds in each such account, as directed by
the Master Servicer, in Permitted Investments, which shall mature not later than
(x) in the case of the Certificate Account, the second Business Day next
preceding the related Distribution Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
Certificate Account, then such Permitted Investment shall mature not later than
the Business Day next preceding such Distribution Account Deposit Date) and (y)
in the case of the Distribution Account, the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains such Distribution Account, then such Permitted Investment shall mature
not later than such Distribution Date), in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the Trustee, for the benefit of the Certificateholders. In the
case of the Certificate Account and the Distribution Account, all income and
gain net of any losses realized from any such investment shall be for the
benefit of the Master Servicer as servicing compensation and shall be remitted
to it monthly as provided herein, 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. Any losses incurred in the
Carryover Reserve Fund in respect of any such investments shall be charged
against amounts on deposit in the Carryover Reserve Fund (or such investments)
immediately as realized. The Trustee shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in the Certificate Account, the Distribution Account, the Carryover Reserve Fund
and made in accordance with this Section 3.05 (or in the case of the Carryover
Reserve Fund, Section 4.08).
(g) The 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
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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 prior to any change thereof.
(h) The Trustee shall establish and maintain, on behalf of the Class P
Certificateholders, the Class P Distribution Account. Funds in the Class P
Distribution Account shall be held in trust for the Class P Certificateholders
for the uses and purposes set forth in this Agreement. Such funds may not be
invested.
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Master Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Master Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
Section 3.07 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance policies and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
designated by it.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder or
Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to
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be reimbursed by each such Certificateholder or Certificate Owner for actual
expenses incurred by the Master Servicer in providing such reports and access.
Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account 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 each of the Master Servicer and the Trustee
for Advances made by it with respect to the Mortgage Loans, such right
of reimbursement pursuant to this subclause (ii) being limited to
amounts received 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 each of the Master Servicer and the Trustee
for any Nonrecoverable Advance previously made by it;
(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 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;
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(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 each Loan Group for such Distribution Date to
the extent on deposit in the Certificate Account, and the Trustee shall deposit
such amount in the Distribution Account.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii), (iv),
(v) and (vi) above. Prior to making any withdrawal from the Certificate Account
pursuant to subclause (iii), the Master Servicer shall deliver to the Trustee an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Master Servicer to be a Nonrecoverable
Advance and identifying the related Mortgage Loan(s), and their respective
portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to retain pursuant to the last paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay 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;
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(v) to reimburse the Trustee for any unreimbursed Advances
made by it pursuant to Section 4.01(b) hereof, such right of
reimbursement pursuant to this subclause (iv) being limited to (x)
amounts received on the related Mortgage Loan(s) in respect of which
any such Advance was made and (y) amounts not otherwise reimbursed to
the Trustee pursuant to Section 3.08(a)(ii) hereof;
(vi) to reimburse the Trustee for any Nonrecoverable Advance
previously made by the Trustee pursuant to Section 4.01(b) hereof, such
right of reimbursement pursuant to this subclause (v) being limited to
amounts not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(iii) hereof; and
(vii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
The Co-Trustee shall pay the Mortgage Insurance Premium to The Mortgage
Insurer in accordance with the following wiring instructions: US Bank, 000 X.
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, ABA #000000000 for the Account of
Mortgage Guaranty Insurance Corporation Account #112663706, Attention: Premium
Pay - Deal #1565 3147643044 (2003-BC4).
(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
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Loan, to the extent described below. Pursuant to Section 3.05 hereof, any
amounts collected by the Master Servicer under any such policies (other than the
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Certificate Account. Any cost incurred by the Master Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In 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
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into a substitution of liability agreement with such Person, pursuant to which
the original Mortgagor is released from liability and such Person is substituted
as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Master Servicer shall not be deemed to be in default under this
Section 3.11(a) by reason of any transfer or assumption that the Master Servicer
reasonably believes it is restricted by law from preventing.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin,
the Periodic Rate Cap, the Adjustment Date and any other term affecting the
amount or timing of payment on the Mortgage Loan) may be changed. In addition,
the substitute Mortgagor and the Mortgaged Property must be acceptable to the
Master Servicer in accordance with its underwriting standards as then in effect.
The 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
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liquidation of the Mortgage Loan after reimbursement to itself of such expenses
and (ii) that such expenses will be recoverable to it through Liquidation
Proceeds (respecting which it shall have priority for purposes of withdrawals
from the Certificate Account pursuant to Section 3.08 hereof). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that a
Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Master Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity thereunder. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall either itself or through an agent selected by the Master
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income 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
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Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding, the Trust Fund may continue to hold such Mortgaged Property
(subject to any conditions contained in such Opinion of Counsel) after the
expiration of such three-year period. Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject the Trust Fund to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the 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
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the lien of the Mortgage or the making of any corrections to the Mortgage Note
or the Mortgage or any of the other documents included in the Mortgage File, the
Co-Trustee shall, upon delivery to the Co-Trustee of a Request for Release in
the form of Exhibit M signed by a Servicing Officer, release the Mortgage File
to the Master Servicer. Subject to the further limitations set forth below, the
Master Servicer shall cause the Mortgage File or documents so released to be
returned to the Co-Trustee when the need therefor by the Master Servicer no
longer exists, unless the Mortgage Loan is liquidated and the proceeds thereof
are deposited in the Certificate Account, in which case the Co-Trustee shall
deliver the Request for Release to the Master Servicer.
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
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Account or Carryover Reserve Fund or in any Escrow Account (as defined in
Section 3.06), or any funds that otherwise are or may become due or payable to
the Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of set off against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that the Master Servicer shall be entitled to set off against
and deduct from any such funds any amounts that are properly due and payable to
the Master Servicer under this Agreement.
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 or
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the 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.
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Section 3.17 Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the Trustee on
or before the 80th day after the end of the Master Servicer's fiscal year,
commencing with its 2003 fiscal year, an Officer's Certificate stating, as to
the signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of the performance of the Master Servicer
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) the 80th day after the end of the Master
Servicer's fiscal year, commencing with its 2003 fiscal year or (ii) within 30
days of the issuance of the annual audited financial statements beginning with
the audit for the period ending in 2003, the 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 Contracts.
The Seller shall assign all of its right, title and interest in and to
the interest rate cap transactions evidenced by the Cap Contracts 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 Agreements. The Cap Contracts will be
assets of the Trust Fund but will not assets of any REMIC. The Master Servicer,
on behalf of the Trustee,
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shall deposit any amounts received from time to time with respect to the Cap
Contracts into the Carryover Reserve Fund.
The Master Servicer, on behalf of the Trustee, shall prepare and
deliver any notices required to be delivered under the Cap Contracts.
The Master Servicer, on behalf of the Trustee, shall act as calculation
agent and/or shall terminate the Cap Contracts, in each case upon the occurrence
of certain events of default or termination events to the extent specified
thereunder. Upon any such termination, the Cap Contract Counterparty will be
obligated to pay the Trustee or the Master Servicer for the benefit of the Trust
Fund an amount in respect of such termination. Any amounts received by the
Trustee or the Master Servicer for the benefit of the Trust Fund, as the case
may be, in respect of such termination shall be deposited and held in the
Carryover Reserve Fund to pay Net Rate Carryover for the 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
related Cap Contract Termination Date. On the related 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.
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Master Servicer may not waive any Prepayment Charge or portion thereof required
by the terms of the related Mortgage Note unless (i) the Master Servicer
determines that such waiver would maximize recovery of Liquidation Proceeds for
such Mortgage Loan, taking into account the value of such Prepayment Charge, or
(ii) (A) the enforceability thereof is limited (1) by bankruptcy, insolvency,
moratorium, receivership, or other similar law relating to creditors' rights
generally or (2) due to acceleration in connection with a foreclosure or other
involuntary payment, or (B) the enforceability is otherwise limited or
prohibited by applicable law. In the event of a Principal Prepayment in full or
in part with respect to any Mortgage Loan, the Master Servicer shall deliver to
the Trustee an Officer's Certificate substantially in the form of Exhibit T no
later than the third Business Day following the immediately succeeding
Determination Date with a copy to the Class P Certificateholders. If the Master
Servicer has waived or does not collect all or a portion of a Prepayment Charge
relating to a Principal Prepayment in full or in part due to any action or
omission of the Master Servicer, other than as provided above, the Master
Servicer shall deliver to the Trustee, together with the Principal Prepayment in
full or in part, the amount of such Prepayment Charge (or such portion thereof
as had been waived) for deposit into the Certificate Account (not later than the
immediately succeeding Master Servicer Advance Date, in the case of such
Prepayment Charge) for distribution in accordance with the terms of this
Agreement.
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(b) Upon discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing subsection (a), the party discovering
the breach shall give prompt written notice to the other parties.
(c) The Seller represents and warrants to the Depositor and the
Trustee, as of the Closing Date, that the information in the Prepayment Charge
Schedule (including the attached prepayment charge summary) is complete and
accurate in all material respects at the dates as of which the information is
furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms under applicable state law, except as the
enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.
(d) Upon discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing clause (c) that materially and
adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties. Within 60 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of breach, the
Master Servicer shall cure the breach in all material respects or shall pay into
the Certificate Account the amount of the Prepayment Charge that would otherwise
be due from the Mortgagor, less any amount representing such Prepayment Charge
previously collected and paid by the Master Servicer into the Certificate
Account.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances.
(a) The Master Servicer shall determine on or before each Master
Servicer Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make an
Advance, it shall, on or before the Master Servicer Advance Date, either (i)
deposit into the Certificate Account an amount equal to the Advance or (ii) make
an appropriate entry in its records relating to the Certificate Account that any
Amount Held for Future Distribution has been used by the Master Servicer in
discharge of its obligation to make any such Advance. Any funds so applied shall
be replaced by the Master Servicer by deposit in the Certificate Account no
later than the close of business on the next Master Servicer Advance Date. 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 if such Mortgage Loan has been foreclosed or otherwise terminated
and the related Mortgaged Property has not been liquidated.
(b) If the Master Servicer determines that it will be unable to comply
with its obligation to make the Advances as and when described in the second
sentence of Section 4.01(a), it shall use its best efforts to give written
notice thereof to the Trustee (each such notice a "Trustee Advance Notice"; and
such notice may be given by telecopy), not later than 3:00 P.M., New York time,
on the Business Day immediately preceding the related Master Servicer Advance
Date, specifying the amount that it will be unable to deposit (each such amount
an "Advance Deficiency") and certifying that such Advance Deficiency constitutes
an Advance hereunder and is not a Nonrecoverable Advance. If the Trustee
receives a Trustee Advance Notice on or before 3:30 P.M., New York time on a
Master Servicer Advance Date, the Trustee shall, not later than 3:00 P.M., New
York time, on the related Distribution Date, deposit in the Distribution Account
an amount equal to the Advance Deficiency identified in such Trustee Advance
Notice unless it is prohibited from so doing by applicable law. Notwithstanding
the foregoing, the Trustee shall not be required to make such deposit if the
Trustee shall have received written notification from the Master Servicer that
the Master Servicer has deposited or caused to be deposited in the Certificate
Account an amount equal to such Advance Deficiency. All Advances made by the
Trustee pursuant to this Section 4.01(b) shall accrue interest on behalf of the
Trustee at the Trustee Advance Rate from and including the date such Advances
are made to but excluding the date of repayment, with such interest being an
obligation of the Master Servicer and not the Trust Fund. The Master Servicer
shall reimburse the Trustee for the amount of any Advance made by the Trustee
pursuant to this Section 4.01(b) together with accrued interest, not later than
6:00 P.M., New York time on the Business Day following the related Distribution
Date. In the event that the Master Servicer does not reimburse the Trustee in
accordance with the requirements of the preceding sentence, the Trustee shall
immediately (a) terminate all of the rights and obligations of the Master
Servicer under this Agreement in accordance
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with Section 7.01 and (b) subject to the limitations set forth in Section 3.04,
assume all of the rights and obligations of the Master Servicer hereunder.
(c) The Master Servicer, not later than the close of business on the
second Business Day immediately preceding each Distribution Date, shall deliver
to the Trustee a report (in the form and substance reasonably satisfactory to
the Trustee) that indicates (i) the Mortgage Loans with respect to which the
Master Servicer has determined that the related Scheduled Payments should be
advanced and (ii) the amount of the related Scheduled Payments. The Master
Servicer shall deliver to the Trustee on the related Master Servicer Advance
Date an Officer's Certificate of a Servicing Officer indicating the amount of
any proposed Advance determined by the Master Servicer to be a Nonrecoverable
Advance.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall, 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.
Section 4.03 [Reserved]
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such Distribution
Date shall be allocated by the Trustee from the Distribution Account in the
following order of priority:
(i) concurrently
(A) from the Interest Funds for Loan Group 1 (and
after the distribution of Interest Funds from Loan Group 2 as
provided in clause (B) below, from Interest Funds for Loan
Group 2), to the Class 1-A Certificates, the Class 1-A Current
Interest and any Class 1-A Interest Carry Forward Amount, and
(B) from the Interest Funds for Loan Group 2 (and
after the distribution of Interest Funds from Loan Group 1 as
provided in clause (A) above, from Interest Funds for Loan
Group 1), concurrently to the Class 2-A-1 Certificates and
Class 2-A- 2 Certificates, the related Current Interest and
any Interest Carry Forward Amount with any shortfall being
allocated pro rata on the basis of the respective entitlements
of each such Class;
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(ii) from the Interest Funds for both Loan Groups to the Class
M-1 Certificates, the Class M-1 Current Interest;
(iii) from the Interest Funds for both Loan Groups to the
Class M-2 Certificates, the Class M-2 Current Interest;
(iv) from the Interest Funds for both Loan Groups to the Class
M-3 Certificates, the Class M-3 Current Interest;
(v) from the Interest Funds for both Loan Groups to the Class
M-4 Certificates, the Class M-4 Current Interest;
(vi) from the Interest Funds for both Loan Groups to the Class
M-5 Certificates, the Class M-5 Current Interest;
(vii) from the Interest Funds for both Loan Groups to the
Class M-6 Certificates, the Class M-6 Current Interest;
(viii) from the Interest Funds for both Loan Groups to the
Class B Certificates, the Class B Current Interest; and
(ix) any remainder, as part of the Excess Cashflow.
(b) On each Distribution Date on or prior to the related Cap Contract
Termination Date, amounts received in respect of the Cap Contracts for such
Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each applicable Class of Certificates (other than the Class A-R
and Class P Certificates) pursuant to Section 4.04(e)(iv); provided, however,
that if the Cap Contracts are subject to early termination, early termination
payments shall be held by the Trustee until the related 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) Upon the earlier of (a) the exercise of the Optional Termination by
the Master Servicer pursuant to Section 9.01 and (b) the Class P Principal
Distribution Date, all funds on deposit in the Class P Distribution Account
shall be distributed the Class P Certificates.
(d) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date with respect to each Loan Group shall be allocated by the
Trustee from the Distribution Account in the following order of priority:
(i) with respect to any Distribution Date prior to the
Stepdown Date or as to which a Trigger Event is in effect:
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(A) concurrently, (i) from the Principal Distribution
Amount for Loan Group 1, sequentially to the Class A-R
Certificates and Class 1-A Certificates, in that order, until
the Certificate Principal Balance of each such Class is
reduced to zero and (ii) from the Principal Distribution
Amount for Loan Group 2, sequentially, to the Class 2-A-1
Certificates and Class 2-A-2 Certificates, in that order,
until the Certificate Principal Balance of each such Class is
reduced to zero; provided, however that (x) after the
Certificate Principal Balance of the Class 1-A Certificates
has been reduced to zero, the Principal Distribution Amount
from both Loan Groups will be applied sequentially to the
Class 2-A-1 Certificates and Class 2-A-2 Certificates, in that
order, until the Certificate Principal Balance of each such
Class is reduced to zero and (y) after the Certificate
Principal Balances of the Class 2-A-1 Certificates and Class
2-A-2 Certificates have been reduced to zero, the Principal
Distribution Amount from both Loan Groups will be applied to
the Class A-R Certificates and Class 1-A Certificates, in that
order, until the Certificate Principal Balance of each such
Class is reduced to zero;
(B) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(C) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-2 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(D) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(E) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-4 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(F) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-5 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(G) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-6 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(H) the remaining Principal Distribution Amount for
both Loan Groups, to the Class B Certificates, until the
Certificate Principal Balance thereof is reduced to zero; and
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(I) any remainder, as part of the Excess Cashflow.
(ii) with respect to each Distribution Date on and after the
Stepdown Date and as to which a Trigger Event is not in effect:
(A) concurrently, (i) from the Principal Distribution
Amount for Loan Group 1 to the Class 1-A Certificates in an
amount equal to the Class 1-A Principal Distribution Amount,
until the Certificate Principal Balance thereof is reduced to
zero and (ii) from the Principal Distribution Amount for Loan
Group 2, sequentially, to the Class 2-A-1 Certificates and
Class 2-A-2 Certificates, in that order, in an amount equal to
the Class 2-A Principal Distribution Amount until the
Certificate Principal Balance of each such Class is reduced to
zero; provided, however that (x) after the Certificate
Principal Balance of the Class 1-A Certificates has been
reduced to zero, the Principal Distribution Amount from both
Loan Groups will be applied sequentially to the Class 2-A-1
Certificates and Class 2-A-2 Certificates, in that order, in
an amount equal to the sum of the Class 2-A Principal
Distribution Amount and any undistributed Class 1-A Principal
Distribution Amount until the Certificate Principal Balance of
each such Class is reduced to zero and (y) after the
Certificate Principal Balances of the Class 2-A-1 Certificates
and Class 2-A-2 Certificates have been reduced to zero, the
Principal Distribution Amount from both Loan Groups will be
applied to the Class 1-A Certificates in an amount equal to
the sum of the Class 1-A Principal Distribution Amount and any
undistributed Class 2-A 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 M-3 Certificates, the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(E) to the Class M-4 Certificates, the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(F) to the Class M-5 Certificates, the Class M-5
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(G) to the Class M-6 Certificates, the Class M-6
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
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(H) to the Class B Certificates, the Class B
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero; and
(I) any remainder, as part of the Excess Cashflow.
(e) With respect to any Distribution Date, any Excess Cashflow will be
paid to the classes of Certificates as follows:
(i) from Excess Cashflow from both Loan Groups, to the holders
of the Class or Classes of Offered Certificates (other than the Class
A-R Certificates) then entitled to receive distributions in respect of
principal, in an amount equal to the Extra Principal Distribution
Amount, payable to such holders as part of the Principal Distribution
Amount pursuant to Section 4.04(d) above;
(ii) from any remaining Excess Cashflow from both Loan Groups,
sequentially to the holders of the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6 and Class B Certificates, in that
order, in an amount equal to any Interest Carry Forward Amount for such
Class or Classes;
(iii) from any remaining Excess Cashflow from both Loan
Groups, sequentially to the holders of the Class X-0, Xxxxx X-0, Class
M-3, Class M-4, Class M-5, Class M-6 and Class B Certificates, in that
order, in an amount equal to the Unpaid Realized Loss Amounts for such
Class or Classes;
(iv) from any remaining Excess Cashflow from both Loan Groups
and from the related Cap Contract Payment Amount, to the Class 1-A,
Class 2-A-1, Class 2-A-2, Class X-0, Xxxxx X-0, Class M-3, Class M-4,
Class M-5, Class M-6 and Class B Certificates, on a pro rata basis,
based on the Certificate Principal Balances thereof, to the extent
needed to pay any Net Rate Carryover for each such class; provided that
any Excess Cashflow remaining after such allocation to pay Net Rate
Carryover based on the Certificate Principal Balances of these
Certificates will be distributed to each such class of Certificates
with respect to which there remains any unpaid Net Rate Carryover
(after the distribution based on Certificate Principal Balances), pro
rata, based on the amount of such unpaid Net Rate Carryover, until
reduced to zero;
(v) from any remaining Excess Cashflow from both Loan Groups
and Cap Contract Payment Amounts, 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
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(vi) any remaining Excess Cashflow from both Loan Groups and
Cap Contract Payment Amounts, to the Class A-R Certificates.
(f) On each Distribution Date, all Prepayment Charges (including
amounts deposited in connection with the full or partial waiver of such
Prepayment Charges pursuant to Section 3.20) shall be distributed to the Class P
Certificates.
(g) To the extent that a Class of Certificates (other than the Class
A-R, Class C and Class P Certificates) receives interest in excess of the Net
Rate Cap, such interest shall be treated as having been paid to the Carryover
Reserve Fund and then paid by the Carryover Reserve Fund to such
Certificateholders.
(h) [reserved]
(i) On each Distribution Date, the Trustee shall allocate the Applied
Realized Loss Amount to reduce the Certificate Principal Balances of the
Subordinate Certificates in the following order of priority:
(i) to the Class B Certificates until the Class B Certificate
Principal Balance is reduced to zero;
(ii) to the Class M-6 Certificates until the Class M-6
Certificate Principal Balance is reduced to zero;
(iii) to the Class M-5 Certificates until the Class M-5
Certificate Principal Balance is reduced to zero;
(iv) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero;
(v) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(vi) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and
(vii) 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
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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 be responsible to recompute, recalculate or verify information
provided to it by the Master Servicer and shall be permitted to conclusively
rely on any information provided to it by the Master Servicer.
Section 4.05 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Holder of a Class of
Certificates of the Trust Fund, the Master Servicer, the Seller and the
Depositor a statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate
amount of any Principal Prepayments included therein and (B) the
aggregate of all scheduled payments of principal included therein;
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
(iii) any Interest Carry Forward Amount for each Class;
(iv) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss
Amounts for such Distribution Date;
(v) the aggregate of the Stated Principal Balances of the
Mortgage Loans for the Mortgage Pool and each Loan Group;
(vi) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
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(vii) the Pass-Through Rate for each Class of Certificates
with respect to the current Accrual Period;
(viii) with respect to the September 2003 Distribution Date,
the Seller Shortfall Interest Requirement (if any) for the related
Master Servicer Advance Date;
(ix) the amount of Advances for each Loan Group included in
the distribution on such Distribution Date;
(x) the cumulative amount of Applied Realized Loss Amounts to
date;
(xi) 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 in each Loan Group: (A) Delinquent (exclusive of Mortgage Loans
in foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more
days, and (B) in foreclosure and Delinquent (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days, in each case as of the close of
business on the last day of the calendar month preceding such
Distribution Date;
(xiii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month in each Loan Group, the
loan number and Stated Principal Balance of such Mortgage Loan;
(xiv) and the aggregate Stated Principal Balances of any
Mortgage Loans converted to REO Properties as of the close of business
on the Determination Date preceding such Distribution Date;
(xv) the aggregate Stated Principal Balances of all Liquidated
Loans;
(xvi) with respect to any Liquidated Loan in each Loan Group,
the loan number and Stated Principal Balance relating thereto;
(xvii) with respect to each Loan Group, whether a Trigger
Event has occurred;
(xviii) any Net Rate Carryover paid on each Class of
Certificates (other than the Class A-R, Class C and Class P
Certificates) and any remaining Net Rate Carryover remaining on each
Class of Certificates (other than the Class A-R, Class C and Class P
Certificates) on such Distribution Date;
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(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 Contracts
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:
(i) The original projected principal and interest cash flows
on the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each related
Class of regular and residual interests created hereunder and the
Mortgage Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with
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respect to each related Class of regular or residual interests created
hereunder and to the Mortgage Loans, together with each constant yield
to maturity used in computing the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of the
related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
related REMIC; and
(vii) Any taxes (including penalties and interest) imposed on
the related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 [Reserved]
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund. The Carryover Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement.
(b) The Trustee shall make withdrawals from the Carryover Reserve Fund
to make distributions of amounts payable from each Cap Contract to the related
Certificates 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 distributed to the Class C Certificates; provided, however,
that if the Cap Contracts are subject to early termination, early termination
payments received on such Cap Contracts will be held by the Trustee until the
related 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
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as to the investment of amounts therein. In the absence of such written
direction, all funds in the Carryover Reserve Fund shall be invested by the
Trustee in The Bank of New York cash reserves.
(d) Upon termination of the Trust Fund, any amounts remaining in the
Carryover Reserve Fund shall be distributed to the Holders of the Class C
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.
Section 4.09 Distributions on the REMIC I Regular Interests.
(a) (1)(A) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class AR Certificates (in respect
of the Class R-I Interest), as the case may be:
(i) first, (a) to Holders of REMIC I Regular Interest LT-AA,
REMIC Regular Interest LT-A1, REMIC Regular Interest LT-2A1, REMIC
Regular Interest LT-2A2, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC Regular Interest LT-M3, REMIC Regular
Interest LT-M4, REMIC Regular Interest LT-M5, REMIC Regular Interest
LT-M6, REMIC Regular Interest LT-B, REMIC I Regular Interest LT-ZZ,
REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R, pro
rata, in an amount equal to (A) the Uncertificated Accrued Interest for
such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates. Amounts payable as
Uncertificated Accrued Interest in respect of REMIC I Regular Interest
LT-ZZ shall be reduced and deferred when the REMIC I Overcollateralized
Amount is less than the REMIC I Overcollateralization Target Amount, by
the lesser of (x) the amount of such difference and (y) the REMIC I
Regular Interest LT-ZZ Maximum Interest Deferral Amount and such amount
will be payable to the Holders of REMIC Regular Xxxxxxxx XX-X0, REMIC
Regular Interest LT-2A1, REMIC Regular Interest LT-2A2, REMIC I Regular
Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC Regular Interest
LT-M3, REMIC Regular Interest LT-M4, REMIC Regular Interest LT-M5,
REMIC Regular Interest LT-M6 and REMIC Regular Interest LT-B in the
same proportion as the Overcollateralization Increase Amount is
allocated to the Corresponding Certificates; and
(b) to Holders of REMIC I Regular Interest LT-1SUB, REMIC I Regular
Interest LT-1GRP, REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest
LT-2GRP and REMIC I Regular Interest LT-XX, pro rata, in an amount equal to (A)
the Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution Dates
(i) second, to the Holders of REMIC I Regular Interests, in an
amount equal to the remainder of the REMIC I Marker Allocation
Percentage of Available Funds for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
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(ii) (a) to the Holders of REMIC I Regular Interest LT-AA and
REMIC I Regular Interest LT-P, 98.00% of such remainder (other than
amounts payable under clause (d) below), until the Uncertificated
Principal Balance of such REMIC I Regular Interest is reduced to zero,
provided, however, that REMIC I Regular Interest LT-P shall not be
reduced until the Distribution Date immediately following the
expiration of the latest Prepayment Charge as identified on the
Prepayment Charge Schedule or any Distribution Date thereafter, at
which point such amount shall be distributed to REMIC I Regular
Interest LT-P, until $100 has been distributed pursuant to this clause;
(b) to the Holders of REMIC I Regular Xxxxxxxx XX-X0, REMIC I
Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I
Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I Regular
Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular
Interest LT-M5, REMIC I Regular Interest LT-M6 and REMIC Regular
Interest LT-B, 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 I Regular Interests are
reduced to zero;
(c) to the Holders of REMIC I Regular Interest LT-ZZ, 1.00% of
such remainder (other than amounts payable under clause (d) below),
until the Uncertificated Principal Balance of such REMIC I Regular
Interest is reduced to zero; then
(d) any remaining amount to the Holders of the Class AR
Certificates (in respect of the Class R-I Interest); and
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of (i) REMIC I Regular Interest LT-AA and REMIC I Regular Interest
LT-P, in that order and (ii) REMIC I Regular Interest LT-P, respectively;
provided that REMIC I Regular Interest LT-P shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest LT-P, until $100 has been distributed pursuant to this clause.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
will be distributed by REMIC I to the Holders of REMIC I Regular Interest LT-P.
The payment of the foregoing amounts to the Holders of REMIC I Regular Interest
LT-P shall not reduce the Uncertificated Principal Balance thereof.
(iii) third, to the Holders of REMIC I Regular Interests, in
an amount equal to the remainder of the REMIC I Sub WAC Allocation
Percentage of Available Funds for such
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Distribution Date after the distributions made pursuant to clause (i)
above, allocated as follows:
(a) Distributions of principal shall be deemed to be made to
the REMIC I Regular Interests first, so as to keep the Uncertificated
Principal Balance of each REMIC I Regular Interest ending with the
designation "GRP" equal to 0.01% of the aggregate Stated Principal
Balance of the Mortgage Loans in the related Group; second, to each
REMIC I Regular Interest ending with the designation "SUB," so that the
Uncertificated Principal Balance of each such REMIC I Regular Interest
is equal to 0.01% of the excess of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in the related Group over (y) the
Certificate Principal Balance of the Class A Certificate in the related
Group (except that if any such excess is a larger number than in the
preceding distribution period, the least amount of principal shall be
distributed to such REMIC I Regular Interests such that the REMIC I
Subordinated Balance Ratio is maintained); and third, any remaining
principal to REMIC I Regular Interest LT-XX.
Section 4.10 [Reserved].
Section 4.11 Allocation of Realized Losses on the REMIC I Regular
Interests.
(a) The REMIC I Marker Percentage of all Realized Losses on the
Mortgage Loans shall be allocated by the Trustee on each Distribution Date to
the following REMIC I Regular Interests in the specified percentages, as
follows: first, to Uncertificated Interest payable to the REMIC I Regular
Interest LT-AA and REMIC I Regular Interest LT-ZZ up to an aggregate amount
equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of the REMIC I Regular Interest
LT-AA and REMIC I Regular Interest LT-ZZ up to an aggregate amount equal to the
REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Principal Balances of REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-B and REMIC I Regular Interest LT-ZZ, 98%, 1.00% and 1%,
respectively, until the Uncertificated Principal Balances of REMIC I Regular
Interest LT-B has been reduced to zero; fourth to the Uncertificated Principal
Balances of REMIC I Regular Interest LT-AA, REMIC I Regular Interest LT-M6 and
REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M6 has been
reduced to zero; fifth to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-M5 and REMIC I Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT-M5 has been reduced to zero; sixth to the
Uncertificated Principal Balances of REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-M4 and REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M4 has been reduced to zero; seventh to the Uncertificated Principal
Balances of REMIC I Regular Interest LT-AA, REMIC I Regular Interest LT-M3 and
REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M3 has been
reduced to zero; eighth to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA,
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REMIC I Regular Interest LT-M2 and REMIC I Regular Interest LT-ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M2 has been reduced to zero; and eighth sixth to the Uncertificated
Principal Balances of REMIC I Regular Interest LT-AA, REMIC I Regular Interest
LT-M1 and REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC I Regular Interest LT-M1 has been
reduced to zero.
(b) The REMIC I Sub WAC Allocation Percentage of all Realized Losses
shall be applied after all distributions have been made on each Distribution
Date first, so as to keep the Uncertificated Principal Balance of each REMIC I
Regular Interest ending with the designation "GRP" equal to 0.01% of the
aggregate Stated Principal Balance of the Mortgage Loans in the related Group;
second, to each REMIC I Regular Interest ending with the designation "SUB," so
that the Uncertificated Principal Balance of each such REMIC I Regular Interest
is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in the related Group over (y) the Certificate Principal
Balance of the Senior Certificate in the related Group (except that if any such
excess is a larger number than in the preceding distribution period, the least
amount of Realized Losses shall be applied to such REMIC I Regular Interests
such that the REMIC I Subordinated Balance Ratio is maintained); and third, any
remaining Realized Losses shall be allocated to REMIC I Regular Interest LT-XX.
Section 4.12 Termination of the Mortgage Insurance Policy.
If on any given date the rating of The Mortgage Insurer's claims-paying
ability 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.
Section 4.13 The Class P Certificates.
On the Closing Date, $100 shall be deposited into the Class P
Distribution Account and shall be held in trust for the benefit of the Class P
Certificateholders for payment pursuant to Section 4.04 upon the earlier of (a)
the exercise of the Optional Termination by the Master Servicer pursuant to
Section 9.01 and (b) the Class P Principal Distribution Date. Such funds may not
be invested.
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ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-10, 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:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ ----------------- -----------------
1-A $20,000 $1,000 $174,003,000
2-A-1 $20,000 $1,000 $206,250,000
2-A-2 $20,000 $1,000 $315,747,000
A-R $99.95(1) N/A $ 100
M-1 $20,000 $1,000 $ 44,000,000
M-2 $20,000 $1,000 $ 12,000,000
M-3 $20,000 $1,000 $ 12,000,000
M-4 $20,000 $1,000 $ 12,000,000
M-5 $20,000 $1,000 $ 10,000,000
M-6 $20,000 $1,000 $ 8,000,000
B $20,000 $1,000 $ 6,000,000
C 20% 1% $ 0
P 20% 1% $ 100
(1) The Tax Matters Person Certificate may be issued in a denomination
of $0.05.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
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
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Trustee shall authenticate the Certificates to be issued at the written
direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.09 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee in writing the facts
surrounding the Transfer in substantially the forms set forth in Exhibit J (the
"Transferor Certificate") and (i) deliver a letter in substantially the form of
either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other
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information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee, the Co-Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Trustee, the Co-Trustee, the Depositor, the Seller and the Master
Servicer against any liability that may result if the Transfer is not so exempt
or is not made in accordance with such federal and state laws.
No Transfer of an ERISA-Restricted Certificate or a Subordinate
Certificate shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee (in the event such Certificate is a
Private Certificate that is a Definitive Certificate, such requirement is
satisfied only by the Trustee's receipt of a representation letter from the
transferee substantially in the form of Exhibit K or Exhibit L, or in the event
such Certificate is a Class A-R Certificate, such requirement is satisfied only
by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code, nor a Person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement to effect such transfer, or (ii) in the case of the Subordinate
Certificates (A) 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 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, for the benefit of the
Trustee, the Seller, the Depositor, the Co-Trustee and the Master Servicer, and
on which they may rely, which opinion of counsel shall not be an expense of
either the Trustee or the Trust Fund, addressed to the Trustee to the effect
that the purchase and holding of such ERISA-Restricted Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
and will not subject the Depositor, the 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
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referred to in the preceding sentence is not so furnished, such representation
shall be deemed to have been made to the Trustee by the transferee's (including
an initial acquiror's) acceptance of such ERISA-Restricted Certificate.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA-Restricted Certificate or a Subordinate Certificate to or on behalf of
an employee benefit plan subject to ERISA or the Code 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 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.
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(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit, 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.
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Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Master Servicer and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master Servicer
or the Trustee may treat the person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and 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 and/or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders and/or Certificate Owners desire to communicate with other
Certificateholders and/or Certificate Owners with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders and/or Certificate Owners propose to
transmit or if the Depositor or 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 and/or Certificate Owners at such recipients' expense
the most recent list of the Certificateholders and/or Certificate Owners of the
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder or Certificate Owner, by receiving and holding a Certificate,
agree that the Trustee shall not be held accountable by reason of the disclosure
of any such information as to the list of the Certificateholders hereunder,
regardless of the source from which such information was derived.
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Section 5.06 Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
5.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Seller, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
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Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor, (b) the Depositor, at its
sole option, advises the Trustee that it elects to terminate the book-entry
system with respect to such Certificates through the Depository or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Certificates, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. The Depositor shall provide the
Trustee with an adequate inventory of certificates to facilitate the issuance
and transfer of Definitive Certificates. Upon surrender to the Trustee of any
such Certificates by the Depository, accompanied by registration instructions
from the Depository for registration, the Trustee shall authenticate and deliver
such Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates its offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, as offices for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Seller.
The Depositor, the Master Servicer and the Seller shall each be liable
in accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Seller.
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 Depositor, the Seller, the Master
Servicer or any such Person from any liability that would otherwise be imposed
by reasons
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of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor, the Seller, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Seller or the Master Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Seller, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Seller or the Master Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. None of the Depositor,
the Seller or the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided that any of the Depositor, the Seller or the Master Servicer
may, in its discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and interests of the Trustee and the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be, expenses, costs and liabilities of the Trust Fund,
and the Depositor, the Seller and the Master Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account as provided by Section 3.08
hereof.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer to such appointment shall
have assumed the Master Servicer's responsibilities, duties, liabilities and
obligations hereunder.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for
persons performing servicing for mortgage loans purchased by Xxxxxx Mae or
Xxxxxxx Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.
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ARTICLE VII
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the Certificate
Account or the Distribution Account or remit to the Trustee any payment
(excluding a payment required to be made under Section 4.01 hereof) required to
be made under the terms of this Agreement, which failure shall continue
unremedied for five calendar days and, with respect to a payment required to be
made under Section 4.01 hereof, for one Business 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;
(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; or
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(vi) the Master Servicer shall fail to reimburse in full the Trustee
not later than 6:00 P.M., New York time on the Business Day following the
related Distribution Date Date for any Advance made by the Trustee pursuant to
Section 4.01(b) together with accrued and unpaid interest.
If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
shall, but only at the direction of the Holders of Certificates evidencing not
less than 25% of the Voting Rights evidenced by the Certificates, by notice in
writing to the Master Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof, other than its rights
as a Certificateholder hereunder. On or after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. The Trustee shall thereupon make any Advance
described in Section 4.01 hereof subject to Section 3.04 hereof. The Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Master Servicer
to pay amounts owed pursuant to Article VIII. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be credited
to the Certificate Account, or thereafter be received with respect to the
Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Master Servicer
hereunder, such Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all fees, costs and expenses relating to the Mortgage Loans that the
Master Servicer
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would have been entitled to if the Master Servicer had continued to act
hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a Xxxxxx 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
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servicing of the Mortgage Loans that are registered with MERS, or (ii) the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to execute and deliver an assignment of Mortgage in recordable
form to transfer the Mortgage from MERS to the Trustee and to execute and
deliver such other notices, documents and other instruments as may be necessary
or desirable to effect a transfer of such Mortgage Loan or servicing of such
Mortgage Loan on the MERS(R) System to the successor Master Servicer. The
predecessor Master Servicer shall file or cause to be filed any such assignment
in the appropriate recording office. The successor Master Servicer shall cause
such assignment to be delivered to the Trustee or the Custodian promptly upon
receipt of the original with evidence of recording thereon or a copy certified
by the public recording office in which such assignment was recorded.
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;
(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
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of each Class of Certificates evidencing not less than 25% of the Voting Rights
of such Class relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement; and
(vi) without in any way limiting the provisions of this Section 8.01 or
Section 8.02 hereof, the Trustee shall be entitled to rely conclusively on the
information delivered to it by the Master Servicer in a Trustee Advance Notice
in determining whether or not it is required to make an Advance under Section
4.01(b), shall have no responsibility to ascertain or confirm any information
contained in any Trustee Advance Notice, and shall have no obligation to make
any Advance under Section 4.01(b) in the absence of a Trustee Advance Notice.
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;
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(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than 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
(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.
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Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to this Agreement or
the Certificates, or in connection with the performance of any of the Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder and (ii) resulting from any error in any tax or
information return prepared by the Master Servicer. Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
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.
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Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Master Servicer and by mailing notice of resignation by first class mail,
postage prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register and each Rating Agency, not less than 60 days before the
date specified in such notice when, subject to Section 8.08, such resignation is
to take effect, and (2) acceptance of appointment by a successor trustee in
accordance with Section 8.08 and meeting the qualifications set forth in Section
8.06. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Master Servicer and one
copy of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Master Servicer
one complete set to the Trustee so removed and one complete set to the successor
so appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
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
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or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to substantially all of the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under the provisions of 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:
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(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Master Servicer, shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this 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 and REMIC
II 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
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Investment Conduit Income Tax Returns (Form 1066 or any successor form adopted
by the Internal Revenue Service) and prepare and file or cause to be prepared
and filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each REMIC created hereunder containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) make or cause
to be made elections, on behalf of each REMIC created hereunder to be treated as
a REMIC on the federal tax return of each such REMIC for its first taxable year
(and, if necessary, under applicable state law); (d) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class A-R Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of the Trust Fund at
all times that any Certificates are outstanding so as to maintain the status of
each REMIC created hereunder as a REMIC under the REMIC Provisions; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any REMIC created hereunder; (h)
pay, from the sources specified in the last paragraph of this Section 8.11, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC created hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
or local income tax or information returns; (j) maintain records relating to
each REMIC created hereunder, including but not limited to the income, expenses,
assets and liabilities of each such REMIC, and the fair market value and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC created hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations
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relating to any tax item of the Trust Fund, and otherwise act on behalf of any
REMIC created hereunder in relation to any tax matter involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors, omissions or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
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 Certificates (pro rata), second, to the Class M-6
Certificates (pro rata), third, to the Class M-5 Certificates (pro rata),
fourth, to the Class M-4 Certificates (pro rata), fifth, to the Class M-3
Certificates (pro rata), sixth, to the Class M-2 Certificates (pro rata),
seventh, to the Class M-1 Certificates (pro rata), and eighth, to the Class 1-A,
Class 2-A-1 and 2-A-2 Certificates (pro rata). Notwithstanding anything to the
contrary contained herein, to the extent that such tax is payable by the Class
A-R Certificates, the Trustee is hereby authorized to retain on any Distribution
Date, from the Holders of the Class A-R Certificates (and, if necessary, second,
from the Holders of the all other Certificates in the priority specified in the
preceding sentence), funds otherwise distributable to such Holders in an amount
sufficient to pay such tax. The Trustee agrees to promptly notify in writing the
party liable for any such tax of the amount thereof and the due date for the
payment thereof.
The Trustee shall treat the rights of the Class 1-A, Class 2-A-1, Class
2-A-2, Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class B Certificateholders to receive
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payments from the Carryover Reserve Fund as rights in three interest rate cap
contracts written by the Cap Contract Counterparty with respect to the Net Rate
Carryover funded by the Cap Contracts and Excess Cashflow, in favor of the
Certificateholders (other than the Holders of the Class A-R, Class C and Class P
Certificates). Thus, each Certificate (other than the Class A-R, Class C and
Class P Certificates) shall be treated as representing ownership of not only
REMIC II Regular Interests, but also ownership of an interest in three interest
rate cap contracts. For purposes of determining the issue price of the REMIC II
Regular Interests, the Trustee shall assume that the Class 1-A Cap Contract,
Class 2-A Cap Contract and Subordinated Cap Contract have values of $220,000,
$760,000 and $672,000, respectively .
Section 8.12 Co-Trustee.
(a) The Co-Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Co-Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they conform
to the requirements of this Agreement, to the extent required by this Agreement.
If any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Co-Trustee shall take action as it deems
appropriate to have the instrument corrected. In addition, the Co-Trustee shall
act as the insured under the Mortgage Insurance Policy and hereby directs the
Master Servicer, on behalf of the Co-Trustee, to take all actions appropriate or
required of the Co-Trustee under the Mortgage Insurance Policy, other than the
payment of the Mortgage Insurance Premium and obtaining the approval of the
Mortgage Insurer with respect to the appointment of a successor servicer.
(b) No provision of this Agreement shall be construed to relieve the
Co-Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(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
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Trustee, unless the Co-Trustee was grossly negligent or acted in bad
faith or with willful misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(i) the Co-Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) the Co-Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv) the Co-Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document;
(v) the Co-Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys; and
(vi) the Co-Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such liability is not assured to it.
(d) The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Co-Trustee
assumes no responsibility for their correctness. The Co-Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Co-Trustee's execution and authentication of 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.
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(f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services are
not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Co-Trustee and any director,
officer, employee or agent of the Co-Trustee shall be indemnified by the Master
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement or the
Certificates, or in connection with the performance of any of the Co-Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Co-Trustee's duties hereunder or by reason of reckless disregard of the
Co-Trustee's obligations and duties hereunder and (ii) resulting from any error
in any tax or information return prepared by the Master Servicer. Such indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Co-Trustee hereunder.
(g) The Co-Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.12 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Co-Trustee shall cease to be eligible in accordance with
the 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.
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(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.
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.
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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
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.
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In the event that any affected Certificateholders shall not surrender
related Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R Certificates shall be entitled to all unclaimed
funds and other assets that remain subject hereto.
Section 9.03 Additional Termination Requirements.
(a) In the event the 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.
140
(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.
141
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
142
consent of the Holders of Certificates of such Class evidencing 66% or more of
the Voting Rights of such Class, or (iii) reduce the aforesaid percentages of
Certificates the Holders of which are required to consent to any such amendment
without the consent of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the 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.
143
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
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;
144
(iii) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 2.04 and 3.12; and
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
(i) Each report to Certificateholders described in Section
4.05;
(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-BC4, 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) Fitch Ratings, Xxx
Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxx
Xxxxxxx, Residential Mortgage, or such other address as may hereinafter be
furnished to the Depositor in writing by Fitch Ratings. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
145
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
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
146
or preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, the Seller or the Trustee during the
Master Servicer's normal business hours, to examine all the books of account,
records, reports and other papers of the Master Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the Depositor,
the Seller or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby authorizes
such accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Depositor,
the Seller or the Trustee of any right under this Section 10.09 shall be borne
by the party requesting such inspection; all other such expenses shall be borne
by the Master Servicer.
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.
* * *
147
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:
------------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By:
------------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:
------------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:
------------------------------
Name: Xxxx Xxxxxx
Title: Assistant Treasurer
148
BNY WESTERN TRUST COMPANY,
not in its individual capacity,
but solely as Co-Trustee
By:
------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
000
XXX XXXX XX XXX XXXX
(solely with respect to its obligations under Section 4.01(d))
By:
----------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of August, 2003, before me, a notary public in and for
said State, appeared Xxxxxxx Xxxxxxxxxxxx, personally known to me on the basis
of satisfactory evidence to be a Vice President of Countrywide Home Loans, Inc.,
one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________
Notary Public
[Notarial Seal]
000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of August, 2003, before me, a notary public in and for
said State, appeared Xxxxxxx Xxxxxxxxxxxx, 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 August, 2003, before me, a notary public in and for
said State, appeared Xxxxxxx Xxxxxxxxxxxx, 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 August, 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 Assistant Treasurer of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________
Notary Public
[Notarial Seal]
000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of August, 2003, before me, a notary public in and for
said State, appeared Xxxxxxxx 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]
155
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class 1-A Certificate as
delivered.
[See appropriate documents delivered at closing]
A-1
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class 2-A-1 Certificate
as delivered.
[See appropriate documents delivered at closing.]
A-2
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class 2-A-2 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-3
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-1 Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-4
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-2 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-5
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-3 Certificates
as delivered.
[See appropriate documents delivered at
closing.]
A-6
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-4 Certificate
as delivered.
[See appropriate documents delivered at closing]
A=7
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-5 Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-8
Exhibit X-0
Xxxxxxx X-0 is a photocopy
of the Class M-6 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-9
Exhibit X-00
Xxxxxxx X-00 is a photocopy
of the Class B Certificate
as delivered.
[See appropriate documents delivered at closing]
A-10
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 August 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-BC4
-----------------------------------------------------
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 August 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-BC4
-----------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) the Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to the
Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related
Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage[, and in the case of each
Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting thereon the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which
such Mortgage has been recorded;
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-BC4, CWABS, Inc., by
The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement dated as of
August 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 August 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-BC4
-----------------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement. The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Trustee has received:
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-BC4, CWABS, Inc., by The Bank of New York, a
New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of August 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 August 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-BC4
--------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) the
Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, and in the case of each Mortgage Loan that
is a MERS Mortgage Loan, the original Mortgage, noting thereon the presence of
the MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a
MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;
(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-BC4, 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 August 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 August 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, The Bank of New York, as Trustee and BNY Western Trust Company,
as Co-trustee. Capitalized terms used, but not defined herein or in Exhibit 1
hereto, shall have the meanings ascribed to such terms in the Agreement. The
transferee has authorized the undersigned to make this affidavit on behalf of
the transferee.
2. Either (a) the transferee is not an employee benefit plan that is
subject to Section 406 of ERISA or to section 4975 of the Internal Revenue Code
of 1986, nor is it acting on behalf of or with plan assets of any such plan, or
(b) the transferee has provided the opinion of counsel specified in Section
5.02(b) of the Agreement. The transferee is, as of the date hereof, and will be,
as of the date of the Transfer, a Permitted Transferee. The transferee is
acquiring its Ownership Interest in the Certificate for its own account.
3. The transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent transferee furnished to such Person an affidavit that
such subsequent transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a
I-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
5. The transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the transferee contemplated hereby null and void.
6. The transferee agrees to require a Transfer Affidavit from any
Person to whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I to the Agreement (a "Transferor Certificate") to the
effect that such transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class
A-R Certificates.
8. The transferee's taxpayer identification number is
__________________.
9. The transferee is a U.S. Person as defined in Code section
7701(a)(30).
10. The transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
11. The transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this __th day of _______, 20__.
[NAME OF TRANSFEREE]
By:________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_________________________
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _____________________ of the transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
transferee.
Subscribed and sworn before me this __th day of _______, 20__.
_____________________________________
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-3
EXHIBIT 1
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
I-4
Section 5.02(C) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership Interest
in a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, in addition to the representation letters required to be
delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached
hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class A-R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Class A-R Certificate and (C) not to Transfer its Ownership Interest
in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and
I-5
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-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS A-R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed
Certificates, Series 2003-BC4
-----------------------------
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 August 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-BC4, 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 August 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-BC4, 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 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
K-1
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 August 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-BC4, 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 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
L-1
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 August 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-BC4, 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 August 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, and the
Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum
of $________, made by __________________, payable to, or endorsed to
the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
M-1
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's
Office of the County of __________, State of _______________ in
book/reel/docket _______________ of official records at page/image
_____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trust Fund, solely for
the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit
the Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Master Servicer assert or seek to assert any claims or
rights of setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the 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-BC4
__________________________________________ 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
[Provide Upon Request]
P-1
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
FORM OF CAP CONTRACT
DATE: July 17, 2003
TO: Countrywide Home Loans, Inc.
ATTENTION: Xx. Xxxx Xxxxx/Xxxxx Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: FXNCC5326
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear Xxxxxxx Financial Products Inc. ("BSFP") and
Countrywide Home Loans, Inc., ("Counterparty"). This Agreement, which evidences
a complete and binding agreement between you and us to enter into the
Transaction on the terms set forth below, constitutes a "Confirmation" as
referred to in the "ISDA Form Master Agreement" (as defined below), as well as a
"Schedule" as referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to the 2000 ISDA DEFINITIONS (the "Definitions"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement shall be deemed to have been executed by you and us on the date we
entered into the Transaction. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the ISDA Form Master
Agreement, this Agreement shall prevail for purposes of the Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap
Notional Amount: Shall equal;
R-1
(i) USD 84,004,168 for the initial Calculation Period, and
(ii) the amount as detailed in the Schedule of Notional Amounts
attached hereto.
Trade Date: July 16, 2003
Effective Date: August 28, 2003
Termination Date: [________________], subject to
adjustment in accordance with the
Business Day Convention.
FIXED AMOUNT (PREMIUM):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: July 21, 2003
Fixed Amount: USD 220,000
FLOATING AMOUNTS:
Floating Rate Payer: BSFP
Cap Rate: 6.22000%
Floating Rate Payer
Period End Dates: The 25th calendar day of
each month during the Term of this
Transaction, commencing
[________________] and ending on the
Termination Date, subject to
adjustment in accordance with the
Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable.
The Floating Rate Payer Payment Date
shall be one Business Day preceding
each Floating Rate Payer Period End
Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Floating Rate Day
Count Fraction: Actual/360
R-2
Reset Dates: The first day of each Calculation
Period
Compounding: Inapplicable
Business Days: New York and London
Business Day Convention: Modified Following
Calculation Agent: BSFP
3. Additional Provisions: 1) Each party hereto is hereby
advised and acknowledges that the
other party has engaged in (or
refrained from engaging in)
substantial financial transactions
and has taken (or refrained from
taking) other material actions in
reliance upon the entry by the
parties into the Transaction being
entered into on the terms and
conditions set forth herein and in
the Confirmation relating to such
Transaction, as applicable. This
paragraph (1) shall be deemed
repeated on the trade date of each
Transaction.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
Master Agreement will apply to any Transaction.
2) TERMINATION PROVISIONS. For purposes of the Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) shall not apply to BSFP or
Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP
or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to BSFP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
R-3
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
3) Tax Representations. Not applicable
4) LIMITATION ON EVENTS OF DEFAULT. Notwithstanding the terms of Sections 5 and
6 of this Agreement, if at any time and so long as the Counterparty has
satisfied in full all its payment obligations under Section 2(a)(i) of this
Agreement and has at the time no future payment obligations, whether absolute or
contingent, under such Section, then unless BSFP is required pursuant to
appropriate proceedings to return to the Counterparty or otherwise returns to
the Counterparty upon demand of the Counterparty any portion of any such
payment, (a) the occurrence of an event described in Section 5(a) of this
Agreement with respect to the Counterparty shall not constitute an Event of
Default or Potential Event of Default with respect to the Counterparty as
Defaulting Party and (b) BSFP shall be entitled to designate an Early
Termination Date pursuant to Section 6 of this Agreement only as a result of the
occurrence of a Termination Event set forth in either Section 5(b)(i) or
5(b)(ii) of this Agreement with respect to BSFP as the Affected Party or Section
5(b)(iii) with respect to BSFP as the Burdened Party.
5) DOCUMENTS TO BE DELIVERED. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
PARTY REQUIRED TO DELIVER DOCUMENT FORM/DOCUMENT/ DATE BY WHICH TO
CERTIFICATE BE DELIVERED
BSFP and Any document required or Promptly after the earlier
the Counterparty reasonably requested to allow of (i) reasonable demand by
the other party to make payments either party or (ii)
under this Agreement without any learning that such form or
deduction or withholding for or document is required
on the account of any Tax or
with such deduction or
withholding at a reduced rate
(2) Other documents to be delivered are:
R-4
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO COVERED BY SECTION 3(D) REPRESENTATION
DELIVER DOCUMENT CERTIFICATE BE DELIVERED
BSFP and Any documents required by Upon the execution and Yes
the Counterparty the receiving party to delivery of this Agreement
evidence the authority of and such Confirmation
the delivering party or its
Credit Support Provider, if
any, for it to execute and
deliver this Agreement, any
Confirmation , and any
Credit Support Documents to
which it is a party, and to
evidence the authority of
the delivering party or its
Credit Support Provider to
perform its obligations
under this Agreement, such
Confirmation and/or Credit
Support Document, as the
case may be
BSFP and A certificate of an Upon the execution and Yes
the Counterparty authorized officer of the delivery of this Agreement
party, as to the incumbency and such Confirmation
and authority of the
respective officers of the
party signing this Agreement,
any relevant Credit Support
Document, or any
Confirmation, as the case may
be
6) MISCELLANEOUS. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to BSFP:
R-5
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000
Attention: DPC Manager - Suite 2700
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx
Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to the Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement; neither BSFP nor the Counterparty have any Offices other
than as set forth in the Notices Section and BSFP agrees that, for
purposes of Section 6(b) of this Agreement, it shall not in future have
any Office other than one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
BSFP is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP.
R-6
(f) Credit Support Document. Not applicable for either BSFP or the
Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law
of the State of New York shall govern their rights and duties in whole.
(i) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(k) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document. (l) BSFP will not unreasonably withhold or delay its consent
to an assignment of this Agreement to any other third party.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, PROVIDED that BSFP shall not be deemed to have any Affiliates
for purposes of this Agreement, including for purposes of Section 6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
R-7
"(g) RELATIONSHIP BETWEEN PARTIES.
Each party represents to the other party on each date
when it enters into a Transaction that:--
(1) NONRELIANCE. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written or
oral), other than the representations expressly made in this Agreement or the
Confirmation in respect of that Transaction.
(2) EVALUATION AND UNDERSTANDING.
(i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and has made its own decision
to enter into the Transaction; and
(ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and conditions and to
assume those risks, financially and otherwise.
(3) PURPOSE. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.
PRINCIPAL. It is entering into the Transaction as principal, and not as agent or
in any other capacity, fiduciary or otherwise.
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR
AFFILIATE OF THE BEAR XXXXXXX COMPANIES INC. OTHER THAN BSFP IS AN
OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: PAYMENTS TO BSFP:
Citibank, N.A., New York
ABA Number: 000-0000-00, for the
account of Bear, Xxxxxxx Securities
Corp.
Account Number: 0925-3186, for
further credit to Bear Xxxxxxx
Financial Products Inc.
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
PAYMENTS TO COUNTERPARTY:
Please provide
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This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions, please
contact XXXXX XXXXXX by telephone at 000-000-0000. For all other inquiries
please contact ORLAITH O'DEA by telephone at 000-0-000-0000 Originals will be
provided for your execution upon your request.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: _______________________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By: _______________________________
As authorized agent or officer for Countrywide Home Loans, Inc.
Name:
Title:
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SCHEDULE OF NOTIONAL AMOUNTS
(all such dates subject to adjustment in accordance
with the Business Day Convention)
FROM AND INCLUDING TO BUT EXCLUDING APPLICABLE NOTIONAL AMOUNT
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Termination Date
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EXECUTION COPY
EXHIBIT S
FORM OF CAP CONTRACT ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of _______________ ("Assignment
Agreement"), among ____________________________ ("Assignor"),
____________________, not in an individual capacity but as Trustee for CWABS,
Inc. Asset-Backed Certificates, Series 2003-BC4 ("Assignee"), pursuant to a
Pooling and Servicing Agreement dated as of August 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,
BNY Western Trust Company, as co-trustee and Bear Xxxxxxx Financial Products
Inc. ("Remaining Party").
W I T N E S S E T H:
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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 _____________ 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 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.
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2. RELEASE. Effective as of and from the Effective Date, Remaining
Party hereby releases Assignor from all duties and obligations owed under and in
respect of the Assigned Transaction, and upon the assumption by Assignee,
Assignor shall have no rights under and in respect of the Assigned Transaction
or the Remaining Party.
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)
_____________________________ 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 ____ (or any person acting as
successor trustee under the Pooling and Servicing Agreement) be personally
liable for or on account of any of the statements, representations, warranties,
covenants or obligations stated to be those of Assignor under the terms of the
Assigned Transaction, all such liability, if any, being expressly waived by
Assignor and Remaining Party and any person claiming by, through or under either
such party.
4. CONSENT AND ACKNOWLEDGMENT OF REMAINING PARTY. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of all
the rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement. In addition, Remaining Party hereby
acknowledges that the responsibilities of Assignee under the Assigned
Transaction will be performed on its behalf by Countrywide Home Loans Servicing
LP, as master servicer under the Pooling and Servicing Agreement.
5. REPRESENTATIONS. Each party hereby represents and warrants to the
other parties as follows:
(a) It is duly organized, validly existing and in good standing under
the laws of its organization or incorporation;
(b) It has the power to execute and deliver this Assignment Agreement;
and
(c) Its obligations under this Assignment Agreement constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms.
Each of Assignor and Remaining Party represents that no event or
condition has occurred that constitutes an Event of Default, a Potential Event
of Default or, to the party's knowledge, a Termination Event (as such terms are
defined in the Confirmation and Agreement), with respect to the party, and no
such event would occur as a result of the party's entering into or performing
its obligations under this Assignment Agreement.
6. INDEMNITY. Each of Assignor and Remaining Party hereby agrees to
indemnify and hold harmless Assignee with respect to any and all claims arising
under the Assigned Transaction prior to the Effective Date. Each of Assignee
(subject to the limitations set forth in paragraph 3 above) and Remaining Party
hereby agrees to indemnify and hold harmless Assignor with respect to any and
all claims arising under the Assigned Transaction on or after the Effective
Date.
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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, ___________________________________
_____________________________________________________________________________,
or such other address as may be hereafter furnished in writing to Assignee and
Remaining Party; (ii) in the case of Assignee, _________________________________
_____________________________________________________________________________,
or such other address as may be hereafter furnished in writing to Assignor and
Remaining Party; and (iii) in the case of Remaining Party, _____________________
______________________________________________________________________________,
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:
____________________
____________________
ABA # ______________
GLA # ______________
For Further Credit: ______________
Attn: ______________
____________________
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.
11. AMENDMENTS TO CONFIRMATION AND AGREEMENT
(a) Section 2 of the Confirmation and Agreement is amended by adding at
the end thereof the following subsection:
"(h) Substitution Event. If at any time the unsecured, unsubordinated long-term
obligations, or equivalent, of BSFP, shall be rated A+ or below by S&P or A1 or
below by Moody's, and within ten (10) business days following the issuance of
such a rating, BSFP, using its good faith efforts, fails to find a person
acceptable to the Counterparty, which acceptance shall not be unreasonably
withheld, to whom all of BSFP's interests and obligations under this Agreement
shall be assigned at no cost to the Counterparty, and following which BSFP shall
be released from all further obligations under this
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Agreement, then, at the option of the Counterparty, such failure shall
constitute an Additional Termination Event with BSFP as the Affected Party."
(b) Section 6 of the Confirmation and Agreement is amended by adding at
the end thereof the following subsections:
"(m) Non-Petition. BSFP hereby irrevocably and unconditionally agrees that it
will not institute against, or join any other person in instituting against, the
Assignee, any bankruptcy, reorganization, arrangement, insolvency, or similar
proceeding under the laws of the United States, the Cayman Islands or any other
jurisdiction for the non-payment of any amount due hereunder or any other reason
until the payment in full of the Notes (as defined in the Indenture) and the
expiration of a period of one year plus ten days (or, if longer, the applicable
preference period) following such payment.
(n) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and 6 of the
ISDA Form Master Agreement, the provisions of Sections 5(a)(ii), 5(a)(iii) and
5(a)(iv) shall not apply to BSFP or the Counterparty.
(o) AMENDMENT; CONSENT. Section 9(b) of the ISDA Form Master Agreement is
amended modified by adding the following at the end of such Section:
No amendment, modification or waiver in respect of this Master Agreement will be
effective unless the Rating Agency Condition, as defined below, is satisfied .
(p) NO SET-OFF. Notwithstanding any provision of this Agreement or any other
existing or future agreement, each party irrevocably waives any and all rights
it may have to set off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between it and the other
party hereunder against any obligation between it and the other party under any
other agreements. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction.
(q) ADDITIONAL DEFINITIONAL PROVISIONS.
As used in this Agreement, the following terms shall have the meanings set forth
below, unless the context clearly requires otherwise:
"Fitch" means, Fitch Ratings, or any successor thereto.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder that the party acting or
failing to act having consulted with any of the Rating Agencies then
providing a rating of the Relevant Certificates and having received
from the Rating Agencies, a written confirmation that the proposed
action or inaction would not cause a downgrading or withdrawal of the
then-current rating of the Relevant Certificates.
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"Moody's" means Xxxxx'x Investors Services, Inc., or any successor
thereto.
"Rating Agencies" means each of Fitch and Moody's.
"Relevant Certificates" means the _______________ Certificates (as
defined in the Pooling and Servicing Agreement).
(c) Section 8 of the Confirmation and Agreement is amended by adding
"(4)" before "Principal." and by adding at the end thereof the following
subsection:
(5) ELIGIBLE CONTRACT PARTICIPANT. Each party constitutes an "eligible
contract participant" as such term is defined in Section 1(a)12 of the Commodity
Exchange Act, as amended."
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement as of the date first above written.
[PARTY]
By:___________________________
Name:
Title:
[PARTY]
By:___________________________
Name:
Title:
[PARTY]
By:___________________________
Name:
Title:
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EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2003-BC4
[Date]
Via Facsimile
The Bank of New York,
as Trustee
000 Xxxxxxx Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement,
dated as of August 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. Capitalized terms used herein shall have
the meanings ascribed to such terms in the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Distribution Date in _________ 20[ ] and
each Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received
during the related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage
Note with respect to such Principal Prepayment was or was not, as indicated on
the attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule
for which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
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(i) the Master Servicer's determination that such
waiver would maximize recovery of Liquidation Proceeds for such
Mortgage Loan, taking into account the value of such Prepayment Charge,
or
(ii)(A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
and
4. We certify that all amounts due in connection with the
waiver of a Prepayment Charge inconsistent with clause 3 above which are
required to be deposited by the Servicer pursuant to Section 3.20 of the Pooling
and Servicing Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:_________________________________
Name:
Title:
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS
RECEIVED DURING THE RELATED PREPAYMENT PERIOD
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LOAN NUMBER CLAUSE 2: YES/NO CLAUSE 3: (I) OR (II)
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