CWABS ASSET-BACKED CERTIFICATES TRUST 2004-BC4,
Issuer
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2004
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ASSET-BACKED CERTIFICATES, SERIES 2004-BC4
Table of Contents
ARTICLE I
DEFINITIONS.......................................................................................................3
Section 1.01 Defined Terms.......................................................................3
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.....................................................56
Section 2.01 Conveyance of Mortgage Loans.......................................................56
Section 2.02 Acceptance of the Mortgage Loans...................................................60
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the
Seller.............................................................................62
Section 2.04 Representations and Warranties of the Depositor....................................74
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases........................................................................76
Section 2.06 Authentication and Delivery of Certificates........................................76
Section 2.07 Covenants of the Master Servicer...................................................76
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...................................................................78
Section 3.01 Master Servicer to Service Mortgage Loans..........................................78
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer....................79
Section 3.03 Rights of the Depositor, the Seller and the Trustee in Respect of the
Master Servicer....................................................................80
Section 3.04 Trustee to Act as Master Servicer..................................................80
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..............................................................................84
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
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds
and Realized Losses; Repurchase of Certain Mortgage Loans..........................88
Section 3.13 Trustee to Cooperate; Release of Mortgage Files....................................91
Section 3.14 Documents, Records and Funds in Possession of 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..................................................93
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Section 3.18 Annual Independent Public Accountants' Servicing Statement; Financial
Statements.........................................................................94
Section 3.19 The Corridor 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..........................................105
Section 4.06 [Reserved]........................................................................108
Section 4.07 [Reserved]........................................................................108
Section 4.08 Carryover Reserve Fund............................................................108
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 The Class P Certificates..........................................................112
ARTICLE V
THE CERTIFICATES................................................................................................113
Section 5.01 The Certificates..................................................................113
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates.......114
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.................................117
Section 5.04 Persons Deemed Owners.............................................................118
Section 5.05 Access to List of Certificateholders' Names and Addresses.........................118
Section 5.06 Book-Entry Certificates...........................................................118
Section 5.07 Notices to Depository.............................................................119
Section 5.08 Definitive Certificates...........................................................119
Section 5.09 Maintenance of Office or Agency...................................................120
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER...............................................................121
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Seller.......121
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Seller.......121
Section 6.03 Limitation on Liability of the Depositor, the Seller, the Master Servicer
and Others........................................................................121
Section 6.04 Limitation on Resignation of Master Servicer......................................122
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds....................................122
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ARTICLE VII
DEFAULT; TERMINATION OF MASTER SERVICER.........................................................................123
Section 7.01 Events of Default.................................................................123
Section 7.02 Trustee to Act; Appointment of Successor..........................................124
Section 7.03 Notification to Certificateholders................................................126
ARTICLE VIII
CONCERNING THE TRUSTEE..........................................................................................127
Section 8.01 Duties of Trustee.................................................................127
Section 8.02 Certain Matters Affecting the Trustee.............................................128
Section 8.03 Trustee Not Liable for Mortgage Loans.............................................129
Section 8.04 Trustee May Own Certificates......................................................129
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses................................129
Section 8.06 Eligibility Requirements for Trustee..............................................130
Section 8.07 Resignation and Removal of Trustee................................................130
Section 8.08 Successor Trustee.................................................................131
Section 8.09 Merger or Consolidation of Trustee................................................131
Section 8.10 Appointment of Co-Trustee or Separate Trustee.....................................132
Section 8.11 Tax Matters.......................................................................133
ARTICLE IX
TERMINATION.....................................................................................................136
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..................136
Section 9.02 Final Distribution on the Certificates............................................136
Section 9.03 Additional Termination Requirements...............................................138
ARTICLE X
MISCELLANEOUS PROVISIONS........................................................................................139
Section 10.01 Amendment.........................................................................139
Section 10.02 Recordation of Agreement; Counterparts............................................140
Section 10.03 Governing Law.....................................................................140
Section 10.04 Intention of Parties..............................................................141
Section 10.05 Notices...........................................................................141
Section 10.06 Severability of Provisions........................................................142
Section 10.07 Assignment........................................................................142
Section 10.08 Limitation on Rights of Certificateholders........................................142
Section 10.09 Inspection and Audit Rights.......................................................143
Section 10.10 Certificates Nonassessable and Fully Paid.........................................143
EXHIBITS
EXHIBIT A-1....... Form of Class 1-A Certificate
EXHIBIT A-2....... Form of Class 2-A Certificate
EXHIBIT A-3....... Form of Class M-1 Certificate
EXHIBIT A-4....... Form of Class M-2 Certificate
EXHIBIT A-5 Form of Class M-3 Certificate
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EXHIBIT A-6 Form of Class M-4 Certificate
EXHIBIT A-7 Form of Class M-5 Certificate
EXHIBIT A-8 Form of Class M-6 Certificate
EXHIBIT A-9 Form of Class M-7 Certificate
EXHIBIT A-10 Form of Class M-8 Certificate
EXHIBIT A-11 Form of Class B Certificate
EXHIBIT B Form of Class C Certificate
EXHIBIT C Form of Class P Certificate
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedules
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the Trustee
on or prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 [Reserved]
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit
EXHIBIT J-1 Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Request for Release (for Trustee)
EXHIBIT N Request for Release (for Mortgage Loans Paid in Full, Repurchased or Replaced)
EXHIBIT O Copy of Depositary Agreement
EXHIBIT P Form of Mortgage Note and Mortgage
EXHIBIT Q [reserved]
EXHIBIT R Form of Corridor Contract
EXHIBIT S Form of Corridor Contract Novation Agreement
EXHIBIT T Officer's Certificate with Respect to Prepayments
EXHIBIT U Standard & Poor's Predatory Lending Categorization
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POOLING AND SERVICING AGREEMENT, dated as of October 1, 2004, by and
among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (the "Seller"),
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership, as master
servicer (the "Master Servicer"), and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
twelve classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein).
REMIC I
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Corridor Contracts and the Carryover Reserve
Fund) subject to this Agreement as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC I." The Class R-I Interest will represent the sole
class of "residual interests" in REMIC I for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC I Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC I (the "REMIC I Regular Interests").
The "latest possible maturity date" (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I
Regular Interest shall be the 360th Distribution Date. None of the REMIC I
Regular Interests will be certificated.
Uncertificated REMIC I Uncertificated Principal Latest Possible Maturity
Designation Pass-Through Rate Balance Date
----------- ----------------- ------- ----
LT-AA (1) $
LT-1A1 (1) $
LT-1A2 (1) $
LT-2A1 (1) $
LT-2A2 (1) $
LT-2A3 (1) $
LT-M1 (1) $
LT-M2 (1) $
LT-M3 (1) $
LT-M4 (1) $
LT-M5 (1) $
LT-M6 (1) $
LT-M7 (1) $
LT-M8 (1) $
1
LT-B (1) $
LT-ZZ (1) $
LT-P (1) $100.00
LT-R (1) $100.00
LT-1SUB (1) $
LT-1GRP (1) $
LT-2SUB (1) $
LT-2GRP (1) $
LT-XX (1) $
(1) Calculated as provided in the definition of Uncertificated REMIC I Pass-
Through Rate.
REMIC II
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC I Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
REMIC II. The Class R-II Interest will represent the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions under federal income
tax law. The following table irrevocably sets forth the designation,
Pass-Through Rate, aggregate Initial Certificate Principal Balance and Final
Scheduled Distribution Date for each Class of Certificates comprising the
interests representing "regular interests" in REMIC II. The "latest possible
maturity date" (determined solely for purposes of satisfying Treasury Regulation
Section 1.860G-1(a)(4)(iii)) for each Class of REMIC II Regular Certificates
shall be the 360th Distribution Date.
Aggregate Initial Certificate Final Scheduled
Designation Pass-Through Rate Principal Balance Distribution Date
Class 1-A-1 (1) $564,755,000.00 January 2035
Class 1-A-2 (1) $ 56,475,000.00 January 2035
Class 2-A-1 (1) $ 73,107,000.00 July 2021
Class 2-A-2 (1) $113,646,000.00 October 2032
Class 2-A-3 (1) $ 31,517,000.00 January 2035
Class M-1 (1) $ 45,500,000.00 November 2034
Class M-2 (1) $ 22,500,000.00 October 2034
Class M-3 (1) $ 11,500,000.00 September 2034
Class M-4 (1) $ 12,000,000.00 September 2034
Class M-5 (1) $ 11,500,000.00 August 2034
Class M-6 (1) $ 10,000,000.00 July 2034
Class M-7 (1) $ 12,500,000.00 May 2034
Class M-8 (1) $ 7,500,000.00 March 2034
Class B (1) $ 7,500,000.00 December 2033
Class C (2) $0.00 November 2034
2
Class P (3) $ 100.00 November 2034
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(1) Interest will accrue at a rate equal to the Pass-Through Rate, as
defined herein.
(2) The Class C Certificates will accrue interest at its variable
Pass-Through Rate on the Notional Amount of the Class C Certificates
outstanding from time to time which shall equal the Uncertificated
Principal Balance of the REMIC I Regular Interests (other than REMIC I
Regular Interest LT-P and REMIC I Regular Interest LT-R). The Class C
Certificates will not accrue interest on its 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 from and including the immediately preceding Distribution Date (or, in
the case of the first Distribution Date, from and including the Closing Date)
and to and including the day immediately preceding the current Distribution
Date. With respect to any Distribution Date and the Class C Certificates, the
calendar month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Certificates (other than the Class A-R, Class P
and Class C Certificates) will be made on the basis of the actual number of days
elapsed in the related Accrual Period and on a 360-day year. All calculations of
interest on the Class C Certificates will be made on the basis of a 360-day year
consisting of twelve 30-day months. The Class A-R Certificates and Class P
Certificates will not accrue any interest and therefore have no Accrual Period.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable for the
life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
less the Expense Fee Rate.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
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 (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
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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.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date on account of (i) all Scheduled Payments or portions
thereof received in respect of the Mortgage Loans due after the related Due Date
and (ii) Principal Prepayments and Liquidation Proceeds received in respect of
such Mortgage Loans after the last day of the related Prepayment Period or Due
Period, respectively.
Applied Realized Loss Amount: With respect to any Distribution Date,
the sum of the Realized Losses with respect to the Mortgage Loans which shall
equal the amount, if any, by which, Certificate Principal Balance of all
Certificates (after all distributions of principal on such Distribution Date)
exceeds the Stated Principal Balance of the Mortgage Loans for such Distribution
Date, and which are to be applied as provided in Section 4.04 of this Agreement.
Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made for the Seller by a fee appraiser at the time of the
origination of the related Mortgage Loan, or the sales price of the Mortgaged
Property at the time of such origination, whichever is less, or with respect to
any Mortgage Loan originated in connection with a refinancing, the appraised
value of the Mortgaged Property based upon the appraisal made at the time of
such refinancing.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Class A Certificates and Subordinate Certificates
constitutes a Class of Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the State of California, 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.
4
Calendar Quarter: A Calendar Quarter shall consist of one of the
following time periods in any given year: January 1 through March 31, April 1
through June 30, July 1 though September 30, and October 1 through December 31.
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 2004-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-11, 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 Servicing LP in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-BC4". Funds in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Certificate Account Deposit: An amount equal to the aggregate of all
amounts in respect of (i) principal of the Mortgage Loans due on or after the
Cut-off Date and received by the Master Servicer before the Closing Date and not
applied in computing the Cut-off Date Principal Balance thereof, and (ii)
interest on the Mortgage Loans due on and after the Cut-off Date and received by
the Master Servicer before the Closing Date.
Certificate 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 and the Class 1-A-2
Certificates any Applied Realized Loss Amounts allocated to such Certificate on
previous Distribution Dates pursuant to Section 4.04; provided that first, the
Certificate Principal Balance of the Class 1-A-2 Certificates and second, the
Class of Subordinate Certificates with the highest payment priority to which
Realized Losses have been allocated will be increased by the amount of any
Subsequent Recoveries on the Mortgage Loans not previously allocated, but not by
more than the amount of Realized Losses previously allocated to reduce the
Certificate Principal Balance of that Class. As to any Class C Certificate and
as of any Distribution Date, an amount equal to the excess, if any, of (i) the
aggregate Stated Principal Balance of the Mortgage Loans over (ii) the aggregate
Certificate Principal Balance of the Offered Certificates. References herein to
the Certificate
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Principal Balance of a Class of Certificates shall mean the Certificate
Principal Balances of all Certificates in such Class.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof (other
than the second sentence of Section 10.01 hereof) that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
Class A Principal Distribution Target Amount: For any Distribution
Date, the excess of (i) the aggregate Certificate Principal Balance of the Class
1-A Certificates and Class 2-A Certificates immediately prior to such
Distribution Date, over (ii) the lesser of (x) 67.90% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided however, that if the aggregate Certificate
Principal Balance of the Subordinated Certificates has been reduced to zero, the
Class A Principal Distribution Target Amount shall equal the sum of the Class
1-A and Class 2-A Principal Distribution Target Amounts.
Class 1-A Corridor Contract: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Class 1-A Certificateholders
(as assigned to the Trustee pursuant to the Class 1-A Corridor Contract Novation
Agreement), a form of which is attached hereto as Exhibit R.
Class 1-A Corridor Contract Novation Agreement: The Novation Agreement
regarding the Class 1-A Corridor Contract dated as of the Closing Date among the
Seller, the Trustee and the Corridor Contract Counterparty, which is attached
hereto as Exhibit S.
Class 1-A Corridor Contract Payment Amount: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Class 1-A Corridor Contract.
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Class 1-A Corridor Contract Termination Date: The Distribution Date in
November 2011.
Class 1-A Confirmation and Agreement: The Confirmation and Agreement
dated October 13, 2004, reference number ▇▇▇▇▇▇▇▇▇, evidencing the Class 1-A
Corridor Contract.
Class 1-A Certificate: Any Certificate designated as a "Class 1-A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class 1-A-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 1-A-1
Certificates.
Class 1-A-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 1-A-2
Certificates.
Class 1-A-1 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 1-A-1 Pass-Through Rate
on the Class 1-A-1 Certificate Principal Balance immediately prior to such
Distribution Date.
Class 1-A-2 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 1-A-2 Pass-Through Rate
on the Class 1-A-2 Certificate Principal Balance immediately prior to such
Distribution Date.
Class 1-A-1 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class 1-A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 1-A-1
Certificates with respect to interest on such prior Distribution Dates.
Class ▇-▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: For any Distribution Date,
the excess of (a) the Class 1-A-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 1-A-2
Certificates with respect to interest on such prior Distribution Dates.
Class 1-A-1 Interest Carryover Amount: For any Distribution Date and
the Class 1-A-1 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 1-A-1 Certificates would otherwise have accrued for such
Distribution Date had the Class 1-A-1 Pass-Through Rate thereon been calculated
as the sum of One-Month LIBOR and the applicable Class 1-A-1 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class 1-A-1
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
1-A-1 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class 1-A-1 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class 1-A-2 Interest Carryover Amount: For any Distribution Date and
the Class 1-A-2 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 1-A-2 Certificates would otherwise have accrued for such
Distribution Date had the Class 1-A-2 Pass-Through Rate thereon been calculated
as the sum of One-Month LIBOR and the applicable Class 1-A-2 Margin
7
for such Distribution Date, over (ii) the amount of interest accrued on the
Class 1-A-2 Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class 1-A-2 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class 1-A-2 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class 1-A-1 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.350% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.700% per
annum.
Class 1-A-2 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.420% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.840% per
annum.
Class 1-A-1 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 1-A-1 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
Class 1-A-2 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 1-A-2 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
Class 1-A Principal Distribution Amount: For any Distribution Date, the
product of (a) the Class A Principal Distribution Target Amount and (b) a
fraction, the numerator of which is the Class 1-A Principal Distribution Target
Amount and the denominator of which is the sum of the Class 1-A Principal
Distribution Target Amount and Class 2-A Principal Distribution Target Amount.
Class 1-A Principal Distribution Target Amount: For any Distribution
Date, the excess of:
(i) the aggregate Certificate Principal Balance of the Class
1-A-1 Certificates and Class 1-A-2 Certificates immediately prior to
such Distribution Date, over
(ii) the lesser of (x) 67.90% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date after giving effect to distributions to be made on
that Distribution Date and (y) the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 1 for such Distribution Date after
giving effect to distributions to be made on that Distribution Date
minus 0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 1 as of the Cut-off Date.
Class 2-A Corridor Contract: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Class 2-A Certificateholders
(as assigned to the Trustee pursuant to the Class 2-A Corridor Contract Novation
Agreement), a form of which is attached hereto as Exhibit S.
Class 2-A Corridor Contract Novation Agreement: The Novation Agreement
regarding the Class 2-A Corridor Contract dated as of the Closing Date among the
Seller, the Trustee and the Corridor Contract Counterparty, which is attached
hereto as Exhibit S.
8
Class 2-A Corridor Contract Payment Amount: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Class 2-A Corridor Contract.
Class 2-A Corridor Contract Termination Date: The Distribution Date in
November 2011.
Class 2-A Confirmation and Agreement: The Confirmation and Agreement
dated October 13, 2004, reference number FXNEC6367, evidencing the Class 2-A
Corridor Contract.
Class 2-A-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-1
Certificates.
Class 2-A-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-2
Certificates.
Class 2-A-3 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-3
Certificates.
Class 2-A-1 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-1 Pass-Through Rate
on the Class 2-A-1 Certificate Principal Balance immediately prior to such
Distribution Date.
Class 2-A-2 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-2 Pass-Through Rate
on the Class 2-A-2 Certificate Principal Balance immediately prior to such
Distribution Date.
Class 2-A-3 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-3 Pass-Through Rate
on the Class 2-A-3 Certificate Principal Balance immediately prior to such
Distribution Date.
Class 2-A-1 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class 2-A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-1
Certificates with respect to interest on such prior Distribution Dates.
Class ▇-▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: For any Distribution Date,
the excess of (a) the Class 2-A-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-2
Certificates with respect to interest on such prior Distribution Dates.
Class ▇-▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: For any Distribution Date,
the excess of (a) the Class 2-A-3 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-3
Certificates with respect to interest on such prior Distribution Dates.
Class 2-A-1 Interest Carryover Amount: For any Distribution Date and
the Class 2-A-1 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 2-A-1 Certificates would otherwise have accrued for such
Distribution Date had the Class 2-A-1 Pass-Through Rate
9
thereon been calculated as the sum of One-Month LIBOR and the applicable Class
2-A-1 Margin for such Distribution Date, over (ii) the amount of interest
accrued on the Class 2-A-1 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class 2-A-1 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class 2-A-1 Pass-Through Rate (without
giving effect to the Net Rate Cap).
Class 2-A-2 Interest Carryover Amount: For any Distribution Date and
the Class 2-A-2 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 2-A-2 Certificates would otherwise have accrued for such
Distribution Date had the Class 2-A-2 Pass-Through Rate thereon been calculated
as the sum of One-Month LIBOR and the applicable Class 2-A-2 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class 2-A-2
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
2-A-2 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class 2-A-2 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class 2-A-3 Interest Carryover Amount: For any Distribution Date and
the Class 2-A-3 Certificates, the sum of (A) the excess of (i) the amount of
interest the Class 2-A-3 Certificates would otherwise have accrued for such
Distribution Date had the Class 2-A-3 Pass-Through Rate thereon been calculated
as the sum of One-Month LIBOR and the applicable Class 2-A-3 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class 2-A-3
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
2-A-3 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class 2-A-3 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class 2-A-1 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.180% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.360% per
annum.
Class 2-A-2 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.370% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.740% per
annum.
Class 2-A-3 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.520% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.040% per
annum.
Class 2-A-1 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-1 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
Class 2-A-2 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-2 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
Class 2-A-3 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-3 Margin and (ii) the related Net Rate
Cap for such Distribution Date.
10
Class 2-A Principal Distribution Amount: For any Distribution Date, the
product of (a) the Class A Principal Distribution Target Amount and (b) a
fraction, the numerator of which is the Class 2-A Principal Distribution Target
Amount and the denominator of which is the sum of the Class 1-A Principal
Distribution Target Amount and Class 2-A Principal Distribution Target Amount.
Class 2-A Principal Distribution Target Amount: For any Distribution
Date, the excess of:
(i) the aggregate Certificate Principal Balance of the Class
2-A-1, Class 2-A-2 and Class 2-A-3 Certificates immediately prior to
such Distribution Date, over
(ii) the lesser of (x) 67.90% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 for such
Distribution Date after giving effect to distributions to be made on
that Distribution Date and (y) the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 2 for such Distribution Date after
giving effect to distributions to be made on that Distribution Date
minus 0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 as of the Cut-off Date.
Class A-R Certificate: Any one of the Class A-R Certificates executed
by the Trustee substantially in the form annexed hereto as Exhibit D, composed
of the Class R-I Interest and Class R-II Interest.
Class A-R Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-R Certificates.
Class A-R Principal Distribution Amount: With respect to any
Distribution Date, the excess, if any, of (A) $100 over (B) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04.
Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
Class B Certificate Principal Balance: As of any date of determination,
the Certificate Principal Balance of the Class B Certificates.
Class B Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class B Pass-Through Rate on
the Class B Certificate Principal Balance immediately prior to such Distribution
Date.
Class B Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class B Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class B Certificates with
respect to interest on such prior Distribution Dates.
Class B Interest Carryover Amount: For any Distribution Date and the
Class B Certificates, the sum of (A) the excess of (i) the amount of interest
the Class B Certificates would
11
otherwise have accrued for such Distribution Date had the Class B Pass-Through
Rate thereon been calculated as the sum of One-Month LIBOR and the applicable
Class B Margin for such Distribution Date, over (ii) the amount of interest
accrued on the Class B Certificates at the Net Rate Cap for such Distribution
Date and (B) the Class B Interest Carryover Amount for all previous Distribution
Dates not previously paid pursuant to Section 4.04, together with interest
thereon at the Class B Pass-Through Rate (without giving effect to the Net Rate
Cap).
Class B Margin: For the Accrual Period for any Distribution Date on or
prior to the Optional Termination Date, 3.000% per annum and, for any
Distribution Date after the Optional Termination Date, 4.500% per annum.
Class B Pass-Through Rate: For any Distribution Date, the lesser of (i)
One-Month LIBOR plus the Class B Margin and (ii) the related Net Rate Cap for
such Distribution Date.
Class B Principal Distribution Amount: With respect to any Distribution
Date, the excess of (i) the sum of: (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after taking into account distributions of
the Class 1-A Principal Distribution Amount and Class 2-A Principal Distribution
Amount for such Distribution Date), (B) the Class M-1 Certificate Principal
Balance (after taking into account distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal Balance (after taking into account distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class M-3
Certificate Principal Balance (after taking into account distribution of the
Class M-3 Principal Distribution Amount on such Distribution Date), (E) the
Class M-4 Certificate Principal Balance (after taking into account distribution
of the Class M-4 Principal Distribution Amount on such Distribution Date), (F)
the Class M-5 Certificate Principal Balance (after taking into account
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date); (G) the Class M-6 Certificate Principal Balance (after taking into
account distribution of the Class M-6 Principal Distribution Amount on such
Distribution Date); (H) the Class M-7 Certificate Principal Balance (after
taking into account distribution of the Class M-7 Principal Distribution Amount
on such Distribution Date); (I) the Class M-8 Certificate Principal Balance
(after taking into account distribution of the Class M-8 Principal Distribution
Amount on such Distribution Date) and (J) the Class B Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (x)
96.00% of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class B Principal Distribution Amount for such Distribution
Date will equal 100% of the Principal Distribution Amount for such Distribution
Date.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein, to be issued initially to
Countrywide Securities Holding Inc.
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.
12
Class C Notional Amount: The aggregate amount of the Uncertificated
Principal Balance of the REMIC I Regular Interests other than REMIC I Regular
Interest LT-P and REMIC I Regular Interest LT-R.
Class C Pass-Through Rate: A rate per annum equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A) through (P) below, and the denominator of
which is the Uncertificated Principal Balance of the REMIC I Regular Interests
(other than REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R).
For purposes of calculating the Pass Through Rate for the Class C Certificates,
the numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-AA;
(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-1A1;
(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-1A2;
(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-2A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-2A1;
(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-2A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-2A2;
(F) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-2A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-2A3;
(G) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M1;
(H) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M2;
(I) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M3;
13
(J) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M4;
(K) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M5;
(L) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M6;
(M) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M7 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M7;
(N) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-M8 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M8;
(O) 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
(P) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-ZZ.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date.
Class M-1 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-1 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-1 Certificates
with respect to interest.
Class M-1 Interest Carryover Amount: For any Distribution Date and the
Class M-1 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-1 Certificates would otherwise have accrued for such Distribution
Date had the Class M-1 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-1 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-1 Certificates
14
at the Net Rate Cap for such Distribution Date and (B) the Class M-1 Interest
Carryover Amount for all previous Distribution Dates not previously paid
pursuant to Section 4.04, together with interest thereon at the Class M-1
Pass-Through Rate (without giving effect to the Net Rate Cap).
Class M-1 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.700% per annum and, for the Accrual
Period 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 related Net Rate Cap
for such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amounts on such Distribution Date) and (B) the Class M-1
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (x) 77.00% of the Stated Principal Balances of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date minus the OC Floor; provided, however, that
after the Certificate Principal Balance of each other Class of Offered
Certificates is reduced to zero, the Class M-1 Principal Distribution Amount for
such Distribution Date will equal 100% of the Principal Distribution Amount for
such Distribution Date.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date.
Class M-2 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-2 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-2 Certificates
with respect to interest on such prior Distribution Dates.
Class M-2 Interest Carryover Amount: For any Distribution Date and the
Class M-2 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-2 Certificates would otherwise have accrued for such Distribution
Date had the Class M-2 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-2 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-2 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-2 Interest Carryover
Amount
15
for all previous Distribution Dates not previously paid pursuant to Section
4.04, together with interest thereon at the Class M-2 Pass-Through Rate (without
giving effect to the Net Rate Cap).
Class M-2 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.850% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.275% per
annum.
Class M-2 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-2 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the lesser of (x) 81.50% of the aggregate Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Certificate Principal Balance of each other
Class of Offered Certificate is reduced to zero, the Class M-2 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-3 Certificates.
Class M-3 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date.
Class M-3 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-3 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-3 Certificates
with respect to interest on such prior Distribution Dates.
Class M-3 Interest Carryover Amount: For any Distribution Date and the
Class M-3 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-3 Certificates would otherwise have accrued for such Distribution
Date had the Class M-3 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-3 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-3 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-3 Interest Carryover
Amount
16
for all previous Distribution Dates not previously paid pursuant to Section
4.04, together with interest thereon at the Class M-3 Pass-Through Rate (without
giving effect to the Net Rate Cap).
Class M-3 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.000% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.500% per
annum.
Class M-3 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-3 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date) and
(D) the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 83.80% of the aggregate Stated
Principal Balances of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Certificate Principal
Balance of each of the other Class of Offered Certificate is reduced to zero,
the Class M-3 Principal Distribution Amount for such Distribution Date will
equal 100% of the Principal Distribution Amount for such Distribution Date.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-4 Certificates.
Class M-4 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance immediately prior to such
Distribution Date.
Class M-4 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-4 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-4 Certificates
with respect to interest on such prior Distribution Dates.
Class M-4 Interest Carryover Amount: For any Distribution Date and the
Class M-4 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-4 Certificates would otherwise have accrued for such Distribution
Date had the Class M-4 Pass-through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-4 Margin
17
for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-4 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-4 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-4 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class M-4 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.300% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.950% per
annum.
Class M-4 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-4 Margin and (ii) the Net Rate Cap for such
Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (E) the Class M-4 Certificate Principal Balance immediately prior to
such Distribution Date over (ii) the lesser of (x) 86.20% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date after
giving effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Certificate Principal
Balance of each of the other Classes of Offered Certificates if reduced to zero,
the Class M-4 Principal Distribution Amount for such Distribution Date will
equal 100% of the Principal Distribution Amount for such Distribution Date.
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-5 Certificates.
Class M-5 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance immediately prior to such
Distribution Date.
Class M-5 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-5 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-5 Certificates
with respect to interest on such prior Distribution Dates.
18
Class M-5 Interest Carryover Amount: For any Distribution Date and the
Class M-5 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-5 Certificates would otherwise have accrued for such Distribution
Date had the Class M-5 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-5 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-5 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-5 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-5 Pass-Through Rate
(without giving effect to the Net Rate Cap).
Class M-5 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.400% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 2.100% per
annum.
Class M-5 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-5 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (F) the Class M-5 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 88.50%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-5 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-6 Certificates.
Class M-6 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance immediately prior to such
Distribution Date.
19
Class M-6 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-6 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-6 Certificates
with respect to interest on such prior Distribution Dates.
Class M-6 Interest Carryover Amount: For any Distribution Date and the
Class M-6 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-6 Certificates would otherwise have accrued for such Distribution
Date had the Class M-6 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-6 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-6 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-6 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-6 Pass-Through Rate
(without giving effect to the Net Rate Cap).
Class M-6 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.500% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 2.250% 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 related Net Rate Cap
for such Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date) and (G) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 90.50%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-6 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
Class M-7 Certificate: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
20
Class M-7 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-7 Certificates.
Class M-7 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-7 Pass-Through Rate on
the Class M-7 Certificate Principal Balance immediately prior to such
Distribution Date.
Class M-7 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-7 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-7 Certificates
with respect to interest on such prior Distribution Dates.
Class M-7 Interest Carryover Amount: For any Distribution Date and the
Class M-7 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-7 Certificates would otherwise have accrued for such Distribution
Date had the Class M-7 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-7 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-7 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-7 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-7 Pass-Through Rate
(without giving effect to the Net Rate Cap).
Class M-7 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 2.500% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 3.750% per
annum.
Class M-7 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-7 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
Class M-7 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Class M-6 Certificate Principal Balance
(after taking into account distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date) and (H) the Class M-7 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (x)
93.00% of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus
21
the OC Floor; provided, however, that after the Certificate Principal Balance of
each other Class of Offered Certificates is reduced to zero, the Class M-7
Principal Distribution Amount for such Distribution Date will equal 100% of the
Principal Distribution Amount for such Distribution Date.
Class M-8 Certificate: Any Certificate designated as a "Class M-8
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class M-8 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-8 Certificates.
Class M-8 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-8 Pass-Through Rate on
the Class M-8 Certificate Principal Balance immediately prior to such
Distribution Date.
Class M-8 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-8 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-8 Certificates
with respect to interest on such prior Distribution Dates.
Class M-8 Interest Carryover Amount: For any Distribution Date and the
Class M-8 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-8 Certificates would otherwise have accrued for such Distribution
Date had the Class M-8 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-8 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-8 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-8 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-8 Pass-Through Rate
(without giving effect to the Net Rate Cap).
Class M-8 Margin: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 3.000% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 4.500% per
annum.
Class M-8 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-8 Margin and (ii) the related Net Rate Cap
for such Distribution Date.
Class M-8 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distributions of the Class 1-A Principal Distribution Amount and Class 2-A
Principal Distribution Amount for such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4
22
Principal Distribution Amount on such Distribution Date), (F) the
Class M-5 Certificate Principal Balance (after taking into account distribution
of the Class M-5 Principal Distribution Amount on such Distribution Date), (G)
the Class M-6 Certificate Principal Balance (after taking into account
distribution of the Class M-6 Principal Distribution Amount on such Distribution
Date), (H) the Class M-7 Certificate Principal Balance (after taking into
account distribution of the Class M-7 Principal Distribution Amount on such
Distribution Date) and (I) the Class M-8 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 94.50%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-8 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class P Certificate Principal Balance: As of any date of determination,
the Certificate Principal Balance of the Class P Certificates.
Class P Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Class P Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-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: October 28, 2004.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Compensating Interest: With respect to any Distribution Date, an amount
equal to 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
23
administered, which office at the date of the execution of this Agreement is
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Corporate
Trust MBS Administration), telephone: (▇▇▇) ▇▇▇-▇▇▇▇, facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Corresponding Certificate: With respect to each REMIC I Regular
Interest set forth below, the Regular Certificate set forth in the table below:
REMIC I Regular Interest REMIC II Certificate
------------------------ --------------------
LT-1A1 Class 1-A-1 Certificate
LT-1A2 Class 1-A-2 Certificate
LT-2A1 Class 2-A-1 Certificate
LT-2A2 Class 2-A-2 Certificate
LT-2A3 Class 2-A-3 Certificate
LT-M1 Class M-1 Certificate
LT-M2 Class M-2 Certificate
LT-M3 Class M-3 Certificate
LT-M4 Class M-4 Certificate
LT-M5 Class M-5 Certificate
LT-M6 Class M-6 Certificate
LT-M7 Class M-7 Certificate
LT-M8 Class M-8 Certificate
LT-B Class B Certificate
LT-P Class P Certificate
LT-R Class A-R Certificate
Corridor Contracts: The Class 1-A Corridor Contract, Class 2-A Corridor
Contract and Subordinated Corridor Contract.
Corridor Contract Novation Agreement: The Class 1-A Corridor Contract
Novation Agreement, Class 2-A Corridor Contract Novation Agreement and
Subordinated Corridor Contract Novation Agreement, as applicable.
Corridor Contract Counterparty: Bear ▇▇▇▇▇▇▇ Financial Products, Inc..,
and any permitted successors and assigns pursuant to the Corridor Contracts.
Corridor Contract Payment Amount: The Class 1-A Corridor Contract
Payment Amount, Class 2-A Corridor Contract Payment Amount and Subordinated
Corridor Contract Payment Amount, as applicable.
Corridor Contract Termination Date: The Class 1-A Corridor Contract
Termination Date, Class 2-A Corridor Contract Termination Date and Subordinated
Corridor Contract Termination Date, as applicable.
24
Cumulative Loss Trigger Event: With respect to a Distribution Date on
or after the Stepdown Date exists if the aggregate amount of Realized Losses on
the Mortgage Loans from (and including) the Cut-off Date for each Mortgage Loan
to (and including) the last day of the related Due Period (reduced by the
aggregate amount of Subsequent Recoveries received through the last day of that
Due Period) a Cumulative Loss Trigger Event exceeds the applicable percentage,
for such Distribution Date, of the Cut-off Date Principal Balance of the
Mortgage Loans, as set forth below:
Distribution Date Percentage
----------------- ----------
November 2007 -- October 2008 4.75% with respect to November 2007, plus an additional 1/12th of
1.50% for each month thereafter until October 2008
November 2008 -- October 2009 6.25% with respect to November 2008, plus an additional 1/12th of
1.25% for each month thereafter until October 2009
November 2009 -- October 2010 7.50% with respect to November 2009, plus an additional 1/12th of
0.25% for each month thereafter until October 2010
November 2010 and thereafter 7.75%
Current Interest: With respect to (i) the Class 1-A-1 Certificates, the
Class 1-A-1 Current Interest (ii) the Class 1-A-2 Certificates, the Class 1-A-2
Current Interest, (iii) the Class 2-A-1 Certificates, the Class 2-A-1 Current
Interest, (iv) the Class 2-A-2 Certificates, the Class 2-A-2 Current Interest
(v) the Class 2-A-3 Certificates, the Class 2-A-3 Current Interest (vi) the
Class M-1 Certificates, the Class M-1 Current Interest, (vii) the Class M-2
Certificates, the Class M-2 Current Interest, (viii) the Class M-3 Certificates,
the Class M-3 Current Interest, (ix) the Class M-4 Certificates, the Class M-4
Current Interest, (x) the Class M-5 Certificates, the Class M-5 Current
Interest, (xi) the Class M-6 Certificates, the Class M-6 Current Interest, (xii)
the Class M-7 Certificates, the Class M-7 Current Interest, (xiii) the Class M-8
Certificates, the Class M-8 Current Interest, (xiv) the Class B Certificates,
the Class B Current Interest and (xv) the Class C Certificates, the Class C
Current Interest.
Cut-off Date: In the case of any Mortgage Loan, the later of (x)
October 1, 2004 and (y) the date of origination of such Mortgage Loan. When used
with respect to any Mortgage Loans "the Cut-off Date" shall mean the related
Cut-off Dates.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
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
25
from a Deficient Valuation or any other reduction that results in a permanent
forgiveness of principal.
Definitive Certificates: As defined in Section 5.06.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
Delay Delivery Mortgage Loans: The Mortgage Loans identified on the
schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for which all
or a portion of a related Mortgage File is not delivered to the Trustee on or
prior to the Closing Date. The Depositor shall deliver (or cause delivery of)
the Mortgage Files to the Trustee: (A) with respect to at least 50% of the
Mortgage Loans in each Loan Group, not later than the Closing Date, (B) with
respect to at least an additional 40% of the Mortgage Loans, not later than 20
days after the Closing Date, and (C) with respect to the remaining 10% of the
Mortgage Loans, not later than 30 days after the Closing Date. To the extent
that the Seller shall be in possession of any Mortgage Files with respect to any
Delay Delivery Loan, until delivery to of such Mortgage File to the Trustee as
provided in Section 2.01, the Seller shall hold such files as agent and in trust
for the Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to any Distribution Date on or
after the Stepdown Date, a Delinquency Trigger Event exists if the Rolling
Delinquency Percentage equals or exceeds the product of 42.25% and the Senior
Enhancement Percentage.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.
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"
26
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 2004-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 November 2004.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for scheduled payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company) are rated by each Rating Agency in one of its two highest
long-term and its highest short-term rating categories respectively, at the time
any amounts are held on deposit 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
27
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)(xi), (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date pursuant to Section 4.04(d)(i)(K) or 4.04(d)(ii)(H) and (iii)
the related Overcollateralization Reduction Amount, if any, for such
Distribution Date.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (i) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (ii) interest at
the Mortgage Rate from the Due Date as to which interest was last paid or
advanced to Certificateholders (and not reimbursed to the Master Servicer) up to
the Due Date in the month in which such Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Loan outstanding
during each Due Period as to which such interest was not paid or advanced.
Expense Fee Rate: The sum of (i) the Servicing Fee Rate and (ii) the
Trustee Fee Rate.
Extra Principal Distribution Amount: With respect to any Distribution
Date and Loan Group, the lesser of (1) the Overcollateralization Deficiency
Amount for such Distribution Date multiplied by a fraction, the numerator of
which is the Principal Remittance Amount for such Loan Group and the denominator
of which is the Principal Remittance Amount for both Loan Groups and (2) the
Loan Group Excess Cashflow Allocation Amount for such Distribution Date
available for payment thereof pursuant to Section 4.04(e)(i).
▇▇▇▇▇▇ ▇▇▇: 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.
28
Fitch: Fitch Ratings, Inc., or any successor thereto.
Five-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 60 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Fixed Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of
the related Mortgage, including any Mortgage Loans delivered in replacement
thereof.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: The percentage set forth in the related Mortgage Note for
the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth in
the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.
Group 1 Certificates: The Class A-R, Class 1-A-1, and Class 1-A-2
Certificates.
Group 1 Mortgage Loans: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in each
case any Mortgage Loans delivered in replacement thereof.
Group 1 Net WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 1.
Group 2 Certificates: The Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates.
Group 2 Mortgage Loans: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including any
Mortgage Loans delivered in replacement thereof.
Group 2 Net WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 2.
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.
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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.
Interest Carry Forward Amount: With respect to (i) the Class 1-A-1
Certificates, the Class 1-A-1 Interest Carry Forward Amount, (ii) the Class
1-A-2 Certificates, the Class 1-A-2 Interest Carry Forward Amount (iii) the
Class 2-A-1 Certificates, the Class 2-A-1 Interest Carry Forward Amount, (iv)
the Class 2-A-2 Certificates, the Class 2-A-2 Interest Carry Forward Amount, (v)
the Class 2-A-3 Certificates, the Class 2-A-3 Interest Carry Forward Amount (vi)
the Class M-1 Certificates, the Class M-1 Interest Carry Forward Amount, (vii)
the Class M-2 Certificates, the Class M-2 Interest Carry Forward Amount, (viii)
the Class M-3 Certificates, the Class M-3 Interest Carry Forward Amount, (ix)
the Class M-4 Certificates, the Class M-4 Interest Carry Forward Amount, (x) the
Class M-5 Certificates, the Class M-5 Interest Carry Forward Amount, (xi) the
Class M-6 Certificates, the Class M-6 Interest Carry Forward Amount, (xii) the
Class M-7 Certificates, the Class M-7 Interest Carry Forward Amount, (xiii) the
Class M-8 Certificates, the Class M-8 Interest Carry Forward Amount, and (xiv)
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, October 26, 2004. 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 the Trustee Fee for the Mortgage Loans for such Distribution Date.
Interest Remittance Amount: With respect to the Mortgage Loans in each
Loan Group and any 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
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Prepayment Period other than Prepayment Interest Excess, (iii) all related
Advances relating to interest with respect to the Mortgage Loans, (iv) all
Compensating Interest with respect to the Mortgage Loans, (v) Liquidation
Proceeds and Subsequent Recoveries with respect to the Mortgage Loans collected
during the related Due Period (to the extent such Liquidation Proceeds and
Subsequent Recoveries relate to interest), and (v) for the Master Servicer
Advance Date in November 2004, 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 January 2035.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York are open and conducting transactions in foreign currency
and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Master Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Advances, Servicing Fees and Servicing
Advances.
Loan 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.
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Marker Rate: With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted
average of the Pass Through Rates for each REMIC I Regular Interest (other than
REMIC I Regular Interest LT-AA, REMIC 1 Regular Interest LT-1SUB, REMIC 1
Regular Interest LT-1GRP, REMIC Regular Interest LT-2SUB, REMIC 1 Regular
Interest LT-2GRP, REMIC 1 Regular Interest LT-XX, REMIC I Regular Interest LT-P
and REMIC I Regular Interest LT-R), with the rates on each such REMIC I Regular
Interest subject to a cap equal to the Pass Through Rate for the Corresponding
Class for such REMIC I Regular Interest, and the rate on REMIC I Regular
Interest LT-ZZ subject to a cap of zero for purposes of this calculation;
provided, however, for purposes of this calculation each such rate shall be
multiplied by a fraction., the numerator of which is the actual number of days
in the accrual period and the denominator of which is 30.
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.
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.
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 File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
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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 of each of Loan Group 1 and
Loan Group 2 and the aggregate thereof;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is either (a)
a detached single family dwelling (b) a condominium unit or (c) a two to
four unit residential property;
(xiii) [reserved];
(xiv) [reserved]; and
(xv) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
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(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: For any Distribution Date, (i) With respect to the Class
1-A-1 and Class 1-A-2 Certificates, the Group 1 Net WAC, (ii) with respect to
the Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates, the Group 2 Net WAC,
and (iii) with respect to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 and Class B Certificates, the weighted
average of the Group 1 Net WAC and Group 2 Net WAC (weighted (x) in the case of
the Group 1 Net WAC, on the positive difference (if any) of the Stated Principal
Balance of the Mortgage Loans in Loan Group 1 over the outstanding aggregate
Certificate Principal Balance of the Class 1-A Certificates and (y) in the case
of the Group 2 Net WAC, on the positive difference (if any) of the Stated
Principal Balance of the Mortgage Loans in Loan Group 2 over the outstanding
aggregate Certificate Principal Balance the Class 2-A Certificates), in the case
of each of (i), (ii) and (iii) above, adjusted to an effective rate reflecting
the calculation of interest on the basis of the actual number of days elapsed
during the related interest accrual period and a 360-day year. For federal
income tax purposes, the equivalent of clause (i) above shall be expressed as
the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I
Regular Interest LT-1GRP, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interest. For federal income tax purposes, the
equivalent of clause (ii) above shall be expressed as the weighted average of
the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest
LT-2GRP, weighted on the basis of the Uncertificated Principal Balance of such
REMIC I Regular Interest. For
34
federal income tax purposes, the equivalent of clause (iii) above shall be
expressed as the weighted average of the Uncertificated REMIC I Pass-Through
Rates on (a) REMIC I Regular Interest LT-1SUB, subject to a cap and a floor
equal to the Group 1 Net WAC Rate and (b) REMIC I Regular Interest LT-2SUB,
subject to a cap and a floor equal to the Group 2 Net WAC Rate; in each case
weighted on the basis of the Uncertificated Principal Balance of such REMIC I
Regular Interests.
Net Rate Carryover: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class 1-A-1 Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class 1-A-2 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class 2-A-1, Interest Carryover
Amounts for such Distribution Date (if any), (iv) the Class 2-A-2 Interest
Carryover Amount for such Distribution Date (if any), (v) the Class 2-A-3
Interest Carryover Amount for such Distribution Date (if any), (vi) the Class
M-1 Interest Carryover Amount for such Distribution Date (if any), (vii) the
Class M-2 Interest Carryover Amount for such Distribution Date (if any), (viii)
the Class M-3 Interest Carryover Amount for such Distribution Date (if any),
(ix) the Class M-4 Interest Carryover Amount for such Distribution Date (if
any), (x) the Class M-5 Interest Carryover Amount for such Distribution Date (if
any), (xii) the Class M-6 Interest Carryover Amount for such Distribution Date
(if any), (xii) the Class M-7 Interest Carryover Amount for such Distribution
Date (if any), (xiii) the Class M-8 Interest Carryover Amount for such
Distribution Date (if any), and (xiv) the Class B Interest Carryover Amount for
such Distribution Date (if any); provided that when the term Net Rate Carryover
is used with respect to one Class of Certificates (other than the Class A-R,
Class C and Class P Certificates), it shall mean such carryover amount listed in
clauses (i), (ii), (iii) (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii),
(xiii) or (xiv) 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.
Offered Certificates: The Class 1-A-1, Class 1-A-2, Class 2-A-1, Class
2-A-2, Class 2-A-3, Class A-R, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 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,
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signed by a Servicing Officer, as the case may be, and delivered to the
Depositor and the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period for the
Certificates (other than the Class A-R, Class P and Class C Certificates), the
rate determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 1.840% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period for such Certificates.
One-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 12 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
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 liquidation of the Trust Fund by the Trustee upon the
surrender of the Class C Certificateholders of their interests or the purchase
of the Mortgage Loans by the Master Servicer pursuant to the last sentence of
Section 9.01 hereof.
Optional Termination Date: Any Distribution Date on which the Stated
Principal Balance of the Mortgage Loans and REO Properties in the Trust Fund is
equal to or less than 10% of the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Original Mortgage Loan: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the 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.
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Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Prepayment Period.
Overcollateralized Amount: For any Distribution Date, the amount, if
any, by which (x) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period exceeds (y) the aggregate
Certificate Principal Balance of the Offered Certificates as of such
Distribution Date (after giving effect to distributions in respect of the
Principal Remittance Amount on such Distribution Date).
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount for such Distribution Date (after
giving effect to distributions in respect of the Principal Remittance Amount for
such Distribution Date).
Overcollateralization Reduction Amount: For any Distribution Date for
which the Excess Overcollateralization Amount is, or would be, after taking into
account all other distributions to be made on that Distribution Date, greater
than zero, an amount equal to the lesser of (i) the Excess Overcollateralization
Amount for that Distribution Date and (ii) the Principal Remittance Amount for
that Distribution Date.
Overcollateralization Target Amount: (a) on each Distribution Date
prior to the Stepdown Date, 2.00% of the Cut-off Date Pool Principal Balance,
and (b) on and after the Stepdown Date, an amount equal to 4.00% of the
aggregate Stated Principal Balance of the Mortgage Loans in the Mortgage Pool
for the current Distribution Date, subject to a minimum amount equal to the OC
Floor; provided, however, that if on any Distribution Date, a Trigger Event is
in effect, the Overcollateralization Target Amount will be the
Overcollateralization Target Amount on the Distribution Date immediately
preceding such Distribution Date.
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to the Class 1-A-1 Certificates, the
Class 1-A-1 Pass-Through Rate; with respect to the Class 1-A-2 Certificates, the
Class 1-A-2 Pass-Through Rate, with respect to the Class 2-A-1 Certificates, the
Class 2-A-1 Pass-Through Rate; with respect to the Class 2-A-2 Certificates, the
Class 2-A-2 Pass-Through Rate, with respect to the Class 2-A-3 Certificates, the
Class 2-A-3 Pass-Through Rate with respect to the Class M-1 Certificates, the
37
Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class M-3 Certificates, the
Class M-3 Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4 Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5 Pass-Through Rate; with respect to the Class M-6 Certificates, the
Class M-6 Pass-Through Rate; with respect to the Class M-7 Certificates, the
Class M-7 Pass-Through Rate; with respect to the Class M-8 Certificates, the
Class M-8 Pass-Through Rate; with respect to the Class B Certificates, the Class
B Pass-Through Rate and with respect to the Class C Certificates, the Class C
Pass-Through Rate.
Percentage Interest: With respect to any Certificate (other than the
Class P, Class C or Class A-R Certificates), a fraction, expressed as a
percentage, the numerator of which is the Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
Certificate Principal Balance of the related Class. With respect to the Class C,
Class P and Class A-R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate.
Periodic Rate Cap: As to substantially all Adjustable Rate Mortgage
Loans and the related Mortgage Notes, the provision therein that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than three percentage points.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as each
Rating Agency has confirmed in writing will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by such
Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency,
or such lower rating as each Rating Agency has confirmed in writing will
not result in the downgrading or withdrawal of the ratings then assigned to
the Certificates by such Rating Agency;
(v) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long term unsecured
debt obligations of such depository institution or trust company (or in the
case of the principal depository institution in a holding company system,
the commercial paper or long-term unsecured debt obligations of such
holding company) are then rated one of the two highest long-term and the
highest short-term ratings of each such Rating
38
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 (such rating shall be the highest
commercial paper rating of S&P for any such securities) or such lower
rating as each Rating Agency has confirmed in writing will not result in
the downgrading or withdrawal of the rating then assigned to the
Certificates by such Rating Agency;
(viii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term rating
by each Rating Agency or such lower rating as each Rating Agency has
confirmed in writing will not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by such Rating Agency;
(ix) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been rated
by each Rating Agency in their respective highest applicable rating
category or such lower rating as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by such Rating Agency; and
(x) such other relatively risk free investments having a specified
stated maturity and bearing interest or sold at a discount acceptable to
each Rating Agency as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
(xi) provided, that no such instrument shall be a Permitted Investment
if such instrument (i) evidences the right to receive interest only
payments with respect to the obligations underlying such instrument, (ii)
is purchased at a premium or (iii) is purchased at a deep discount;
provided further that no such instrument shall be a Permitted Investment
(A) if such instrument evidences principal and interest payments derived
from obligations underlying such instrument and the interest payments with
respect to such instrument provide a yield to maturity of greater than 120%
of the yield to maturity at par of such underlying obligations, or (B) if
it may be redeemed at a price below the purchase price (the foregoing
clause (B) not to apply to investments in units of money market funds
pursuant to clause (vii) above); provided further that no amount
beneficially owned by any REMIC (including, without limitation, any amounts
collected
39
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 any REMIC to fail to qualify as a REMIC at
any time that any Certificates are Outstanding. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject to
tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans as of the first day of the related Due Period (after
giving effect to Principal Prepayments in the Prepayment Period including during
such Due Period).
Prepayment Assumption: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to the Offered Certificates.
40
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 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.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
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.
41
Prepayment Period: As to any Distribution Date and Due Date, the period
beginning with the opening of business on the sixteenth day of the calendar
month preceding the month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, the period from October 1, 2004) and
ending on the close of business on the fifteenth day of the month in which such
Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time. The Prime Rate shall be
adjusted automatically, without notice, on the effective date of any change in
such prime commercial lending rate. The Prime Rate is not necessarily the Bank
of New York's lowest rate of interest.
Principal Distribution Amount: With respect to any Distribution Date
and a Loan Group, the sum of (i) the Principal Remittance Amount for such Loan
Group for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Loan Group for such Distribution Date minus (iii) the amount of
any related Overcollateralization Reduction Amount for that 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: As to any Distribution Date and the
Mortgage Loans in a Loan Group, (a) the sum, without duplication, of: (i) the
scheduled principal due during the related Due Period and collected on or before
the related Determination Date or advanced on or before the related Master
Servicer Advance Date, (ii) Principal Prepayments collected in the related
Prepayment Period, (iii) the Stated Principal Balance of each Mortgage Loan that
was repurchased by the Seller or purchased by the Master Servicer, (iv) the
amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans is less than the aggregate unpaid principal balance
of any Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds and Subsequent
Recoveries collected during the related Due Period (to the extent such
Liquidation Proceeds related to principal); less (b) all non-recoverable
Advances relating to principal and certain expenses reimbursed during the
related Due Period.
Private Certificates: The Class C Certificates and Class P
Certificates.
Prospectus Supplement: The Prospectus Supplement dated October 25,
2004, 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
42
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 S&P and Fitch 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 Mortgage Note has been reduced,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation plus any reduction in the
interest component of the Scheduled Payments. With respect to each Mortgage Loan
that has become the subject of a Debt Service Reduction and any Distribution
Date, the amount, if any, by which the related Scheduled Payment was reduced.
The amount of a Realized Loss on a Liquidated Loan will be reduced by the amount
of Subsequent Recoveries received with respect to such Liquidated Loan.
Record Date: With respect to any Distribution Date and the
Certificates, other than the Class A-R, Class C and Class P Certificates, the
Business Day immediately preceding such Distribution Date, or if such
Certificates are no longer Book-Entry Certificates, the last Business Day of the
month preceding the month of such Distribution Date. With respect to the Class
A-R, Class C and Class P Certificates, the last Business Day of the month
preceding the month of a Distribution Date.
Reference Bank Rate: With respect to any Accrual Period for the Offered
Certificates (other than the Class A-R, Class P and Class C Certificates), the
arithmetic mean (rounded
43
upwards, if necessary, to the nearest whole multiple of 0.03125%) of the offered
rates for United States dollar deposits for one month that are quoted by the
Reference Banks as of 11:00 a.m., New York City time, on the related Interest
Determination Date to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Offered Certificates on such Interest Determination Date,
provided that at least two such Reference Banks provide such rate. If fewer than
two offered rates appear, the Reference Bank Rate will be the arithmetic mean
(rounded upwards, if necessary, to the nearest whole multiple of 0.03125%) of
the rates quoted by one or more major banks in New York City, selected by the
Trustee, as of 11:00 a.m., New York City time, on such date for loans in U.S.
dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the
Offered Certificates on such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than a Class A-R
Certificate.
Relief Act: The Servicemembers Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC I: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files; (ii) all payments on and
collections in respect of the Mortgage Loans due after the Cut-off Date (other
than Monthly Payments due in July 2004 and reflected in the Cut-off Date
Principal Balance) as shall be on deposit in the Certificate Account and
identified as belonging to the Trust Fund; (iii) property which secured a
Mortgage Loan and which has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure; (iv) Required
Insurance Policies pertaining to the Mortgage Loans, if any; and (v) all
proceeds of clauses (i) through (iv) above. The Corridor Contracts and Carryover
Reserve Fund will not be assets of REMIC I.
REMIC I Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests then
outstanding and (ii) the Uncertificated Pass-Through Rate for REMIC I Regular
Interest LT-AA minus the Marker Rate, divided by (b) 12.
44
REMIC I Marker Allocation Percentage: 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-1A1, REMIC I Regular
Interest LT-1A2, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC I Regular Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC 1 Regular Interest LT-M6, REMIC 1
Regular Interest LT-M7, REMIC Regular Interest LT-M8, REMIC I Regular Interest
LT-B, REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest LT-P and REMIC I
Regular Interest LT-R.
REMIC I Overcollateralized Amount: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests minus (ii) the Uncertificated Principal Balances
of REMIC I Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC I
Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I Regular
Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2,
REMIC I Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular
Interest LT-M5, REMIC 1 Regular Interest LT-M6, REMIC 1 Regular Interest LT-M7,
REMIC Regular Interest LT-M8, and REMIC I Regular Interest LT-B, in each case as
of such date of determination.
REMIC I Overcollateralization Target Amount: 0.50% of the
Overcollateralization Target Amount.
REMIC I Principal Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the sum of the Uncertificated
Principal Balances of REMIC I Regular ▇▇▇▇▇▇▇▇▇ ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇,
▇▇-▇▇▇, LT-M1, LT-M2, LT-M3, LT-M4, LT-M5, REMIC 1 Regular Interest LT-M6, REMIC
1 Regular Interest LT-M7, LT-M8, and LT-B and the denominator of which is the
sum of the Uncertificated Principal Balances of REMIC I Regular ▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, LT-M1, LT-M2, LT-M3, LT-M4, LT-M5,
LT-M6, LT-M7, LT-M8, LT-B and LT-ZZ.
REMIC I Regular Interests: REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC I Regular
Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I Regular Interest
LT-2A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I
Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest
LT-M5, REMIC 1 Regular Interest LT-M6, REMIC 1 Regular Interest LT-M-7, REMIC
Regular Interest LT-M8,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
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-1A1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-1A2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-2A1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-2A2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-2A3: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-M1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-M2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-M3: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-M4: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
46
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-M7: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-M8: 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
47
Principal Balance, that bears interest at the related Uncertificated REMIC I
Pass-Through Rate, and that has such other terms as are described herein.
REMIC I Regular Interest LT-2SUB: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-2GRP: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated 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 ▇▇▇▇▇▇▇▇▇ ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, LT-M1, LT-M2,
LT-M3, LT-M4, LT-M5, LT-M6, LT-M7, LT-M8 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-1, Class 1-A-2,
Class 2-A-1, Class 2-A-2, Class 2-A-3, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class B, Class C or Class P
Certificates.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of
48
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) [reserved], and (xii) comply with each representation and warranty
(other than a statistical representation or warranty) set forth in Section 2.03
hereof.
Request for Release: The Request for Release submitted by the 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.
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.
49
Rolling Delinquency Percentage: With respect to any Distribution Date
on or after the Stepdown Date, the average, over the past three months, of a
fraction (expressed as a percentage), (a) the numerator of which is the
aggregate Stated Principal Balances for such Distribution Date of all Mortgage
Loans 60 or more days delinquent as of the last day of the preceding month
(including Mortgage Loans in bankruptcy, foreclosure and REO Properties) and (b)
the denominator of which is the aggregate Stated Principal Balances of the
Mortgage Loans for such Distribution Date.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ 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 November 2004, to the extent not cover by Excess Cashflow, an amount
equal to 30 days interest on the Stated Principal Balance of each Mortgage Loans
that does not have a scheduled payment of interest due in the related Due Period
at the Net Mortgage Rates for such Mortgage Loans.
Senior Certificates: The Class 1-A-1, Class 1-A-2, Class 2-A-1, Class
2-A-2, Class 2-A-3 and Class A-R Certificates.
Senior Enhancement Percentage: With respect to each Distribution Date
on or after the Stepdown Date, the fraction (expressed as a percentage) (1) the
numerator of which is the excess of (a) the aggregate Stated Principal Balance
of the Mortgage Loans for the preceding Distribution Date over (b) (i) before
the aggregate Certificate Principal Balance of the Senior Certificates has been
reduced to zero, the aggregate Certificate Principal Balance of the Senior
Certificates, or (ii) after the Certificate Principal Balances of the Senior
Certificates have been reduced to zero, the Certificate Principal Balance of the
most senior Class of Certificates outstanding as of the preceding 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.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged Property, (ii)
any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.10.
50
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.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial Prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective any delinquency in payment by the related mortgagor with respect to
Actuarial Mortgage Loans, and (ii) as of any Distribution Date, the Stated
Principal Balance of the Mortgage Loan as of its Cut-off Date, minus the sum of
(a) the principal portion of the Scheduled Payments (x) due with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date and
(y) that were received by the Master Servicer as of the close of business on the
Determination Date related to such Distribution Date or with respect to which
Advances were made as of the Master Servicer Advance Date related to such
Distribution Date, (b) all Principal Prepayments with respect to such Mortgage
Loan received by the Master Servicer during each Prepayment Period ending prior
to such Distribution Date, and (c) all Liquidation Proceeds collected with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date, to the extent applied by the Master Servicer as recoveries of
principal in accordance with Section 3.12. The Stated Principal Balance of any
Mortgage Loan that becomes a Liquidated Loan will be zero on the Distribution
Date following the Due Period in which such Mortgage Loan becomes a Liquidated
Loan. References herein to the Stated Principal Balance the Mortgage Loans at
any time shall mean the aggregate Stated Principal Balances of all Mortgage
Loans in the Trust Fund as of such time.
Stepdown Date: The earlier to occur of (i) the Distribution Date
following the Distribution Date on which the aggregate Certificate Principal
Balance of the Senior Certificates is reduced to zero and (ii) the later to
occur of (a) the Distribution Date in November 2007 or (b) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Senior Certificates (after calculating anticipated distributions on such
Distribution Date) is less than or equal to 67.90% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Subordinate Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B Certificates.
51
Subordinated Corridor Contract: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Subordinate Certificateholders
(as assigned to the Trustee pursuant to the Subordinated Corridor Contract
Novation Agreement), a form of which is attached hereto as Exhibit S.
Subordinated Corridor Contract Novation Agreement: The Novation
Agreement regarding the Subordinated Corridor Contract dated as of the Closing
Date among the Seller, the Trustee and the Corridor Contract Counterparty, which
is attached hereto as Exhibit S.
Subordinated Corridor Contract Payment Amount: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Subordinated Corridor Contract.
Subordinated Corridor Contract Termination Date: The Distribution Date
in November 2011.
Subordinated Confirmation And Agreement: The Confirmation and Agreement
dated October 13, 2004, reference number FXNEC6366, evidencing the Subordinated
Corridor Contract.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Subsequent Recoveries: Unexpected recoveries, net of reimbursable
expenses, with respect to Mortgage Loans that have been previously liquidated
and that resulted in a Realized Loss.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
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.
52
Trigger Event: With respect to any Distribution Date on or after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger
Event with respect to that Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(ii); (ii) the
Certificate Account, the Distribution Account, the Carryover Reserve Fund and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) the Corridor Contracts; (iv) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (v) the mortgagee's rights under any insurance policies with respect
to the Mortgage Loan; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
Trustee: The Bank of New York, a New York banking corporation, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Trustee Advance Rate: With respect to any Advance made by the Trustee
pursuant to Section 4.01(b), a per annum rate of interest determined as of the
date of such Advance equal to the Prime Rate in effect on such date plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.009% per annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Uncertificated Accrued Interest: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated Pass-Through Rate for such Distribution Date, accrued on the
Uncertificated Principal, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the Uncertificated Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months. For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests for any Distribution Date:
(A) The REMIC I Marker Allocation Percentage of the aggregate amount of
any Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated among REMIC I
53
Regular Interest LT-AA, REMIC I Regular Interest LT-1A1, REMIC I Regular
Interest LT-1A2, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC I Regular Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC 1 REGULAR Interest LT-M6, REMIC 1
Regular Interest LT-M7, REMIC 1 Regular Interest LT-M8, REMIC I Regular Interest
LT-B, REMIC I Regular Interest LT-ZZ, pro rata based on, and to the extent of,
one month's interest at the then applicable respective REMIC I Pass-Through Rate
on the respective Uncertificated Principal Balance of each such REMIC I Regular
Interest; and
(B) The REMIC I Sub WAC Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by payments by
Compensating Interest) incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC I Regular Interest LT-1SUB, REMIC I Regular Interest LT-1GRP,
REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest LT-2GRP and REMIC I
Regular Interest LT-XX, pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC I Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC I
Regular Interest.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate.
Uncertificated Principal Balance: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal Balance of each Uncertificated Regular Interest shall
be reduced by all distributions of principal made on such Uncertificated Regular
Interest, as applicable, on such Distribution Date and, if and to the extent
necessary and appropriate, shall be further reduced in such Distribution Date by
Realized Losses. The Uncertificated Principal Balance of each Uncertificated
Regular Interest shall never be less than zero.
Uncertificated REMIC I Pass-Through Rate: With respect to REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-1A1, REMIC I Regular
Interest LT-1A2, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC I Regular Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC 1 REGULAR Interest LT-M6, REMIC 1
Regular Interest LT-M7, REMIC 1 Regular Interest LT-M8, REMIC I Regular Interest
LT-B, REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest LT-P, REMIC I
Regular Interest LT-AR, REMIC I Regular Interest LT-1SUB, REMIC I Regular
Interest LT-2SUB and REMIC I Regular Interest LT-XX, the weighted average of the
Adjusted Net Mortgage Rates of the Mortgage Loans. With respect to REMIC I
Regular Interest LT-1GRP, the weighted average of the Adjusted Net Mortgage
Rates of the Group 1 Mortgage Loans and with respect REMIC I Regular Interest
LT-2GRP, the weighted average of the Adjusted Net Mortgage Rates of the Group 2
Mortgage Loans.
Uncertificated Regular Interests: The REMIC I Regular Interests.
Underwriter: Countrywide Securities Corporation or ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
54
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
Unpaid Realized Loss Amount: For any Class of Subordinate Certificates
or Class 1-A-2 Certificates, the portion of the aggregate Applied Realized Loss
Amount previously allocated to that Class remaining unpaid from prior
Distribution Dates, as reduced by the amount of the increase in the related
Certificate Principal Balance due to the receipt of Subsequent Recoveries.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any Certificates for purposes of the voting provisions
hereunder. Voting Rights allocated to each Class of Certificates shall be
allocated 97% to the Certificates other than the Class A-R, Class C and Class P
Certificates (with the allocation among the Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class C and Class P Certificates. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.
55
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans, including all interest and
principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date. The Seller
confirms that, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred to in
the preceding paragraph, the Depositor sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for benefit of the Certificateholders, without
recourse, all right title and interest in the Mortgage Loans.
The Seller further agrees to assign all of its right, title and
interest in and to the interest rate cap transactions evidenced by the
Confirmation And Agreements , and to cause all of its obligations in respect of
such transactions to be assumed by, the Trustee on behalf of the Trust Fund, on
the terms and conditions set forth in the Corridor Contract Novation Agreement.
The Depositor, the Master Servicer and the Trustee agree that it is not
intended that any mortgage loan be included in the Trust that is either (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 or (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004.
(b) [reserved]
(c) The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust Fund
not otherwise conveyed to the Trustee pursuant to Sections 2.01(a) or (b).
(d) [reserved]
(e) [reserved]
(f) [reserved]
56
(g) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered to, and deposited with, the Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit
with, the Trustee within the time periods specified in the definition of Delay
Delivery Mortgage Loans) (except as provided in clause (vi) below) for the
benefit of the Certificateholders, the following documents or instruments with
respect to each such Mortgage Loan so assigned (with respect to each Mortgage
Loan, clause (i) through (vi) below, together, the "Mortgage File" for each such
Mortgage Loan):
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following
form: "Pay to the order of ________________ without recourse", with
all intervening endorsements that show a complete chain of endorsement
from the originator to the Seller, or, if the original Mortgage Note
has been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of each
MERS Mortgage Loan, the original Mortgage, noting the presence of the
MIN of the Mortgage Loan and language indicating that the Mortgage
Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence
of recording indicated thereon, or a copy of the Mortgage certified by
the public recording office in which such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-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 October 1, 2004, without
recourse" (each such assignment, when duly and validly completed, to
be in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which such
assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or
a printout of the electronic equivalent and all riders thereto or, in
the event such original title policy has not been received from the
insurer, such original or duplicate original lender's title policy and
all riders thereto shall be delivered within one year of the Closing
Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the
57
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 Trustee a true copy of
such Mortgage and of each such undelivered interim assignment of the Mortgage
each certified by the Seller, the applicable title company, escrow agent or
attorney, or the originator of such Mortgage, as the case may be, to be a true
and complete copy of the original Mortgage or assignment of Mortgage submitted
for recording. For any such Mortgage Loan that is not a MERS Mortgage Loan the
Seller shall promptly deliver or cause to be delivered to the Trustee such
original Mortgage and such assignment or assignments with evidence of recording
indicated thereon upon receipt thereof from the public recording official, or a
copy thereof, certified, if appropriate, by the relevant recording office, but
in no event shall any such delivery be made later than 270 days following the
Closing Date; provided that in the event that by such date the Seller is unable
to deliver or cause to be delivered each such Mortgage and each interim
assignment by reason of the fact that any such documents have not been returned
by the appropriate recording office, or, in the case of each interim assignment,
because the related Mortgage has not been returned by the appropriate recording
office, the Seller shall deliver or cause to be delivered such documents to the
Trustee as promptly as possible upon receipt thereof. If the public recording
office in which a Mortgage or interim assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall satisfy the Seller's obligations in
Section 2.01. If any document submitted for recording pursuant to this Agreement
is (x) lost prior to recording or rejected by the applicable recording office,
the Seller shall immediately prepare or cause to be prepared a substitute and
submit it for recording, and shall deliver copies and originals thereof in
accordance with the foregoing or (y) lost after recording, the Seller shall
deliver to the Trustee a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original recorded
document. The Seller shall promptly forward or cause to be forwarded to the
Trustee (x) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (y) any other documents
required to be delivered by the Depositor or the Master Servicer to the Trustee
within the time periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan as
to which the related Mortgaged Property and Mortgage File are located in (a) the
State of California or (b) any other jurisdiction under the laws of which the
recordation of the assignment specified in clause
58
(iii) above is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan, as evidenced by an
Opinion of Counsel, delivered by the Seller to the Trustee and a copy to the
Rating Agencies, in lieu of recording the assignment specified in clause (iii)
above, the Seller may deliver an unrecorded assignment in blank, in form
otherwise suitable for recording to the Trustee; provided that if the related
Mortgage has not been returned from the applicable public recording office, such
assignment, or any copy thereof, of the Mortgage may exclude the information to
be provided by the recording office. As to any Mortgage Loan other than a MERS
Mortgage Loan, the procedures of the preceding sentence shall be applicable only
so long as the related Mortgage File is maintained in the possession of the
Trustee in the State or jurisdiction described in such sentence. In the event
that with respect to Mortgage Loans other than MERS Mortgage Loans (i) the
Seller, the Depositor or the Master Servicer gives written notice to the Trustee
that recording is required to protect the right, title and interest of the
Trustee on behalf of the Certificateholders in and to any Mortgage Loan, (ii) a
court recharacterizes the sale of the Mortgage Loans as a financing, or (iii) as
a result of any change in or amendment to the laws of the State or jurisdiction
described in the first sentence of this paragraph or any applicable political
subdivision thereof, or any change in official position regarding application or
interpretation of such laws, including a holding by a court of competent
jurisdiction, such recording is so required, the Trustee shall complete the
assignment in the manner specified in clause (iii) of the second paragraph of
this Section 2.01 and the Seller shall submit or cause to be submitted for
recording as specified above or, should the Seller fail to perform such
obligations, the Trustee shall cause the Master Servicer, at the Master
Servicer's expense, to cause each such previously unrecorded assignment to be
submitted for recording as specified above. In the event a Mortgage File is
released to the Master Servicer as a result of the Master Servicer's having
completed a Request for Release in the form of Exhibit M, the Trustee shall
complete the assignment of the related Mortgage in the manner specified in
clause (iii) of the second paragraph of this Section 2.01.
So long as the Trustee maintains an office in the State of California,
the Trustee shall maintain possession of and not remove or attempt to remove
from the State of California any of the Mortgage Files as to which the related
Mortgaged Property is located in such State. In the event that the Seller fails
to record an assignment of a Mortgage Loan as herein provided within 90 days of
notice of an event set forth in clause (i), (ii) or (iii) of the above
paragraph, the Master Servicer shall prepare and, if required hereunder, file
such assignments for recordation in the appropriate real property or other
records office. The Seller hereby appoints the Master Servicer (and any
successor servicer hereunder) as its attorney-in-fact with full power and
authority acting in its stead for the purpose of such preparation, execution and
filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date and the Cut-off Date, the Seller shall
deposit or cause to be deposited in the Certificate Account the amount required
to be deposited therein with respect to such payment pursuant to Section 3.05
hereof.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver to the
Trustee the Mortgage File as required pursuant to this Section 2.01 for each
Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery Mortgage
Loan or (B) substitute the Delay Delivery Mortgage Loan for a Replacement
Mortgage Loan, which repurchase or substitution shall be accomplished in the
59
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 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 Trustee's possession, and based on its review and
examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Mortgage Loan. The Trustee agrees to
execute and deliver within thirty (30) days after the Closing Date to the
Depositor, the 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 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
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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 Trustee shall be
under no duty or obligation to inspect, review or examine such documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the 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 Trustee shall review each Mortgage File with respect to the
Mortgage Loans to determine that such Mortgage File contains the documents
listed in Section 2.01(g). If, in the course of such review, the Trustee finds
any document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) of Section 2.01(g), the
Trustee shall include such exceptions in such Final Certification (and the
Trustee shall state in such Final Certification whether any Mortgage File does
not then include the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto). If the public
recording office in which a Mortgage or assignment thereof is recorded retains
the original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) of Section 2.01(g), as applicable.
The Seller shall promptly correct or cure such defect referred to above within
90 days from the date it was so notified of such defect and, if the Seller does
not correct or cure such defect within such period, the Seller shall either (A)
if the time to cure such defect expires prior to the end of the second
anniversary of the Closing Date, substitute for the related Mortgage Loan a
Replacement Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, or (B) purchase
such Mortgage Loan from the Trust Fund within 90 days from the date the Seller
was notified of such defect in writing at the Purchase Price of such Mortgage
Loan; provided that any such substitution pursuant to (A) above or repurchase
pursuant to (B) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05 hereof and any substitution
pursuant to (A) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit N. No
substitution will be made in any calendar month after the Determination Date for
such month. The Purchase Price for any such Mortgage Loan shall be deposited by
the Seller in the Certificate Account and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File to the Seller and shall execute and
deliver at the Seller's request such instruments of transfer or assignment as
the Seller has prepared, in each case without recourse, as shall be necessary to
vest in the Seller, or a designee, the Trust Fund's interest in any Mortgage
Loan released pursuant hereto. If pursuant to the foregoing provisions the
Seller repurchases an Mortgage Loan that is a MERS Mortgage Loan, the Master
Servicer shall cause MERS to execute and deliver an assignment of the Mortgage
in recordable form to transfer the Mortgage
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from MERS to the Seller and shall cause such Mortgage to be removed from
registration on the MERS(R) System in accordance with MERS' rules and
regulations.
The Trustee shall retain possession and custody of each Mortgage File
in accordance with and subject to the terms and conditions set forth herein. The
Seller shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File that come into the possession of the Seller from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a)(A) or (B) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Depositor and any
Certificateholder against the Seller.
(b) [reserved]
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Seller.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Seller and the Trustee as follows, as of the date hereof with
respect to the Mortgage Loans:
(i) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the
laws of the State of Texas and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Master Servicer in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with
the doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Mortgage Loan, to service the
Mortgage Loans in accordance with the terms of this Agreement and to
perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(ii) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Master Servicer the
execution, delivery 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.
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(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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to
sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization
or order is required, the Master Servicer has obtained the same.
(vii) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and procedures
of MERS in connection with the 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 Group):
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(i) The Seller is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State of
New York and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Seller
in any state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and, in
any event, is in compliance with the doing business laws of any such
state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to sell the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(ii) The Seller has the full corporate power and authority to
sell each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on
the part of the Seller the execution, delivery and performance of this
Agreement; and this Agreement , assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the Seller,
the sale of the Mortgage Loans by the Seller under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
and thereof are in the ordinary course of business of the Seller and
will not (A) result in a material breach of any term or provision of
the charter or by-laws of the Seller or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result
in a material default under, the terms of any other material agreement
or instrument to which the Seller is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Seller; and the Seller is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body 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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ 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
64
Mortgage Loans or to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Seller of, or compliance by the Seller with,
this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Seller has obtained the same.
(vii) The information set forth on Exhibit F-1 hereto with
respect to each Mortgage Loan is true and correct in all material
respects as of the Closing Date.
(viii) The Seller will treat the transfer of the Mortgage Loans
to the Depositor as a sale of the Mortgage Loans for all tax,
accounting and regulatory purposes.
(ix) None of the Mortgage Loans are more than 60 days delinquent
in payment of principal and interest.
(x) No Mortgage Loan secured by a first lien on the related
Mortgaged Property had a Loan-to-Value Ratio at origination in excess
of 100%.
(xi) Each Mortgage Loan is secured by a valid and enforceable
first lien on the related Mortgaged Property, subject only to (1) the
lien of non-delinquent current real property taxes and assessments,
(2) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan, and (3) other matters to which like properties are
commonly subject that do not materially interfere with the benefits of
the security intended to be provided by such Mortgage.
(xii) Immediately prior to the assignment of each Mortgage Loan
to the Depositor, the Seller had good title to, and was the sole owner
of, such Mortgage Loan free and clear of any pledge, lien, encumbrance
or security interest and had full right and authority, 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.
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(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 ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and is in a form
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ 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 and against any loss
by reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment in the
mortgage interest rate and/or monthly payment; to the best of the
Seller's knowledge, no claims have been made under such mortgage title
insurance policy and no prior holder of the related Mortgage,
including the Seller, has done, by act or omission, anything that
would impair the coverage of such mortgage title insurance policy.
(xix) No Mortgage Loan was the subject of a Principal Prepayment
in full between the Closing Date and the Cut-off Date.
(xx) To the best of the Seller's knowledge, all of the
improvements that were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(xxi) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
66
(xxii) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and under applicable
law, except that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. To the
best of the Seller's knowledge, all parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties.
(xxiii) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making,
or closing or recording the Mortgage Loans were paid.
(xxiv) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise
by judicial foreclosure.
(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
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ 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.
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(xxxii) [No more than approximately [6.31]% and [1.00]% of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are
secured by two-family dwellings. No more than approximately [1.8]% and
none of the Mortgage Loans in Loan Group 1 and Loan Group 2,
respectively, are secured by three-family dwellings. No more than
approximately [1.49]% and none of the Mortgage Loans in Loan Group 1
and Loan Group 2, respectively, are secured by four-family dwellings.
No more than approximately [5.44]% and [5.5%] of the Mortgage Loans in
Loan Group 1 and Loan Group 2, respectively, are secured by
condominium units. No more than approximately [ ]% and [ ]% of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are
secured by high rise condominium units. No less than approximately
[76.16%] and 80.28% of the Mortgage Loans in Loan Group 1 and Loan
Group 2, respectively, are secured by single family detached
dwellings. No more than approximately [0.28%] of the Mortgage Loans in
Group 1 and [0.02]% of the Mortgage Loans in Group 2 are secured by
manufactured housing. No more than approximately [7.99]% and [12.8]%
of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively,
are secured by PUDs.]
(xxxiii) [ No Mortgage Loan in Loan Group 1 and Loan Group 2 had
a principal balance in excess of $498,051 and $1,113,215,
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 [ ];
(xxxvi) Each One-Year Hybrid Mortgage Loan had an initial
Adjustment Date no later than [ ]; each Two-Year Hybrid Mortgage Loan
had an initial Adjustment Date no later than [ ]; each Three-Year
Hybrid Mortgage Loan had an initial Adjustment Date no later than [ ];
each Five-Year Hybrid Mortgage Loan had an initial Adjustment Date no
later than [ ].
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(xxxvii) Approximately [81.69% and 87.40%] 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 [ ]% and [ ]%
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 [ ]% and [ ]% 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 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
69
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
December 1, 2004.
(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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac.
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(xlix) None of the Mortgage Loans is a graduated payment mortgage
loan or a growing equity mortgage loan, and no Mortgage Loan is
subject to a buydown or similar arrangement.
(l) The Mortgage Rates borne by the Mortgage Loans in Loan Group
1 as of the Cut-off Date ranged from 4.500% per annum to [12.85]% per
annum and the weighted average Mortgage Rate as of the Cut-off Date
was [6.881]% per annum. The Mortgage Rates borne by the Mortgage Loans
in Loan Group 2 as of the Cut-off Date ranged from [4.800]% per annum
to [9.990]% per annum and the weighted average Mortgage Rate as of the
Cut-off Date was [6.586]% per annum.
(li) The Mortgage Loans were selected from among the outstanding
one- to four-family mortgage loans in the Seller's portfolio at the
Closing Date, as to which the representations and warranties made as
to the Mortgage Loans set forth in this Section 2.03(b) can be made.
No selection was made in a manner that would adversely affect the
interests of Certificateholders.
(lii) The Gross Margins on the Adjustable Rate Mortgage Loans
that are Mortgage Loans in Loan Group 1 range from approximately
[3.875]% to [8.00]% and the weighted average Gross Margin was
approximately [6.249]%. The Gross Margins on the Adjustable Rate
Mortgage Loans that are Mortgage Loans in Loan Group 2 range from
approximately [4.050% to 9.850%] and the weighted average Gross Margin
was approximately [6.245]%.
(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).
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(lix) The information set forth in the Prepayment Charge Schedule
with respect to each Mortgage Loan is complete, true and correct in
all material respects at the date or dates respecting which such
information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms under applicable law upon the
Mortgagor's full and voluntary principal prepayment (except to the
extent that: (1) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally; or (2) the
collectibility thereof may be limited due to acceleration in
connection with a foreclosure or other involuntary prepayment).
(lx) No Mortgage Loan is a "high cost home loan" as defined in
the Georgia Fair Lending Act, as amended. No Mortgage Loan with a
principal balance at origination (or modification) equal to or less
than the mortgage loan balance limit of ▇▇▇▇▇▇ ▇▇▇ 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.
(lxii) No Mortgage Loan is classified as (a) a high cost mortgage
loan under the Home Ownership and Equity Protection Act of 1994 or (b)
a "high cost" loan under any other applicable state, federal or local
law.
(lxiii) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Standard & Poor's LEVELS(R)
Glossary, Version 5.6 Revised, Appendix E, attached hereto as Exhibit
U) and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act.
(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)
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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.
With respect to any Replacement Mortgage Loan or Loans, the Seller
delivering such Replacement Mortgage Loan shall deliver to the Trustee for the
benefit of the Certificateholders the related Mortgage Note, Mortgage and
assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
to the 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
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of substitution is less than the Stated Principal Balance (after application of
the principal portion of the Scheduled Payment due in the month of substitution)
of all such Deleted Mortgage Loans, and costs and damages incurred by the Trust
Fund in connection with a repurchase pursuant to Section 2.03 hereof that arise
out of a violation of any predatory or abusive lending law which also
constitutes an actual breach of representation (xxxiv) of Section 2.03(b)
hereof. An amount equal to the aggregate of the deficiencies described in the
preceding sentence (such amount, the "Substitution Adjustment Amount") shall be
forwarded by the Seller to the Master Servicer and deposited by the Master
Servicer into the Certificate Account not later than the Determination Date for
the Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.08 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for Release in the form of Exhibit N hereto, the 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 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
74
affecting creditors' rights generally and (ii) general principles of equity,
regardless of whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the Depositor,
the consummation of the transactions contemplated by this Agreement, and the
fulfillment of or compliance with the terms hereof and thereof are in the
ordinary course of business of the Depositor and will not (A) result in a
material breach of any term or provision of the charter or by-laws of the
Depositor or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the terms
of any other material agreement or instrument to which the Depositor is a party
or by which it may be bound or (C) constitute a material violation of any
statute, order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over the Depositor; and the Depositor is not in breach or violation of any
material indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or meet any
of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Depositor to perform its obligations under this Agreement in
accordance with the terms hereof and thereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Depositor has
obtained the same.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the Closing Date, that following the
transfer of the Mortgage Loans to it by the Seller, the Depositor had good title
to the Mortgage Loans, and the related Mortgage Notes were subject to no
offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in the two immediately preceding paragraphs shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee of
a breach of any of the foregoing representations and warranties set forth in the
immediately preceding paragraph (referred to herein as a "breach"), which breach
materially and adversely affects the interest of the Certificateholders, the
party discovering such breach shall give prompt written notice to the others and
to each Rating Agency. The Depositor hereby covenants with respect to the
representations and warranties made by it in this Section 2.04 that within 90
days of the earlier of the discovery it or receipt of written notice by it from
any party of a breach of any representation or warranty set forth herein made
that materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan, it shall cure such breach in all material respects and, if
such breach is not so cured, shall repurchase or replace the affected Mortgage
Loan or Loans in accordance with the procedure set forth in Section 2.03(c).
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Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee an Opinion of Counsel, addressed to the
Trustee, to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller, the 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:
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(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any affiliate
of the Depositor or the Trustee and prepared by the Master Servicer pursuant to
this Agreement will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information, certificate, statement
or report not misleading.
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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 any REMIC to fail to qualify as a REMIC or
result in the imposition of any tax under Section 860(a) or 860(d) of the Code,
but in any case not in any manner that is a lesser standard than that provided
in the first sentence of this Section 3.01. Without limiting the generality of
the foregoing, the Master Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Master Servicer believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to
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such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Trustee and its successors and assigns.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers to the
Trustee by the Closing Date.
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a subservicer or reference to actions taken through a Master Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
Every subservicing agreement entered into by the Master Servicer shall contain a
provision giving the successor Master Servicer the option to terminate such
agreement in the event a successor Master Servicer is appointed. All actions of
each subservicer performed pursuant to the related subservicing agreement shall
be performed as an agent of the Master Servicer with the same force and effect
as if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
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Section 3.03 Rights of the Depositor, the Seller and the Trustee in
Respect of the Master Servicer.
None of the Trustee, the Seller or the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default), the
Trustee or its designee shall thereupon assume all of the rights and obligations
of the Master Servicer hereunder arising thereafter (except that the Trustee
shall not be (i) liable for losses of the Master Servicer pursuant to Section
3.10 hereof or any acts or omissions of the predecessor Master Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for expenses of the Master Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.03 or the first paragraph of Section 6.02 hereof). If the
Master Servicer shall for any reason no longer be the Master Servicer (including
by reason of any Event of Default), the Trustee (or any other successor
servicer) may, at its option, succeed to any rights and obligations of the
Master Servicer under any subservicing agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor servicer) shall not
incur any liability or have any obligations in its capacity as servicer under a
subservicing agreement arising prior to the date of such succession unless it
expressly elects to succeed to the rights and obligations of the Master Servicer
thereunder; and the Master Servicer shall not thereby be relieved of any
liability or obligations under the subservicing agreement arising prior to the
date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; 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
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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 (other than interest
accrued on the Mortgage Loans and due on or prior to the related
Cut-off Date) on the Mortgage Loans net of the related Servicing Fee
permitted under Section 3.15 and Prepayment Interest Excess;
(iii) all Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries, other than proceeds to be applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in
accordance with the 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;
(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.
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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 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 November 2004, 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) [reserved]
(f) Each institution that maintains the Certificate Account or the
Distribution Account shall invest the funds in each such account, as directed by
the 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
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(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 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. On the Closing Date, an
amount equal to $100 shall be deposited in the Class P Distribution Account and
shall be held in trust for the Class P Certificateholders for the uses and
purposes set forth in this Agreement. Such funds may not be invested.
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the 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.
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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 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 and Subsequent Recoveries) 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;
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(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
Subsequent Recoveries and purchase and repurchase proceeds) that represent late
recoveries of the payments for which such advances were made pursuant to Section
3.01 or Section 3.06;
(vi) to pay to the Seller, the Depositor or the Master Servicer, as
applicable, with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section 2.02, 2.03 or 3.12, all
amounts received thereon and not taken into account in determining the related
Stated Principal Balance of such repurchased Mortgage Loan;
(vii) to reimburse the Seller, the Master Servicer or the Depositor for
expenses incurred by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 6.03 hereof provided that such
amount shall only be withdrawn following the withdrawal from the Certificate
Account for deposit into the Distribution Account pursuant to the following
paragraph;
(viii) to withdraw pursuant to Section 3.05 any amount deposited in the
Certificate Account and not required to be deposited therein; and
(ix) to clear and terminate the Certificate Account upon termination of
this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Certificate
Account and remit to the Trustee the Interest Remittance Amount and the
Principal Remittance Amount for 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
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the last paragraph of Section 8.11). In addition, the Trustee may from time to
time make withdrawals from the Distribution Account for the following purposes:
(i) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds
in or credited to the Distribution Account;
(ii) to pay the Trustee the Trustee Fee on each Distribution
Date;
(iii) to withdraw pursuant to Section 3.05 any amount deposited
in the Distribution Account and not required to be deposited therein;
(iv) to reimburse the Trustee for any unreimbursed Advances made
by it pursuant to Section 4.01(b) hereof, such right of reimbursement
pursuant to this subclause (iv) being limited to (x) amounts received
on the related Mortgage Loan(s) in respect of which any such Advance
was made and (y) amounts not otherwise reimbursed to the Trustee
pursuant to Section 3.08(a)(ii) hereof;
(v) to reimburse the Trustee for any Nonrecoverable Advance
previously made by the Trustee pursuant to Section 4.01(b) hereof,
such right of reimbursement pursuant to this subclause (v) being
limited to amounts not otherwise reimbursed to the Trustee pursuant to
Section 3.08(a)(iii) hereof; and
(vi) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
(c) The Trustee shall withdraw funds from the Carryover Reserve Fund
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in
the Carryover Reserve Fund and not required to be deposited therein;
and
(ii) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 [Reserved.]
Section 3.10 Maintenance of Hazard Insurance.
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
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have an accompanying endorsement that contains, a standard mortgagee clause. The
Master Servicer shall also cause flood insurance to be maintained on property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan,
to the extent described below. Pursuant to Section 3.05 hereof, any amounts
collected by the Master Servicer under any such policies (other than the amounts
to be applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Master Servicer's normal servicing procedures) shall be deposited in the
Certificate Account. Any cost incurred by the Master Servicer in maintaining any
such insurance shall not, for the purpose of calculating monthly distributions
to the Certificateholders or remittances to the Trustee for their benefit, be
added to the principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds to the extent permitted by Section 3.08 hereof. It is
understood and agreed that no earthquake or other additional insurance is to be
required of any Mortgagor or maintained on property acquired in respect of a
Mortgage other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance. If the
Mortgaged Property is located at the time of origination of the Mortgage Loan in
a federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
Flood Disaster Protection Act of 1973, as amended.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement
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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 Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds and Realized Losses; Repurchase of
Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate
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Account pursuant to Section 3.08 hereof). The Master Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided that it shall be entitled to reimbursement thereof from
the proceeds of liquidation of the related Mortgaged Property, as contemplated
in Section 3.08 hereof. If the Master Servicer has knowledge that a Mortgaged
Property that the Master Servicer is contemplating acquiring in foreclosure or
by deed-in-lieu of foreclosure is located within a one-mile radius of any site
with environmental or hazardous waste risks known to the Master Servicer, the
Master Servicer will, prior to acquiring the Mortgaged Property, consider such
risks and only take action in accordance with its established environmental
review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Master Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity thereunder. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall either itself or through an agent selected by the Master
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but in
no event later than three years after its acquisition by the Trust Fund or, at
the expense of the Trust Fund, the Master Servicer shall request, more than 60
days prior to the day on which such three-year period would otherwise expire, an
extension of the three-year grace period. In the event the Trustee shall have
been supplied with an Opinion of Counsel (such opinion not to be an expense of
the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of the Trust Fund as defined in section
860F of the Code or cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding, the Trust Fund may continue to hold
such Mortgaged Property (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
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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.
(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 during
any Calendar Quarter at a price equal
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to the Purchase Price; provided, however, that the Master Servicer may only
exercise this right during the period beginning on the first Business Day of the
following Calendar Quarter, and ending at the close of business on the
second-to-last Business Day of such following Calendar Quarter 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 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify the
Trustee by delivering a Request for Release substantially in the form of Exhibit
N. Upon receipt of such request, the Trustee shall promptly release the related
Mortgage File to the Master Servicer, and the Trustee shall at the Master
Servicer's direction execute and deliver to the Master Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by the
Master Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. The Master Servicer is authorized to cause the removal
from the registration on the MERS(R) System of such Mortgage and to execute and
deliver, on behalf of the Trust Fund and the Certificateholders or any of them,
any and all instruments of satisfaction or cancellation or of partial or full
release. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Certificate Account, the
Distribution Account, the Carryover Reserve Fund or the related subservicing
account. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose, collection under
any policy of flood insurance any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Mortgage
File, the Trustee shall, upon delivery to the Trustee of a Request for Release
in the form of Exhibit M signed by a Servicing Officer, release the Mortgage
File to the Master Servicer. Subject to the further limitations set forth below,
the Master Servicer shall cause the Mortgage File or documents so released to be
returned to the Trustee when the need therefor by the Master Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds
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thereof are deposited in the Certificate Account, in which case the Trustee
shall deliver the Request for Release to the Master Servicer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Master Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Trustee to be returned to the Trustee within 21 calendar days
after possession thereof shall have been released by the Trustee unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account, and the Master
Servicer shall have delivered to the Trustee a Request for Release in the form
of Exhibit N or (ii) the Mortgage File or document shall have been delivered to
an attorney or to a public trustee or other public official as required by law
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property and the Master Servicer shall have
delivered to the Trustee an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery.
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Subsequent Recoveries
or Insurance Proceeds in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including but not limited to,
any funds on deposit in the Certificate Account, shall be held by the Master
Servicer for and on behalf of the Trust Fund and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, Distribution Account or Carryover Reserve Fund or in any
Escrow Account (as defined in Section 3.06), or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Master
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Master Servicer under this
Agreement.
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Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of 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.
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 2004 fiscal year, an Officer's Certificate stating, as to
the signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of the performance of the Master Servicer
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to
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any Certificateholder upon request at the Master Servicer's expense, provided
such statement is delivered by the Master Servicer to the Trustee.
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) the 80th day after the end of the Master
Servicer's fiscal year, commencing with its 2004 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 2004, 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 Corridor Contracts.
The Seller shall assign all of its right, title and interest in and to
the interest rate cap transactions evidenced by the Corridor Contracts to, and
shall cause all of its obligations in respect of such transaction to be assumed
by, the Trustee on behalf of the Trust Fund, on the terms and conditions set
forth in the Corridor Contract Novation Agreement. The Corridor Contracts will
be assets of the Trust Fund but will not be assets of any REMIC. The Master
Servicer, on behalf of the Trustee, shall deposit any amounts received from time
to time with respect to the Corridor Contracts into the Carryover Reserve Fund.
The parties hereto acknowledge and agree that the Trustee is directed and
authorized by the Depositor to sign the Corridor Contract Novation Agreement and
shall be fully protected in relying thereon. The representations made by the
Bank of New York as Assignee under the Corridor Contract Novation Agreement are
made by the Trustee on behalf of, and solely as Trustee (and not in its
individual capacity) for the Trust Fund. The representations made by the Bank of
New York as Assignee under the Corridor Contract Novation Agreement are made by
the Trustee on behalf of, and solely as Trustee (and not in its individual
capacity) for the Trust Fund.
The Master Servicer, on behalf of the Trustee, shall prepare and
deliver any notices required to be delivered under the Corridor Contracts.
The Master Servicer, on behalf of the Trustee, shall act as calculation
agent and/or shall terminate the Corridor Contracts, in each case upon the
occurrence of certain events of default or termination events to the extent
specified thereunder. Upon any such termination, the Corridor Contract
Counterparty will be obligated to pay the Trustee or the 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
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such termination shall be deposited and held in the Carryover Reserve Fund to
pay Net Rate Carryover for the applicable Certificates (by deposit of the amount
of any such Net Rate Carryover in the Carryover Reserve Fund for payment to the
related Certificateholders) as provided in Section 4.04(a) on Distribution Dates
following such termination to and including the Cap Contract Termination Date.
On the related Corridor Contract Termination Date, after all other distributions
on such date, if any such amounts in respect of early termination remain in the
Carryover Reserve Fund, such amounts shall be distributed by the Trustee to the
Class C Certificateholder.
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full 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.
(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
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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
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accordance with Section 7.01 and (b) subject to the limitations set forth in
Section 3.04, assume all of the rights and obligations of the 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, until such Interest Funds have been fully
disbursed:
(i) concurrently
(A) from the Interest Funds for Loan Group 1 (and
after the distribution of Interest Funds from Loan Group 2 as
provided in clause (B) below, from Interest Funds for Loan
Group 2), to each Class of the Class 1-A Certificates, pro
rata, based on their respective entitlements, the Current
Interest and any Interest Carry Forward Amount for such Class,
and
(B) from the Interest Funds for Loan Group 2 (and
after the distribution of Interest Funds from Loan Group 1 as
provided in clause (A) above, from Interest Funds for Loan
Group 1), to each Class of the Class 2-A Certificates, pro
rata, based on their respective entitlements, the Current
Interest and any Interest Carry Forward Amount for such Class;
(ii) from the Interest Funds for both Loan Groups to the Class
M-1 Certificates, the Class M-1 Current Interest;
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(iii) from the Interest Funds for both Loan Groups to the Class
M-2 Certificates, the Class M-2 Current Interest;
(iv) from the Interest Funds for both Loan Groups to the Class
M-3 Certificates, the Class M-3 Current Interest;
(v) from the Interest Funds for both Loan Groups to the Class M-4
Certificates, the Class M-4 Current Interest;
(vi) from the Interest Funds for both Loan Groups to the Class
M-5 Certificates, the Class M-5 Current Interest;
(vii) from the Interest Funds for both Loan Groups to the Class
M-6 Certificates, the Class M-6 Current Interest;
(viii) from the Interest Funds for both Loan Groups to the Class
M-7 Certificates, the Class M-7 Current Interest;
(ix) from the Interest Funds for both Loan Groups to the Class
M-8 Certificates, the Class M-8 Current Interest;
(x) from the Interest Funds for both Loan Groups to the Class B
Certificates, the Class B Current Interest; and
(xi) any remainder, as part of the Excess Cashflow.
(b) On each Distribution Date on or prior to the related Corridor
Contract Termination Date, amounts received in respect of the Corridor Contracts
for such Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each applicable Class of Certificates (other than the Class A-R
Certificates and Class P Certificates) pursuant to Section 4.04(e)(iv);
provided, however, that if the Corridor Contracts are subject to early
termination, early termination payments shall be held by the Trustee until the
related Corridor Contract Termination Date and deposited in the Carryover
Reserve Fund, as necessary, to pay any Net Rate Carryover as provided in Section
3.19.
(c) Upon the earlier of (a) the exercise of the Optional Termination by
the holder of the Class C Certificates or 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 until
such Principal Distribution Amount has been fully distributed:
(i) with respect to any Distribution Date prior to the Stepdown
Date or as to which a Trigger Event is in effect:
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(A) concurrently, (i) from the Principal Distribution
Amount for Loan Group 1, sequentially, (a) to the Class A-R
Certificates until the Certificate Principal Balance thereof
is reduced to zero and, (b) pro rata, to the Class 1-A-1
Certificates and Class 1-A-2 Certificates, until the
Certificate Principal Balance of each such Class is reduced to
zero and (ii) from the Principal Distribution Amount for Loan
Group 2, sequentially, to the Class 2-A-1, Class 2-A-2, and
Class 2-A-3 Certificates, in that order, until the Certificate
Principal Balance of each such Class is reduced to zero;
provided, however, that if (i) the aggregate Certificate
Principal Balance of the Senior Certificates is greater than
the aggregate Stated Principal Balance of the Mortgage Loans
and (ii) the aggregate Certificate Principal Balance of the
Class 2-A Certificates is greater than the Stated Principal
Balance of the Mortgage Loans in Loan Group 2, the
distributions on the Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates will be made concurrently on a pro rata basis;
provided, further, however, that (x) after the Certificate
Principal Balances of the Class 1-A Certificates have been
reduced to zero, the Principal Distribution Amount remaining
from both Loan Groups will be applied to the Class 2-A-1,
Class 2-A-2, and Class 2-A-3 Certificates, on a pro rata
basis, until the Certificate Principal Balance of each such
Class is reduced to zero and (y) after the Certificate
Principal Balances of the Class 2-A Certificates have been
reduced to zero, the Principal Distribution Amount remaining
from both Loan Groups will be applied to the Class 1-A-1
Certificates and Class 1-A-2 Certificates, on a pro rata
basis, until the Certificate Principal Balance of each such
Class is reduced to zero;
(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;
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(H) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-7 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(I) the remaining Principal Distribution Amount for
both Loan Groups, to the Class M-8 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(J) 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
(K) any remainder, as part of the Excess Cashflow.
(ii) with respect to each Distribution Date on and after the
Stepdown Date and as to which a Trigger Event is not in effect:
(A) concurrently, (i) the Class 1-A Principal
Distribution Amount will be distributed to the Class 1-A-1
Certificates and Class 1-A-2 Certificates, pro rata, until the
Certificate Principal Balance of each such Class is reduced to
zero and (ii) the Class 2-A Principal Distribution Amount will
be distributed sequentially, to the Class 2-A-1, Class 2-A-2,
and Class 2-A-3 Certificates, in that order, until the
Certificate Principal Balance of each such Class is reduced to
zero; provided, however, that if (i) the aggregate Certificate
Principal Balance of the Senior Certificates is greater than
the aggregate Stated Principal Balance of the Mortgage Loans
and (ii) the aggregate Certificate Principal Balance of the
Class 2-A Certificates is greater than the Stated Principal
Balance of the Mortgage Loans in Loan Group 2, the
distributions on the Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates will be made concurrently on a pro rata basis;
provided, further however, that (x) after the Certificate
Principal Balances of the Class 1-A Certificates have been
reduced to zero, the remaining Class 1-A Principal
Distribution Amount will be applied to the Class 2-A-1, Class
2-A-2 and Class 2-A-3 Certificates concurrently, on a pro rata
basis after giving effect to payments made pursuant to clause
(A)(ii) above, until the Certificate Principal Balance of each
such Class is reduced to zero and (y) after the Certificate
Principal Balances of the Class 2-A Certificates have been
reduced to zero, the remaining Class 2-A Principal
Distribution Amount will be applied to the Class 1-A-1
Certificates and Class 1-A-2 Certificates concurrently, on a
pro rata basis after giving effect to payments made pursuant
to clause (A)(i) above, until the Certificate Principal
Balance of each such Class is reduced to zero;
(B) to the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(C) to the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
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(D) to the Class M-3 Certificates, the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(E) to the Class M-4 Certificates, the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(F) to the Class M-5 Certificates, the Class M-5
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(G) to the Class M-6 Certificates, the Class M-6
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(H) to the Class M-7 Certificates, the Class M-7
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(I) to the Class M-8 Certificates, the Class M-8
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
(G) to the Class B Certificates, the Class B
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero; and
(H) any remainder, as part of the Excess Cashflow.
(e) With respect to any Distribution Date, any Excess Cashflow and each
Corridor Contract Payment Amount will be paid to the Classes of Certificates,
after payment of the Seller Shortfall Interest Requirement, if any, as follows:
(i) from Excess Cashflow from both Loan Groups, to the holders of
the Class or Classes of Offered Certificates (other than the Class A-R
Certificates) then entitled to receive distributions in respect of
principal, in an amount equal to the Extra Principal Distribution
Amount, payable to such holders as part of the Principal Distribution
Amount pursuant to Section 4.04(d) above
(ii) from any remaining Excess Cashflow from both Loan Groups,
sequentially to the holders of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B
Certificates, in that order, in an amount equal to any Interest Carry
Forward Amount for each such Class;
(iii) from any remaining Excess Cashflow from both Loan Groups,
sequentially to the holders of the Class 1-A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
Class B Certificates, in that order, in an amount equal to the Unpaid
Realized Loss Amounts for each such Class;
(iv) (a) from the Class 1-A Corridor Contract Payment Amount, to
the Class 1-A-1 Certificates and Class 1-A-2 Certificates, on a pro
rata basis, based on the Certificate Principal Balances thereof, to the
extent needed to pay any related Net Rate Carryover for each such
Class; provided that any Class 1-A Corridor Contract Payment Amount
remaining after such allocation to pay Net Rate Carryover based on the
Certificate
102
Principal Balances of these Certificates will be distributed to each
such Class of Certificates with respect to which there remains any
unpaid Net Rate Carryover (after the distribution based on Certificate
Principal Balances), pro rata, based on the amount of such unpaid Net
Rate Carryover, until reduced to zero, (b) from the Class 2-A Corridor
Contract Payment Amount, to the Class 2-A-1, Class 2-A-2, and Class
2-A-3 Certificates, on a pro rata basis, based on the Certificate
Principal Balances thereof, to the extent needed to pay any related
Net Rate Carryover for each such Class; provided that any Class 2-A
Corridor Contract Payment Amount remaining after such allocation to
pay Net Rate Carryover based on the Certificate Principal Balances of
these Certificates will be distributed to each such Class of
Certificates with respect to which there remains any unpaid Net Rate
Carryover (after the distribution based on Certificate Principal
Balances), pro rata, based on the amount of such unpaid Net Rate
Carryover, until reduced to zero, and (c) from the Subordinated
Corridor Contract Payment Amount, to the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B
Certificates, on a pro rata basis, based on the Certificate Principal
Balances thereof, to the extent needed to pay any related Net Rate
Carryover for each such Class; provided that any Subordinated Corridor
Contract Payment Amount remaining after such allocation to pay Net
Rate Carryover based on the Certificate Principal Balances of these
Certificates will be distributed to each such Class of Certificates
with respect to which there remains any unpaid Net Rate Carryover
(after the distribution based on Certificate Principal Balances), pro
rata, based on the amount of such unpaid Net Rate Carryover, until
reduced to zero;
(v) from any remaining Excess Cashflow from both Loan Groups and
any remaining Corridor Contract Payment Amounts as provided in clause
(iv) above, to the Class 1-A-1, Class 1-A-2, Class 2-A-1, Class 2-A-2,
Class 2-A-3, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class B Certificates, on a pro
rata basis, based on the Certificate Principal Balances thereof, to
the extent needed to pay any remaining Net Rate Carryover for each
such Class; provided that any amounts remaining after such allocation
to pay Net Rate Carryover based on the Certificate Principal Balances
of these Certificates will be distributed to each such Class of
Certificates with respect to which there remains any unpaid Net Rate
Carryover (after the distribution based on Certificate Principal
Balances), pro rata, based on the amount of such unpaid Net Rate
Carryover, until reduced to zero
(vi) from any remaining Excess Cashflow from both Loan Groups, to
the Class C Certificates, (x) the Current Interest for such Class and
(y) any remaining Excess Cashflow shall be paid to the Class C
Certificates;
(vii) from any remaining Excess Cashflow from both Loan Groups
and any remaining Corridor Contract Payment Amount, if (x) the related
Corridor Contract has not been terminated or (y) on any Distribution
Date on or after the related Corridor Contract Termination Date, to
the Class C Certificates; and
(viii) any remaining Excess Cashflow from both Loan Groups, to
the Class A-R Certificates.
103
(f) On each Distribution Date, all Prepayment Charges (including
amounts deposited in connection with the full or partial waiver of such
Prepayment Charges pursuant to Section 3.20) shall be distributed to the Class P
Certificates.
(g) To the extent that a Class of Certificates (other than the Class
A-R, Class C and Class P Certificates) receives interest in excess of the Net
Rate Cap, such interest shall be treated as having been paid to the Carryover
Reserve Fund and then paid by the Carryover Reserve Fund to such
Certificateholders.
(h) [reserved]
(i) On each Distribution Date, the Trustee shall allocate the Applied
Realized Loss Amount to reduce the Certificate Principal Balances of the
Subordinate Certificates and Class 1-A-2 Certificates in the following order of
priority:
(i) to the Class B Certificates until the Class B Certificate
Principal Balance is reduced to zero;
(ii) to the Class M-8 Certificates until the Class M-8
Certificate Principal Balance is reduced to zero;
(iii) to the Class M-7 Certificates until the Class M-7
Certificate Principal Balance is reduced to zero;
(iv) to the Class M-6 Certificates until the Class M-6
Certificate Principal Balance is reduced to zero;
(v) to the Class M-5 Certificates until the Class M-5 Certificate
Principal Balance is reduced to zero;
(vi) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero;
(vii) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(viii) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero;
(ix) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero; and
(x) with respect to Realized Losses on the Mortgage Loans in Loan
Group 1 only, to the Class 1-A-2 Certificates until the Class 1-A-2
Certificate Principal Balance is reduced to zero.
(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
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preceding Record Date either by wire transfer in immediately available funds to
the account of such holder at a bank or other entity having appropriate
facilities therefor, if (i) such Holder has so notified the Trustee at least 5
Business Days prior to the related Record Date and (ii) such Holder shall hold
Regular Certificates with aggregate principal denominations of not less than
$1,000,000 or evidencing a Percentage Interest aggregating 10% or more with
respect to such Class or, if not, by check mailed by first class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register. Notwithstanding the foregoing, but subject to Section 9.02 hereof
respecting the final distribution, distributions with respect to Certificates
registered in the name of a Depository shall be made to such Depository in
immediately available funds.
On or before 5:00 p.m. Pacific time on the fifth Business Day following
each Determination Date (but in no event later than 5:00 p.m. Pacific time on
the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall not 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;
105
(vii) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period;
(viii) with respect to the November 2004 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) [reserved];
(xii) the number and aggregate principal amounts of Mortgage
Loans in each Loan Group: (A) Delinquent (exclusive of Mortgage Loans
in foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or
more days, and (B) in foreclosure and Delinquent (1) 30 to 59 days,
(2) 60 to 89 days and (3) 90 or more days, in each case as of the
close of business on the last day of the calendar month preceding such
Distribution Date;
(xiii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month in each Loan Group, the
loan number and Stated Principal Balance of such Mortgage Loan;
(xiv) and the aggregate Stated Principal Balances of any Mortgage
Loans converted to REO Properties as of the close of business on the
Determination Date preceding such Distribution Date;
(xv) the aggregate Stated Principal Balances of all Liquidated
Loans;
(xvi) with respect to any Liquidated Loan in each Loan Group, the
loan number and Stated Principal Balance relating thereto;
(xvii) whether a Trigger Event is in effect;
(xviii) any Net Rate Carryover paid on each Class of Certificates
(other than the Class A-R, Class C and Class P Certificates) and any
remaining Net Rate Carryover remaining on each Class of Certificates
(other than the Class A-R, Class C and Class P Certificates) on such
Distribution Date;
(xix) the amount of Prepayment Charges collected or waived by the
Master Servicer;
(xx) [reserved];
(xxi) [reserved]; and
(xxii) the amount, if any, due, and the amount received under
each Cap Contract for such Distribution Date.
106
(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 ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class A-R Certificates the Form 1066 and each Form
1066Q and shall respond promptly to written requests made not more frequently
than quarterly by any Holder of Class A-R Certificates with respect to the
following matters:
(i) The original projected principal and interest cash flows on
the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as
of the end of any calendar quarter with respect to each related Class
of regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest
cash flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the
end of such calendar quarter with respect to each related Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the related
REMIC with respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
related REMIC; and
(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.
107
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 [Reserved]
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund. The Carryover Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement.
(b) The Trustee shall make withdrawals from the Carryover Reserve Fund
to make distributions of amounts payable from each Corridor Contract to the
related Certificates pursuant to paragraph (e) of Section 4.04 hereof. Any
amounts remaining after the distributions required pursuant to preceding
sentence shall be distributed to the Class C Certificates; provided, however,
that if a Corridor Contract is subject to early termination, early termination
payments received on such Corridor Contract will be held by the Trustee until
the related Corridor Contract Termination Date and deposited in the Carryover
Reserve Fund as necessary to cover any Net Rate Carryover on the Certificates
entitled thereto on future Distribution Dates.
(c) Funds in the Carryover Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be payable to the Class C
Certificates. The Class C Certificates shall evidence ownership of the Carryover
Reserve Fund for federal tax purposes and the Holders thereof evidencing not
less than 50% of the Voting Rights of such Class shall direct the Trustee in
writing as to the investment of amounts therein. In the absence of such written
direction, all funds in the Carryover Reserve Fund shall be invested by the
Trustee in The Bank of New York cash reserves.
(d) Upon termination of the Trust Fund, any amounts remaining in the
Carryover Reserve Fund shall be distributed to the Holders of the Class C
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.
Section 4.09 Distributions on the REMIC I Regular Interests.
(a) (1)(A) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class AR Certificates (in respect
of the Class R-I Interest), as the case may be:
(i) first, (a) to Holders of REMIC I Regular Interest LT-AA,
REMIC Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC
I Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I
Regular Interest LT-2A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC Regular Interest LT-M3, REMIC Regular
Interest LT-M4, REMIC Regular Interest LT-M5, REMIC 1
108
REGULAR Interest LT-M6, REMIC 1 Regular Interest LT-M7, REMIC 1
Regular Interest LT-M8, REMIC Regular Interest LT-B, REMIC I Regular
Interest LT-ZZ, REMIC I Regular Interest LT-P and REMIC I Regular
Interest LT-R, pro rata, in an amount equal to (A) the Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates.
Amounts payable as Uncertificated Accrued Interest in respect of REMIC
I Regular Interest LT-ZZ shall be reduced and deferred when the REMIC
I Overcollateralized Amount is less than the REMIC I
Overcollateralization Target Amount, by the lesser of (x) the amount
of such difference and (y) the REMIC I Regular Interest LT-ZZ Maximum
Interest Deferral Amount and such amount will be payable to the
Holders of REMIC Regular Interest LT-1A1, REMIC I Regular Interest
LT-1A2, REMIC I Regular Interest LT-2A1, REMIC I Regular Interest
LT-2A2, REMIC Regular Interest LT-2A3, REMIC I Regular Interest LT-M1,
REMIC I Regular Interest LT-M2, REMIC Regular Interest LT-M3, REMIC
Regular Interest LT-M4, REMIC Regular Interest LT-M5, REMIC 1 REGULAR
Interest LT-M6, REMIC 1 Regular Interest LT-M7, REMIC 1 Regular
Interest LT-M8 and REMIC Regular Interest LT-B in the same proportion
as the Overcollateralization Increase Amount is allocated to the
Corresponding Certificates and the Uncertificated Principal Balance of
REMIC I Regular Interest LT-ZZ shall be increased by such amount; and
(b) to Holders of REMIC I Regular Interest LT-1SUB, REMIC I Regular
Interest LT-1GRP, REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest
LT-2GRP and REMIC I Regular Interest LT-XX, pro rata, in an amount equal to (A)
the Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution Dates
(i) second, to the Holders of REMIC I Regular Interests, in an
amount equal to the remainder of the REMIC I Marker Allocation
Percentage of Available Funds for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
(a) 98.00% of such remainder (other than amounts payable under
clause (c) below), to the Holders of REMIC I Regular Interest LT-AA and
REMIC I Regular Interest LT-P, until the Uncertificated Principal
Balance of such REMIC I Regular Interest is reduced to zero, provided,
however, that REMIC I Regular Interest LT-P shall not be reduced until
the Distribution Date immediately following the expiration of the
latest Prepayment Charge as identified on the Prepayment Charge
Schedule or any Distribution Date thereafter, at which point such
amount shall be distributed to REMIC I Regular Interest LT-P, until
$100 has been distributed pursuant to this clause;
(b) 2.00% of such remainder first, to the Holders of REMIC I
Regular Interest LT-1A1, REMIC I Regular Interest LT-1A2, REMIC I
Regular Interest LT-2A1, REMIC I Regular Interest LT-2A2, REMIC I
Regular Interest LT-2A, REMIC I Regular Interest LT-M1, REMIC I Regular
Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular
Interest LT-M4, REMIC I Regular Interest LT-M5, REMIC 1 REGULAR
Interest LT-M6, REMIC 1 Regular Interest LT-M7, REMIC 1 Regular
Interest LT-M8 and REMIC Regular Interest LT-B, 1.00% in the same
proportion as principal payments
109
are allocated to the Corresponding Certificates, until the
Uncertificated Principal Balances of such REMIC I Regular Interests
are reduced to zero and second, to the Holders of REMIC I Regular
Interest LT-ZZ, until the Uncertificated Principal Balance of such
REMIC I Regular Interest is reduced to zero; then
(c) any remaining amount to the Holders of the Class AR
Certificates (in respect of the Class R-I Interest); and
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of (i) REMIC I Regular Interest LT-AA and REMIC I Regular Interest
LT-P, in that order and (ii) REMIC I Regular Interest LT-ZZ, respectively;
provided that REMIC I Regular Interest LT-P shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest LT-P, until $100 has been distributed pursuant to this clause.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
will be distributed by REMIC I to the Holders of REMIC I Regular Interest LT-P.
The payment of the foregoing amounts to the Holders of REMIC I Regular Interest
LT-P shall not reduce the Uncertificated Principal Balance thereof.
(ii) third, to the Holders of REMIC I Regular Interests, in an
amount equal to the remainder of the REMIC I Sub WAC Allocation
Percentage of Available Funds for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
(a) Distributions of principal shall be deemed to be made to the
REMIC I Regular Interests first, so as to keep the Uncertificated
Principal Balance of each REMIC I Regular Interest ending with the
designation "GRP" equal to 0.01% of the aggregate Stated Principal
Balance of the Mortgage Loans in the related Group; second, to each
REMIC I Regular Interest ending with the designation "SUB," so that
the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Stated
Principal Balance of the Mortgage Loans in the related Group over (y)
the Certificate Principal Balance of the Class A Certificate in the
related Group (except that if any such excess is a larger number than
in the preceding distribution period, the least amount of principal
shall be distributed to such REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any
remaining principal to REMIC I Regular Interest LT-XX.
(b) Notwithstanding the distributions described in this Section
4.09, distribution of funds shall be made only in accordance with
Section 4.04.
Section 4.10 [Reserved].
Section 4.11 Allocation of Realized Losses on the REMIC I Regular
Interests.
110
(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 M8 and
REMIC I Regular Interest LT ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT M8 has been
reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I
Regular Interest LT AA, REMIC I Regular Interest LT M7 and REMIC I Regular
Interest LT ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT M7 has been reduced to zero; sixth, 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; seventh 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; eighth 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; ninth 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; tenth to the Uncertificated Principal
Balances of REMIC I Regular Interest LT AA, REMIC I Regular Interest LT M2 and
REMIC I Regular Interest LT ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT M2 has been
reduced to zero; and eleventh 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
111
such that the REMIC I Subordinated Balance Ratio is maintained); and third, any
remaining Realized Losses shall be allocated to REMIC I Regular Interest LT-XX.
Section 4.12 The Class P Certificates.
On the Closing Date, $100 shall be deposited into the Class P
Distribution Account and shall be held in trust for the benefit of the Class P
Certificateholders for payment pursuant to Section 4.04 upon the earlier of (a)
the exercise of the Optional Termination by the holders of the Class C
Certificates or the Master Servicer pursuant to Section 9.01 and (b) the Class P
Principal Distribution Date. Such funds may not be invested.
112
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-8, B, C and D. The Certificates shall be issuable in
registered form, in the minimum dollar denominations, integral dollar multiples
in excess thereof and aggregate dollar denominations as set forth in the
following table:
Integral Multiples in Original Certificate Principal
Class Minimum Denomination Excess of Minimum Balance
----- -------------------- ----------------- -------
1-A-1 $20,000 $1,000 $564,755,000.00
1-A-2 $20,000 $1,000 $56,475,000.00
2-A-1 $20,000 $1,000 $73,107,000.00
2-A-2 $20,000 $1,000 $113,646,000.00
2-A-3 $20,000 $1,000 $31,517,000.00
A-R $99.95(1) N/A $100.00
M-1 $20,000 $1,000 $45,500,000.00
M-2 $20,000 $1,000 $22,500,000.00
M-3 $20,000 $1,000 $11,500,000.00
M-4 $20,000 $1,000 $12,000,000.00
M-5 $20,000 $1,000 $11,500,000.00
M-6 $20,000 $1,000 $10,000,000.00
M-7 $20,000 $1,000 $12,500,000.00
M-8 $20,000 $1,000 $7,500,000.00
B $20,000 $1,000 $7,500,000.00
C 20% 1% $0.00
P 20% 1% $100.00
(1) The Tax Matters Person Certificate may be issued in a denomination
of $0.05.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached
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hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.09 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
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
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Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee 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 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 representation from the transferee of such Certificates that (A)
it has acquired and is holding such Certificate in reliance on the Underwriters'
Exemption and that it understands that there are certain conditions to the
availability of the Underwriters' Exemption, including that the Certificate must
be rated, at the time of purchase, not less than "BBB-" or its equivalent by one
of the Rating Agencies or (B) the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and the conditions of Sections
I and III of PTCE 95-60 have been satisfied or (iii) in the case of the Class C
Certificates or the Class P Certificates if such Certificates have been offered
in a placement or underwriting which meets the requirements of the Underwriter's
Exemption, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in or "insurance company
general account" (as such term is defined in Section V(e) of PTCE 95-60) and the
conditions of sections I and III of PTCE 95-60 have been satisfied, or 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,
or (iv) an opinion of counsel satisfactory to the Trustee, for the benefit of
the Trustee, the Seller, the Depositor 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-
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exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code and will not subject the Depositor, the Seller, the Master Servicer or
Trustee to any obligation, or liability (including liabilities or obligations
under ERISA or Section 4975 of the Code) in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the preceding
sentence, with respect to an ERISA-Restricted Certificate that is not a
Book-Entry Certificate or a Class A-R Certificate, in the event the
representation letter referred to in the preceding sentence is not so furnished,
such representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of such
ERISA-Restricted Certificate. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate or a
Subordinate Certificate to or on behalf of an employee benefit plan subject to
ERISA or the Code other than as described above shall be void and of no effect.
Any purported beneficial owner whose acquisition or holding of the Certificate
or interest therein was effected in violation of the conditions described in
this paragraph shall indemnify and hold harmless the Depositor, the Trustee, the
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
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Ownership Interest in a Class A-R Certificate to any other Person if
it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in
fact not permitted by Section 5.02(b) and this Section 5.02(c) or for
making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit, Transferor
Certificate and either the Rule 144A Letter or the Investment Letter.
The Trustee shall be entitled but not obligated to recover from any
Holder of a Class A-R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time
as it became other than a Permitted Transferee, all payments made on
such Class A-R Certificate at and after either such time. Any such
payments so recovered by the Trustee shall be paid and delivered by
the Trustee to the last preceding Permitted Transferee of such
Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code
as a result of a Transfer of an Ownership Interest in a Class A-R
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Seller or
the Master Servicer, to the effect that the elimination of such restrictions
will not cause any REMIC hereunder to fail to qualify as a REMIC at any time
that the Certificates are outstanding or result in the imposition of any tax on
the Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Class A-R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Class A-R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all representation letters and
opinions referred to above in this Section 5.02 in connection with any Transfers
shall be at the expense of the parties to such Transfers.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
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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.
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
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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.
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.
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If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor or (b) after the occurrence
and continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository 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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ 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 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
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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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for
persons performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ 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
(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 for any
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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 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
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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 ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer (other than liabilities of
the Master Servicer under Section 6.03 hereof incurred prior to termination of
the Master Servicer under Section 7.01), with like effect as if originally named
as a party to this Agreement; and provided further that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior to
such assignment and delegation will not be qualified or reduced as a result of
such assignment and delegation. No appointment of a successor to the Master
Servicer hereunder shall be effective until the Trustee shall have consented
thereto, and written notice of such proposed appointment shall have been
provided by the Trustee to each Certificateholder. The Trustee shall not resign
as servicer until a successor servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 3.04 hereof, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give notice to
the Mortgagors of such change of servicer and shall, during the term of its
service as servicer maintain in force the policy or policies that the Master
Servicer is required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to
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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
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable, individually or as Trustee,
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as Trustee, for
an error of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless the Trustee was grossly negligent or acted in
bad faith or with willful misfeasance;
(iii) the Trustee shall not be liable, individually or as Trustee, with
respect to any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class relating to the
time, method and place of conducting any proceeding for any remedy
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available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement; and
(vi) without in any way limiting the provisions of this Section 8.01 or
Section 8.02 hereof, the Trustee shall be entitled to rely conclusively on the
information delivered to it by the 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 or
actual knowledge of a Responsible Officer of the Trustee that (A) such Advance
was not made by the Master Servicer and (B) that such Advance is not a
Nonrecoverable Advance.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by
Holders of each Class of Certificates evidencing not less than 25% of
the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents, accountants or attorneys;
(vi) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than in its commercial capacity as issuer of the
investment security);
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(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that may be incurred therein or
thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document or of MERS or the MERS(R) System other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any funds paid to the Depositor or the Master Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Certificate Account by
the Depositor or the Master Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer,
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employee or agent of the Trustee shall be indemnified by the Master Servicer and
held harmless against any loss, liability or expense (i) incurred in connection
with any legal action relating to this Agreement or the Certificates, or in
connection with the performance of any of the Trustee's duties hereunder, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of any of the Trustee's duties
hereunder or by reason of reckless disregard of the Trustee's obligations and
duties hereunder and (ii) resulting from any error in any tax or information
return prepared by the Master Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the 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
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receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Master Servicer and one
copy of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Master Servicer
one complete set to the Trustee so removed and one complete set to the successor
so appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor trustee
and the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
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
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to which the Trustee shall be a party, or any corporation succeeding to
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Master Servicer, shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(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.
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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 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
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(including a broker, nominee or other middleman) of a Non-Permitted Transferee,
or a pass-through entity in which a Non-Permitted Transferee is the record
holder of an interest (the reasonable cost of computing and furnishing such
information may be charged to the Person liable for such tax); (f) to the extent
that they are under its control conduct the affairs of the Trust Fund at all
times that any Certificates are outstanding so as to maintain the status of each
REMIC created hereunder as a REMIC under the REMIC Provisions; (g) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any REMIC created hereunder; (h) pay, from
the sources specified in the last paragraph of this Section 8.11, the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on any REMIC created hereunder prior to the termination
of the Trust Fund when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings); (i) sign or cause to be signed federal, state or
local income tax or information returns; (j) maintain records relating to each
REMIC created hereunder, including but not limited to the income, expenses,
assets and liabilities of each such REMIC, and the fair market value and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC created hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of the
Trust Fund, and otherwise act on behalf of any REMIC created hereunder in
relation to any tax matter involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors, omissions or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
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
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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-5 Certificates (pro rata), third, to the Class M-4 Certificates (pro
rata), fourth, to the Class M-3 Certificates (pro rata), fifth, to the Class M-2
Certificates (pro rata), sixth, to the Class M-1 Certificates (pro rata), and
seventh, to the Class 1-A Certificates (pro rata) and Class 2-A Certificates
(pro rata). Notwithstanding anything to the contrary contained herein, to the
extent that such tax is payable by the Class A-R Certificates, the Trustee is
hereby authorized to retain on any Distribution Date, from the Holders of the
Class A-R Certificates (and, if necessary, second, from the Holders of the all
other Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.
The Trustee shall treat the rights of the Class 1-A-1, Class 1-A-2,
Class 2-A-1, Class 2-A-2, Class 2-A-3, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B Certificateholders
to receive payments from the Carryover Reserve Fund as rights in an interest
rate cap contracts written by the Corridor Contract Counterparty with respect to
the Net Rate Carryover funded by the Corridor Contracts and Excess Cashflow, in
favor of the Certificateholders (other than the Holders of the Class A-R, Class
C and Class P Certificates). Thus, each Certificate (other than the Class A-R,
Class C and Class P Certificates) shall be treated as representing ownership of
not only REMIC II Regular Interests, but also ownership of an interest in an
interest rate cap contract. For purposes of determining the issue price of the
REMIC II Regular Interests, the Trustee shall assume that the Class I-A Corridor
Contract, the Class 2-A Corridor Contract and Subordinated Corridor Contract
have values of $429,000, $223,500 and $197,000 respectively.
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ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Seller and the Trustee created hereby shall terminate upon the earlier of (a)
(i) the surrender of a majority of the Class C Certificateholders of their
interests to the Trustee causing the Trustee to liquidate the assets of the
Trust Fund by selling them for at least the aggregate Stated Principal Balance
of the Mortgage Loans plus interest at the related Mortgage Rate, or 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 plus one month's
accrued interest thereon at the applicable Mortgage Rate less the Servicing Fee
Rate, (ii) the lesser of (x) the appraised value of any REO Property as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Master Servicer at the expense of the Master Servicer
and (y) the Stated Principal Balance of each Mortgage Loan related to any REO
Property and (iii) any remaining unpaid costs and damages incurred by the Trust
Fund that arises out of a violation of any predatory or abusive lending law that
also constitutes an actual breach of representation (xxxiv) of Section 2.03
hereof and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the Court of St. ▇▇▇▇▇', living on the date hereof and (ii) the Latest Possible
Maturity Date.
(b) The right to cause the Trustee to liquidate the assets of the Trust
Fund and the purchase of all Mortgage Loans and REO Properties by the holders of
the Class C Certificates or the Master Servicer (the party exercising such
purchase option, the "Terminating Party") pursuant to clause (a) above (such
right, the "Option") shall be conditioned upon the Stated Principal Balance of
the Mortgage Loans at the time of any such repurchase, aggregating ten percent
(10%) or less of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
(c) The holders of a majority of the Percentage Interests of the Class
C Certificates may exercise the Option on any distribution date on or after the
first Distribution Date on which the Stated Principal Balance of the Mortgage
Loans aggregates ten percent (10%) or less of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date. If the holders of a
majority of the Class C Certificates do not exercise the Option on any such
Distribution Date, the Master Servicer shall have the right to exercise the
Option on such Distribution Date.
Section 9.02 Final Distribution on the Certificates.
136
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 Terminating Party elects to
terminate the Trust Fund pursuant to Section 9.01, at least 5 days prior to the
date notice is to be mailed to the Certificateholders, such electing party shall
notify the Depositor and the Trustee of the date such electing party intends to
terminate the Trust Fund and of the applicable repurchase price of the related
Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month of such
final distribution. Any such notice shall specify (a) the Distribution Date upon
which final distribution on related Certificates will be made upon presentation
and surrender of such Certificates at the office therein designated, (b) the
amount of such final distribution, (c) the location of the office or agency at
which such presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of such Certificates at the
office therein specified. The 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. Upon such final deposit and the receipt by the Trustee of a
Request for Release therefor, the Trustee shall promptly release to the
Terminating Party 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 Class the
amounts allocable to such Certificates held in the Distribution Account (and, if
applicable, the Carryover Reserve Fund) in the order and priority set forth in
Section 4.04 hereof on the final Distribution Date and in proportion to their
respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
related Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
137
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 Terminating Party exercises the Option, 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 Terminating Party, 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 Terminating Party 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 Terminating Party 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 Terminating Party;
(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 Terminating Party to specify the 90 day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) The Trustee as agent for each REMIC created hereunder hereby agrees
to adopt and sign such a plan of complete liquidation upon the written request
of the Terminating Party, 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 Terminating Party.
138
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Seller and the Trustee, without the consent of any of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, to make such other provisions with respect to matters or
questions arising under this Agreement, as shall not be inconsistent with any
other provisions herein or to give effect to the expectations of the investors
if such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of Certificateholders representing not
less than 51% of the Voting Rights of each Class of Certificates affected by
such amendment.
The Trustee, the Depositor, the Master Servicer and the Seller may also
at any time and from time to time amend this Agreement, without the consent of
the Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of the Trust Fund as a REMIC under the Code or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such opinion
but in any case shall not be an expense of the Trustee, to the effect that such
action is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Seller and the Trustee and the Holders of each Class of
Certificates adversely affected thereby evidencing not less than a majority
Percentage Interest of the Voting Rights of such Class for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided that no such amendment pursuant to this paragraph shall
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing 66%
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or more of the Voting Rights of such Class, or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
140
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement (within the
meaning of the Uniform Commercial Code of the State of New York) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03, 2.04 and 3.12; and
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
141
(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.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇, with a
copy to the same address, Attention: Legal Department; (ii) in the case of the
Seller, Countrywide Home Loans, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇, 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, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇ 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, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Corporate Trust MBS Administration,
CWABS, Series 2004-BC4, or such other address as the Trustee may hereafter
furnish to the Depositor or the Master Servicer; and (v) in the case of the
Rating Agencies, (y) Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., Attention: Mortgage Surveillance Group, ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (z) Fitch Ratings, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇,
Residential Mortgage, or such other address as may hereinafter be furnished to
the Depositor in writing by Fitch Ratiings. Notices to Certificateholders shall
be deemed given when mailed, first class postage prepaid, to their respective
addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition
142
or winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, the Seller or the Trustee during the
Master Servicer's normal business hours, to examine all the books of account,
records, reports and other papers of the Master Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the Depositor,
the Seller or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby authorizes
such accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Depositor,
the Seller or the Trustee of any right under this Section 10.09 shall be borne
by the party requesting such inspection; all other such expenses shall be borne
by the Master Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
143
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.
* * *
144
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller and
the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CWABS, INC.,
as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Treasurer
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
(solely with respect to its obligations under Section 4.01(b))
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of October, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇▇ ▇▇▇▇▇▇, 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.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Notary Public
147
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of October, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇▇ ▇▇▇▇▇▇, 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.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Notary Public
[Notarial Seal]
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of October, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇▇ ▇▇▇▇▇▇, 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.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Notary Public
[Notarial Seal]
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this 28th day of October, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, personally known to me on the
basis of satisfactory evidence to be a Vice President of The Bank of New York, a
New York banking corporation that executed the within instrument, and also known
to me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Notary Public
[Notarial Seal]
150
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class 1-A-1 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-1
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class 1-A-2 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-2
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class 2-A-1 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-3
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class 2-A-2 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-4
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class 2-A-3 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-5
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class M-1 Certificate as
delivered.
[See appropriate documents delivered at closing]
A-6
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class M-2 Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-7
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class M-3 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-8
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇-▇ is a photocopy
of the Class M-4 Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-9
Exhibit ▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇ is a photocopy
of the Class M-5 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-10
Exhibit ▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇ is a photocopy
of the Class M-6 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-11
Exhibit ▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇ is a photocopy
of the Class M-7 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-12
Exhibit ▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇ is a photocopy
of the Class M-8 Certificate
as delivered.
[See appropriate documents delivered at closing]
A-13
Exhibit ▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇ is a photocopy
of the Class B Certificates
as delivered.
[See appropriate documents delivered at closing.]
A-14
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]
B-2
Exhibit D-1
Exhibit D-1 is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing]
C-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 October
1, 2004, among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer and The Bank of New
York, as Trustee, relating to the Asset-Backed
Certificates, Series 2004-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 October
1, 2004, among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer and The Bank of New
York, as Trustee, relating to the Asset-Backed
Certificates, Series 2004-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;
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-
G-2-1
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 October 1, 2004, without recourse", or,
in the case of each Mortgage Loan with respect to property
located in the State of California that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage in blank
(each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of
and transfer to the assignee thereof, under the Mortgage to
which such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such Mortgage [(noting the presence of a MIN in the case of
each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto
or, in the event such original title policy has not been
received from the insurer, any one of an original title
binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title
company, with the original policy of title insurance to be
delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
G-2-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:
-------------------------------
Name:
Title:
G-2-3
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement, dated as of October
1, 2004 (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 Bank of New
York, as Trustee, relating to the Asset-Backed
Certificates, - Series 2004-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:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to the
Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related
Mortgage Note; and
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-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
October 1, 2004, without recourse", or, in the case of each
Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and
G-3-1
sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment
relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------
Name:
Title:
G-3-2
EXHIBIT G-4
[RESERVED]
G-4
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement, dated as of October
1, 2004 (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 Bank of New
York, as Trustee, relating to the Asset-Backed
Certificates, Series 2004-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;
H-1
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-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
October 1, 2004, without recourse", or, in the case of each
Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment
relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such Mortgage [(noting the presence of a MIN in the case of
each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto
or any one of an original title binder, an original
preliminary title report or an original title commitment, or a
copy thereof certified by the title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xiii) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
H-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:
-------------------------------
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of __________, the proposed
transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of October 1, 2004 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as Seller, Countrywide Home
Loans Servicing LP, as Master Servicer and The Bank of New York, as Trustee.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The transferee has
authorized the undersigned to make this affidavit on behalf of the transferee.
2. Either (a) the transferee is not an employee benefit plan that
is subject to Section 406 of ERISA or to section 4975 of the Internal Revenue
Code of 1986, nor is it acting on behalf of or with plan assets of any such
plan, or (b) the transferee has provided the opinion of counsel specified in
Section 5.02(b) of the Agreement. The transferee is, as of the date hereof, and
will be, as of the date of the Transfer, a Permitted Transferee. The transferee
is acquiring its Ownership Interest in the Certificate for its own account.
3. The transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent transferee furnished to such Person an affidavit that
such subsequent transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a
I-1
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives and, except as
may be provided in Treasury Regulations, persons holding interests in
pass-through entities as a nominee for another Person.)
5. The transferee has reviewed the provisions of Section 5.02(c)
of the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the transferee contemplated hereby null and void.
6. The transferee agrees to require a Transfer Affidavit from any
Person to whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I to the Agreement (a "Transferor Certificate") to the
effect that such transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Class A-R Certificates.
8. The transferee's taxpayer identification number is
__________________.
9. The transferee is a U.S. Person as defined in Code section
7701(a)(30).
10. The transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
11. The transferee has provided financial statements or other
financial information requested by the Transferor in connection with the
transfer of the Class A-R Certificates to permit the Transferor to assess the
financial capability of the transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this __th day of _______, 20__.
[NAME OF TRANSFEREE]
By:
-------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _____________________ of the transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
transferee.
Subscribed and sworn before me this __th day of _______, 20__.
------------------------------------
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-3
EXHIBIT 1
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
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Section 5.02(c) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership Interest in
a Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may
be registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, in addition to the representation letters required to be
delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached
hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall agree (A) to obtain a
Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Class A-R Certificate and (C) not to Transfer its Ownership Interest
in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any
other action with respect to such Holder under the provisions of this
Agreement so long as the Transfer was registered after receipt of the
related Transfer Affidavit, Transferor Certificate and either the Rule
144A Letter or the Investment Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Class A-R Certificate
that was in fact not a Permitted Transferee at the time it became a
Holder or,
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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.
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EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS A-R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed
Certificates, Series 2004-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 October 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of New
York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferor
By:
-------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2004-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 October 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of New
York, as Trustee.
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
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2004-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 provided the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement, (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration
K-1
statement under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
October 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Countrywide Home Loans Servicing LP, as Master Servicer and The Bank
of New York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferee
By:
-------------------------------
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2004-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 provided the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement, (e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the
L-1
Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
October 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Countrywide Home Loans Servicing LP, as Master Servicer and The Bank
of New York, as Trustee.
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which
is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
L-3
___ Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
___ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940.
___ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction.
L-4
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
----------------------------------
Print Name of Buyer
By:
-------------------------------
Name:
Title:
Date:
----------------------------
L-5
ANNEX 2 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the
excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $ in securities (other
than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
L-6
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
---------------------------------
Print Name of Buyer or Adviser
By:
-------------------------------
Name:
Title:
IF AN ADVISER:
----------------------------------
Print Name of Buyer
Date:
-----------------------------
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
Loan Information
----------------
Name of Mortgagor:
------------------------------------------
Master Servicer
Loan No.:
------------------------------------------
Trustee
-------
Name:
------------------------------------------
Address:
------------------------------------------
Trustee
Mortgage File No.:
------------------------------------------
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2004-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 October 1, 2004 (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 Trustee
when the need therefor no longer exists, unless the Mortgage Loan
relating to the Documents has been liquidated and the proceeds thereof
have been remitted to the Certificate Account and except as expressly
provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trust Fund, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
[Master Servicer]
By
-------------------------------
Its
-------------------------------
Date: _________________, ____
M-2
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2004-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
N-1
/ / ASSISTANT VICE PRESIDENT
N-2
Exhibit O
Exhibit O is a photocopy
of the Depository Agreement
as delivered.
[see appropriate documents delivered at closing]
O-1
EXHIBIT P
FORM OF MORTGAGE NOTE AND MORTGAGE
[Provide Upon Request]
P-1
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
FORM OF CAP CONTRACT
DATE: [_________], 2004
TO: Countrywide Home Loans, Inc.
ATTENTION: ▇▇. ▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
FROM: Derivatives Documentation
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: [________]
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 ▇▇▇▇▇▇▇ Financial Products Inc. ("BSFP") and
Countrywide Home Loans, Inc., ("Counterparty"). This Agreement, which evidences
a complete and binding agreement between BSFP and Counterparty 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 and incorporates the 2000 ISDA DEFINITIONS
(the "Definitions"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA"). BSFP and Counterparty 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"). An ISDA Form Master Agreement shall
be deemed to have been executed by BSFP and Counterparty on the date we
entered into the Transaction. All provisions contained in, or
incorporated by reference to, the ISDA Form Master Agreement shall
govern the Transaction referenced in this Confirmation except as
expressly modified herein. 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:
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Type of Transaction: Rate Cap
(i) Notional Amount: With respect to
any Calculation Period, the
amount set forth for such period
in the Schedule of Notional
Amounts and Cap Rates attached
hereto.
Trade Date: [_________], 2004
Effective Date: [_________], 2004
Termination Date: [_______________], subject to
adjustment in accordance with the
Business Day Convention.
FIXED AMOUNT (PREMIUM):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: [_________], 2004
Fixed Amount: [_________]
FLOATING AMOUNTS:
Floating Rate Payer: BSFP
Cap Rate I: As set forth in the Schedule of Notional
Amounts and Cap Rates attached hereto.
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. One
Business Day preceding each Floating Rate
Payer Period End Date.
Floating Amount: To be determined in accordance with the
following formula:
Greater of (i) 100 * (Floating Rate Option -
Cap Rate I) *
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Notional Amount * Floating Rate Day Count
Fraction; and (ii) zero
Floating Rate Option: USD-LIBOR-BBA, provided,
however, that if the Floating Rate
determined from such Floating Rate Option
for any Calculation Period is greater than
Cap Rate II (set forth in the Schedule of
Notional Amounts and Cap Rates Attached
hereto) then the Floating Rate for such
Calculation Period shall be deemed equal to
Cap Rate II.
Designated Maturity: One month
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Business Days for
payments: New York and London
Business Day Convention: Modified Following
3. Additional
Provisions: 1) Each party hereto is hereby advised and
acknowledges that the other party has
engaged in (or refrained from engaging in)
substantial financial transactions and has
taken (or refrained from taking) other
material actions in reliance upon the entry
by the parties into the Transaction being
entered into on the terms and conditions set
forth herein and in the Confirmation
relating to such Transaction, as applicable.
This paragraph (1) shall be deemed repeated
on the trade date of each Transaction.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of
the ISDA Form Master Agreement will apply to any Transaction.
2) TERMINATION PROVISIONS. For purposes of the Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty
for any purpose.
R-3
(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 to Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a)
will not apply to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e)
of this Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
3) Tax Representations. Not applicable
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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 FORM/DOCUMENT/ DATE BY WHICH TO
DELIVER DOCUMENT CERTIFICATE BE DELIVERED
BSFP and Any document required or Promptly after the
the Counterparty reasonably requested to earlier of (i)
allow the other party to reasonable demand by
make payments under this either party or (ii)
Agreement without any learning that such form
deduction or withholding or document is required
for or on the account of
any Tax or with such
deduction or withholding
at a reduced rate
(2) Other documents to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO COVERED BY SECTION
DELIVER DOCUMENT CERTIFICATE BE DELIVERED 3(D) REPRESENTATION
BSFP and Any documents required Upon the execution and Yes
the Counterparty by the receiving party delivery of this Agreement
to evidence the and such Confirmation
authority of the
delivering party or its
Credit Support Provider,
if any, for it
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[TABLE CONTINUED]
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 delivery of this Agreement
the party, as to the and such Confirmation
incumbency 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:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: DPC Manager - Suite 2700
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
R-6
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Derivative Operations - 7th Floor
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(For all purposes)
Address for notices or communications to the Counterparty:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
(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; provided, however,
that if an Event of Default occurs with respect to BSFP, then the
Counterparty shall be entitled to appoint a financial institution which
would qualify as a Reference Market-maker to act as Calculation Agent.
(f) Credit Support Document. Not applicable for either BSFP or the
Counterparty.
(g) Credit Support Provider.
R-7
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.
(m) Set-off. The provisions for Set-off set forth in Section 6(e) of the
ISDA Form Master Agreement shall not apply for purposes of this
Transaction.
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-8
"(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.
(4) Principal. It is entering into the Transaction as
principal, and not as agent or in any other capacity, fiduciary or otherwise."
NEITHER THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE
OF THE BEAR ▇▇▇▇▇▇▇ 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: ▇▇▇-▇▇▇▇-▇▇, for the
account of Bear, ▇▇▇▇▇▇▇
Securities Corp. Account Number:
0925-3186, for further credit to
Bear ▇▇▇▇▇▇▇ Financial Products
Inc. Sub-account Number:
102-04654-1-3 Attention:
Derivatives Department
PAYMENTS TO COUNTERPARTY:
Please provide
R-9
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 ▇▇▇-▇▇▇-▇▇▇▇. For inquiries regarding U.S. Transactions, please
contact ▇▇▇▇▇ ▇▇▇▇▇▇ by telephone at ▇▇▇-▇▇▇-▇▇▇▇. For all other inquiries
please contact DERIVATIVE DOCUMENTATION by telephone at ▇▇▇-▇-▇▇▇-▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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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EXHIBIT S
FORM OF NOVATION AGREEMENT
dated as of [________, 200_] among:
[_______] (the "REMAINING PARTY"),
[_______] (the "TRANSFEROR")
AND
The [_______], not in its individual capacity, but solely as trustee for
[_______] (the "TRANSFEREE") pursuant to a Pooling and Servicing Agreement,
dated and effective as of [_______, 200_], among [_______], as Depositor,
[_______], as seller (the "Seller"), [_______], as master
servicer, and [_______], as trustee (the "POOLING AND SERVICING AGREEMENT").
The Transferor and the Remaining Party have entered into one or more
Transactions as identified in the attached Annex (each an "OLD TRANSACTION"),
each evidenced by a Confirmation (an "OLD CONFIRMATION") attached hereto,
subject to a 1992 ISDA Master Agreement (as defined below) dated as of [_______]
(the "OLD AGREEMENT").
With effect from and including [_______, 200_] (the "NOVATION DATE"), the
Transferor wishes to transfer by novation to the Transferee, and the Transferee
wishes to accept the transfer by novation of, all the rights, liabilities,
duties and obligations of the Transferor under and in respect of each Old
Transaction, with the effect that the Remaining Party and the Transferee enter
into a new transaction (each a "NEW TRANSACTION") between them having terms
identical to those of each Old Transaction, as more particularly described
below, but with the modifications provided for herein.
The Remaining Party wishes to accept the Transferee as its sole counterparty
with respect to the New Transactions.
The Transferor and the Remaining Party wish to have released and discharged, as
a result and to the extent of the transfer described above, their respective
obligations under and in respect of the Old Transactions.
Accordingly, the parties agree as follows: ---
1. DEFINITIONS.
Terms defined in the ISDA Master Agreement (Multicurrency-Cross Border) as
published in 1992 by the International Swaps and Derivatives Association, Inc.,
(the "1992 ISDA MASTER AGREEMENT") are used herein as so defined, unless
otherwise provided herein.
2. TRANSFER, RELEASE, DISCHARGE AND UNDERTAKINGS.
With effect from and including the Novation Date and in consideration of the
mutual representations, warranties and covenants contained in this Novation
Agreement and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged by each of the parties):
(a) the Remaining Party and the Transferor are each released and
discharged from further obligations to each other with respect
to each Old Transaction and their respective rights against
each other thereunder are cancelled, provided that such
release and discharge shall not affect any rights, liabilities
or obligations of the Remaining Party or the Transferor with
respect to payments or other obligations due and payable or
due to be performed on or prior to the Novation Date, and all
such payments and obligations shall be paid or performed by
the Remaining Party or the Transferor in accordance with
S-1
the terms of the Old Transactions; provided further, for the
avoidance of doubt, the Transferee shall not be liable with
respect to payments or other obligations due and payable or
due to be performed under the Old Transactions on or prior to
the Novation Date.
(b) in respect of each New Transaction, the Transferee (pursuant
to the Pooling and Servicing Agreement) and the Remaining
Party each undertake duties and obligations towards the other
and acquire rights against each other identical in their terms
to each corresponding Old Transaction (and, for the avoidance
of doubt, as if the Transferee were the Transferor and with
the Remaining Party remaining the Remaining Party, save for
any rights, liabilities or obligations of the Remaining Party
or the Transferor with respect to payments or other
obligations due and payable or due to be performed on or prior
to the Novation Date); and
(c) each New Transaction shall be governed by and form part of an
agreement in the form of a 1992 ISDA Master Agreement between
the Remaining Party and Transferee as if the parties had
executed on [_______, 2004_], a 1992 ISDA Master Agreement
(but without any Schedule except for (i) the election of the
laws of the State of New York (without reference to choice of
law doctrine) as the governing law and USD as Termination
Currency and (ii) the items specified in Section 10 below (the
"NEW AGREEMENT")), and the relevant Old Confirmation, as
amended pursuant to this Novation Agreement, shall be deemed
to be a Confirmation between the Remaining Party and the
Transferee.
3. REPRESENTATIONS AND WARRANTIES.
(a) On the date of this Novation Agreement:
(i) Each of the parties makes to each of the other
parties those representations and warranties set
forth in Section 3(a) of the 1992 ISDA Master
Agreement with references in such Section to "this
Agreement" or "any Credit Support Document" being
deemed references to this Novation Agreement alone.
(ii) The Remaining Party and the Transferor each makes to
the other and the Remaining Party and the Transferee
each makes to the other the representation set forth
in Section 3(b) of the 1992 ISDA Master Agreement, in
the former case with respect to the Old Agreement,
and in the latter case with respect to the New
Agreement and taking into account the parties
entering into and performing their obligations under
this Novation Agreement.
(iii) Each of the Transferor and the Remaining Party
represents and warrants to each other and to the
Transferee that :
(A) it has made no prior transfer (whether by
way of security or otherwise) of the Old
Agreement or any interest or obligation in
or under the Old Agreement or in respect of
any Old Transaction; and
(B) as of the Novation Date, all obligations of
the Transferor and the Remaining Party under
each Old Transaction required to be
performed on or before the Novation Date
have been fulfilled.
(b) Subject to its obligations under the Pooling and Servicing
Agreement, the Transferor makes no representation or warranty
and does not assume any responsibility with respect to the
legality, validity, effectiveness, adequacy or enforceability
of any New Transaction or the New Agreement or any documents
relating thereto and assumes no responsibility for the
condition, financial or otherwise, of the Remaining Party, the
Transferee or any other person or for the performance and
observance by the Remaining Party, the Transferee or any other
person of any of its obligations under any New Transaction or
the New Agreement or any document relating thereto and any and
all such conditions and warranties, whether express or implied
by law or otherwise, are hereby excluded.
S-2
4. COUNTERPARTS.
This Novation Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.
5. COSTS AND EXPENSES.
The parties will each pay their own costs and expenses (including legal fees)
incurred in connection with this Novation Agreement and as a result of the
negotiation, preparation and execution of this Novation Agreement.
6. AMENDMENTS.
No amendment, modification or waiver in respect of this Novation Agreement will
be effective unless in writing (including a writing evidenced by a facsimile
transmission) and executed by each of the parties or confirmed by an exchange of
telexes or electronic messages on an electronic messaging system.
7. GOVERNING LAW; JURISDICTION.
This Novation Agreement will be governed by and construed in accordance with the
laws of the State of New York without reference to the conflict of laws
provisions thereof.
The terms of Section 13(b) of the 1992 ISDA Master Agreement shall apply to this
Novation Agreement with references in such Section to "this Agreement" being
deemed references to this Novation Agreement alone.
8. NOTICES.
For the purposes of this Novation Agreement and Section 12(a) of the New
Agreement, the addresses for notices or communications are as follows: (i) in
the case of Transferor, as specified in the Old Confirmations, or such other
address as may be hereafter furnished in writing to Transferee and Remaining
Party; (ii) in the case of Transferee, [_______], or such other address as may
be hereafter furnished in writing to Transferor and Remaining Party; and (iii)
in the case of Remaining Party, as specified in the Old Confirmations, or such
other address as may be hereafter furnished in writing to Transferor and
Transferee.
9. PAYMENTS.
Any payments remitted by Remaining Party under the New Transaction shall be made
by wire transfer according to the following instructions:
[-------]
10. PROVISIONS DEEMED INCORPORATED INTO THE NEW AGREEMENT.
(a) Limitation on Events of Default. Notwithstanding the terms of
Sections 5 and 6 of the New Agreement, if at any time and so
long as the Transferee has satisfied in full all its payment
obligations under Section 2(a)(i) of the New Agreement and has
at the time no future payment obligations, whether absolute or
contingent, under such Section, then unless Remaining Party is
required pursuant to appropriate proceedings to return to the
Transferee or otherwise returns to the Transferee upon demand
of the Transferee any portion of any such payment: (i) the
occurrence of an event described in Section 5(a) (other than
Sections 5(a)(vii)(1), 5(a)(vii)(3), 5(a)(vii)(4),
5(a)(vii)(5), 5(a)(vii)(6), 5(a)(vii)(7) or 5(a)(vii)(8)) of
the New Agreement with respect to the Transferee shall not
constitute an Event of Default or Potential Event of Default
with respect to the Transferee as Defaulting Party; and (ii)
Remaining Party shall be entitled to designate an Early
Termination Date pursuant to Section 6 of the New Agreement
only as a result of the occurrence of a Termination Event set
forth in either Section 5(b)(i) or 5(b)(ii) of the New
Agreement with respect to Remaining Party as the Affected
Party or Section 5(b)(iii) of the New Agreement with respect
to Remaining Party as the Burdened Party.
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(b) Non-Petition. Remaining Party hereby irrevocably and
unconditionally agrees that it will not institute against, or
join any other person in instituting against, the Transferee,
any bankruptcy, reorganization, arrangement, insolvency, or
similar proceeding under the laws of the United States or any
other jurisdiction for the non-payment of any amount due
hereunder or any other reason until the payment in full of the
Certificates (as defined in the Pooling and Servicing
Agreement) and the expiration of a period of one year plus one
day (or, if longer, the applicable preference period)
following such payment. Nothing herein shall prevent Remaining
Party from participating in any such proceeding once
commenced.
(c) Additional Provisions. Notwithstanding the terms of Sections 5
and 6 of the New Agreement, the provisions of Sections
5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(b)(iv)
shall not apply to Remaining Party or the Transferee.
(d) No Set-off. Notwithstanding any provision of this Novation
Agreement or any other existing or future agreement, each
party irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or condition
payment or performance of any obligation between it and the
other party hereunder against any obligation between it and
the other party under any other agreements. The provisions for
Set-off set forth in Section 6(e) of the New Agreement shall
not apply for purposes of the New Transactions.
(e) Section 3 of the New Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each of Transferor, Transferee and Remaining Party
represents to the other on each date when it enters
into a Transaction that:
(1) Nonreliance. Each party represents to the
other party (which representation will be
deemed to be repeated by each party on each
date on which a Transaction is entered into
or amended, extended or otherwise modified)
that it is acting for its own account, and
has made its own independent decisions to
enter into the New Agreement and any
Transaction thereunder and as to whether the
New Agreement and any Transaction thereunder
is appropriate or proper for it based on its
own judgment and upon advice from such
advisors as it has deemed necessary. It is
not relying on any communication (written or
oral) of the other party as investment
advice or as a recommendation to enter into
the New Agreement or any Transaction
thereunder, it being understood that
information and explanations related to the
terms and conditions of the New Agreement
and any Transaction thereunder shall not be
considered investment advice or a
recommendation to enter into the New
Agreement or any Transaction thereunder. No
communication (written or oral) received
from the other party shall be deemed to be
an assurance or guarantee as to the expected
results of any Transaction thereunder.
(2) Purpose. Remaining Party is entering into
the New Transactions for the purposes of
managing its borrowings or investments,
hedging its underlying assets or liabilities
or in connection with a line of business
(including financial intermediation
services) or the financing of its business.
The Transferee is entering into the New
Transactions pursuant to the Pooling and
Servicing Agreement.
(3) Principal. The other party is not acting as
an agent, fiduciary or advisor for it in
respect of the New Transactions.
(4) Eligible Contract Participant. It
constitutes an "eligible contract
participant" as such term is defined in
Section 1(a)(12) of the Commodity Exchange
Act, as amended."
S-4
(5) Evaluation and Understanding. Each party
represents to the other party (which
representation will be deemed to be repeated
by each party on each date on which a
Transaction is entered into or amended,
extended or otherwise modified) that it is
capable of evaluating and understanding (on
its own behalf or through independent
professional advice), and understands and
accepts, the terms, conditions and risks of
that Transaction. It is also capable of
assuming, and assumes, the financial and
other risks of that Transaction.
(f) Substitution Event. If at any time the long-term senior
unsecured deposit ratings of Remaining Party shall be rated
below "BBB+" by Standard & Poor's Ratings Service, below
"Baa1" by ▇▇▇▇▇'▇ Investors Service, Inc. and below "BBB+" by
Fitch, Inc., and within ten (10) Local Business Days following
the publication date(s) of such ratings, Remaining Party,
using its good faith efforts, fails to find an entity
acceptable to the Transferee, as directed in writing by the
Master Servicer, which acceptance shall not be unreasonably
withheld or delayed, to whom all of Remaining Party's
interests and obligations under this Agreement shall be
assigned at no cost to the Transferee, and following which
Remaining Party shall be released from all further obligations
under this Agreement, then, at the option of the Transferee,
such failure shall constitute an Additional Termination Event
with Remaining Party as the Affected Party.
(g) Amendment. Section 9(b) of the New Agreement is hereby amended
by adding the following at the end of such Section: "No
transfer, supplement, assignment, amendment, modification or
waiver in respect of the New Agreement will be effective
without the prior written consent of Standard & Poor's Ratings
Group, ▇▇▇▇▇'▇ Investors Service, Inc. and Fitch, Inc."
(h) Consent to Recording. The parties agree that each may tape
(and/or electronically) record all telephonic conversations
between marketing and trading personnel in connection herewith
and/or the New Agreement (and/or any Transaction thereunder)
and that any such recordings may be submitted in evidence in
any proceedings relating hereto and/or the New Agreement
(and/or any Transaction).
(i) Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE NEW AGREEMENT OR
ANY TRANSACTION CONTEMPLATED THEREUNDER.
(j) Multibranch Party. For purpose of Section 10 of the New
Agreement: (i) Remaining Party is a Multibranch Party, and may
act through its Charlotte, North Carolina, Chicago, Illinois,
San Francisco, California, New York, New York or London,
England Office or such other Office as may be agreed to by the
parties in connection with a Transaction; and (ii) Transferee
is not a Multibranch Party.
(k) Amendments to Old Confirmations.
(i) The term "Floating Amount I" on page two of each Old
Confirmation is amended by deleting "I".
(ii) The term "Cap Rate I" on page two and Schedule B of
each Old Confirmation is amended by deleting "I".
(iii) The definition of "Floating Rate Option" on page two
of each Old Confirmation under the caption "Floating
Amount" is amended by inserting at the end of
"USD-LIBOR-BBA" the following:
"provided, however, that if USD-LIBOR-BBA for any
Calculation Period is greater than the Ceiling Rate
(as set forth in Schedule B attached hereto) then the
USD-LIBOR-BBA for such Calculation Period shall be
deemed to be the Ceiling Rate"
S-5
(iv) The term "Floating Amount II" and all terms related
to the term "Floating Amount II" (not including
Calculation Agent) are deleted in their entirety from
each Old Confirmation.
(v) The term "Cap Rate II" on Schedule B of each Old
Confirmation is amended by deleting it in its
entirety and inserting in its place "Ceiling Rate."
(l) Consent and Acknowledgment of Remaining Party. Remaining Party
hereby consents to the assignment and delegation by Transferor
to Transferee of all of Transferor's rights, duties, and
obligations under the Old Transactions pursuant to this
Novation Agreement. In addition, Remaining Party hereby
acknowledges that the responsibilities of Transferee under the
New Transactions will be performed on its behalf by [_______],
as master servicer under the Pooling and Servicing Agreement.
(m) Limitation on Liability. Transferee and Remaining Party agree
that the sole recourse in respect of the obligations of
Transferee under each New Transaction shall be to the Trust
Fund (as defined in the Pooling and Servicing Agreement).
Transferor and Remaining Party agree that: (i) Transferee is
entering into this Novation Agreement solely in its capacity
as trustee under the Pooling and Servicing Agreement (and not
in its individual capacity); and (ii) in no case shall
Transferee (or any person acting as successor trustee under
the Pooling and Servicing Agreement), be personally liable for
or on account of any of the statements, representations,
warranties, covenants or obligations stated to be those of
Transferee under the terms of each New Transaction, all such
liability, if any, being expressly waived by Transferor and
Remaining Party and any person claiming by, through or under
either such party. Transferor hereby agrees to indemnify and
hold harmless the Trustee with respect to any and all claims
under the Old Transactions.
Notwithstanding the foregoing (or anything to the contrary in
this Novation Agreement), [_______] shall be liable for its
own negligence, willful misconduct, bad faith and/or fraud.
S-6
IN WITNESS WHEREOF the parties have executed this Novation Agreement on
the respective dates specified below with effect from and including the Novation
Date.
[-------] [-------]
By: .......................... By: ..............................
Name: Name:
Title: Title:
Date: _________, 2004 Date: _________, 2004
The [_______], not in its individual capacity, but solely as trustee for
[_______].
By: ..........................
Name:
Title:
Date:
S-7
ANNEX
Transactions between [_______] and [_______]
Trade Date [_______],[_______] Reference No. [_______]
Trade Date [_______],[_______] Reference No. [_______]
Trade Date [_______],[_______] Reference No. [_______]
S-8
OLD CONFIRMATIONS
S-9
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2004-BC4
[Date]
Via Facsimile
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated as of
October 1, 2004, (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 Bank of New York, as Trustee.
Capitalized terms used herein shall have the meanings ascribed to such terms in
the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing Officer,
holding the office set forth beneath his/her name and hereby further certifies
as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note with
respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and deposited
in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan,
taking into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
and
4. We certify that all amounts due in connection with the waiver of a
Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Servicer pursuant to Section 3.20 of the Pooling and Servicing
Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:
-------------------------------
Name:
Title:
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SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
DURING THE RELATED PREPAYMENT PERIOD
-----------------------------------------------------------------------
LOAN NUMBER CLAUSE 2: YES/NO CLAUSE 3: (I) OR (II)
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APPENDIX U: Standard & Poor's Predatory Lending Categorization
Standard & Poor's has categorized loans governed by anti-predatory
lending laws in the Jurisdictions listed below into three categories based upon
a combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High Cost
by the industry.
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STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION
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STATE/JURISDICTION CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
----------------------------------------------------- ------------------------------------------------------------------
Arkansas High Cost Home Loan
Cleveland Heights, Ohio Covered Loan
Colorado Covered Loan
Connecticut High Cost Home Loan
District of Columbia Covered Loan
Florida High Cost Home Loan
Georgia (Oct. 1, 2002 - March 6, 2003) High Cost Home Loan
Georgia as amended (March 7, 2003 - current) High Cost Home Loan
HOEPA Section 32 High Cost Loan
Illinois High Risk Home Loan
Kansas High Loan-to-Value Consumer Loans and High APR Consumer Loans
Kentucky High Cost Home Loan
Los Angeles, Calif. High Cost Refinance Home Loan
Maine High Rate High Fee Mortgage
Massachusetts High Cost Home Loan
Nevada Home Loan
New Jersey High Cost Home Loan
New York High Cost Home Loan
New Mexico High Cost Home Loan
North Carolina High Cost Home Loan
Oakland, Calif. High Cost Home Loan
Ohio Covered Loan
Oklahoma Subsection 10 Mortgage
South Carolina High Cost Home Loan
West Virginia West Virginia Mortgage Loan Act Loan
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STANDARD & POOR'S COVERED LOAN CATEGORIZATION
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STATE/JURISDICTION CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
----------------------------------------------------- -------------------------------------------------------------------
Georgia (Oct. 1, 2002-March 6, 2003) Covered Loan
New Jersey Covered Home Loan
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STANDARD & POOR'S HOME LOAN CATEGORIZATION
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STATE/JURISDICTION CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
----------------------------------------------------- -------------------------------------------------------------------
Georgia (Oct. 1, 2002-March 6, 2003) Home Loan
New Jersey Home Loan
New Mexico Home Loan
North Carolina Consumer Home Loan
Oakland, Calif. Home Loan
South Carolina Consumer Home Loan
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