EXECUTION COPY
===============================================================================
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller and Master Servicer
and
THE BANK OF NEW YORK,
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 1999
--------------------------------------
ASSET-BACKED CERTIFICATES, SERIES 1999-2
===============================================================================
Table of Contents
Page
ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms........................................I-1
Section 1.02. Certain REMIC-Related
Defined Terms........................................I-44
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
Section 2.01. Conveyance of Mortgage
Loans................................................II-1
Section 2.02. Acceptance by Trustee of
the Mortgage Loans...................................II-4
Section 2.03. Representations,
Warranties and Covenants
of the Master Servicer and
the Seller...........................................II-6
Section 2.04. Representations and
Warranties of the
Depositor............................................II-19
Section 2.05. Delivery of Opinion of
Counsel in Connection with
Substitutions and
Repurchases..........................................II-20
Section 2.06. Authentication and
Delivery of Certificates.............................II-21
Section 2.07. Covenants of the Master
Servicer.............................................II-21
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service
Mortgage Loans.......................................III-1
Section 3.02. Subservicing; Enforcement
of the Obligations of
Master Servicer......................................III-2
Section 3.03. Rights of the Depositor,
the Trustee in Respect of
the Master Servicer..................................III-2
Section 3.04. Trustee to Act as Master
Servicer.............................................III-3
Section 3.05. Collection of Mortgage
Loan Payments; Certificate
Account; Distribution
Account..............................................III-3
Section 3.06. Collection of Taxes,
Assessments and Similar
Items; Escrow Accounts...............................III-6
Section 3.07. Access to Certain
Documentation and
Information Regarding the
Mortgage Loans.......................................III-7
Section 3.08. Permitted Withdrawals from
the Certificate Account,
Distribution Account, the
Fixed Rate Carryover
Reserve Fund and the
Adjustable Rate Carryover
Reserve Fund.........................................III-7
Section 3.09. [Reserved............................................III-10]
Section 3.10. Maintenance of Hazard
Insurance............................................III-10
Section 3.11. Enforcement of Due-On-Sale
Clauses; Assumption
Agreements...........................................III-11
Section 3.12. Realization Upon Defaulted
Mortgage Loans;
Determination of Excess
Proceeds and Realized
Losses; Repurchase of
Certain Mortgage Loans...............................III-12
Section 3.13. Trustee to Cooperate;
Release of Mortgage Files............................III-15
Section 3.14. Documents, Records and
Funds in Possession of
Master Servicer to be Held
for the Trustee......................................III-16
Section 3.15. Servicing Compensation...............................III-16
Section 3.16. Access to Certain
Documentation........................................III-17
Section 3.17. Annual Statement as to
Compliance...........................................III-17
Section 3.18. Annual Independent Public
Accountants' Servicing
Statement; Financial
Statements...........................................III-17
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances...............................................IV-1
Section 4.02. Reduction of Servicing
Compensation in Connection
with Prepayment Interest
Shortfalls.............................................IV-1
Section 4.03. REMIC Distributions....................................IV-2
Section 4.04. Distributions..........................................IV-2
Section 4.05. Monthly Statements to Certificateholders...............IV-8
Section 4.06. REMIC 1, REMIC 2, REMIC 3,
and REMIC 4 Allocations...............................IV-10
Section 4.07. Extra Master Servicing Fee............................IV-16
Section 4.08. Fixed Rate Carryover
Reserve Fund..........................................IV-17
Section 4.09. Adjustable Rate Carryover..
Reserve Fund..........................................IV-18
ARTICLE V.
THE CERTIFICATES
Section 5.01. The Certificates........................................V-1
Section 5.02. Certificate Register;
Registration of Transfer
and Exchange of
Certificates............................................V-2
Section 5.03. Mutilated, Destroyed, Lost
or Stolen Certificates..................................V-5
Section 5.04. Persons Deemed Own.ers..................................V-6
Section 5.05. Access to List of.
Certificateholders' Names
and Addresses...........................................V-6
Section 5.06. Book-Entry Certificates.................................V-6
Section 5.07. Notices to Depository...................................V-7
Section 5.08. Definitive Certificates.................................V-8
Section 5.09. Maintenance of Office or
Agency..................................................V-8
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01. Respective Liabilities of
the Depositor, the Master
Servicer and the Seller................................VI-1
Section 6.02. Merger or Consolidation of
the Depositor, the Master
Servicer or the Seller.................................VI-1
Section 6.03. Limitation on Liability of
the Depositor, the Seller,
the Master Servicer and
others.................................................VI-1
Section 6.04. Limitation on Resignation
of Master Servicer.....................................VI-2
Section 6.05. Errors and Omissions
Insurance; Fidelity Bonds...............................VI-2
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. Events of Default.....................................VII-1
Section 7.02. Trustee to Act;.
Appointment of Successor..............................VII-2
Section 7.03. Notification to
Certificateholders....................................VII-3
ARTICLE VIII.
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee....... ..........................VIII-1
Section 8.02. Certain Matters Affecting
the Trustee..........................................VIII-2
Section 8.03. Trustee Not Liable for
Mortgage Loans.......................................VIII-3
Section 8.04. Trustee May Own
Certificates.........................................VIII-3
Section 8.05. Master Servicer to Pay
Trustee's Fees and
Expenses.............................................VIII-3
Section 8.06. Eligibility Requirements
for Trustee..........................................VIII-4
Section 8.07. Resignation and Removal of
Trustee..............................................VIII-4
Section 8.08. Successor Trustee................................... VIII-5
Section 8.09. Merger or Consolidation of
Trustee..............................................VIII-6
Section 8.10. Appointment of Co-Trustee
or Separate Trustee..................................VIII-6
Section 8.11. Tax Matters..........................................VIII-7
ARTICLE IX.
TERMINATION
Section 9.01. Termination upon
Liquidation or Repurchase
of all Mortgage Loans..................................IX-1
Section 9.02. Final Distribution on the
Certificates...........................................IX-1
Section 9.03. Additional Termination
Requirements...........................................IX-3
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment...............................................X-1
Section 10.02. Recordation of Agreement;
Counterparts............................................X-2
Section 10.03. Governing Law...........................................X-2
Section 10.04. Intention of Parties....................................X-3
Section 10.05. Notices.................................................X-3
Section 10.06. Severability of Provisions..............................X-4
Section 10.07. Assignment..............................................X-4
Section 10.08. Limitation on Rights of
Certificateholders......................................X-4
Section 10.09. Inspection and Audit
Rights..................................................X-5
Section 10.10. Certificates Nonassessable
and Fully Paid..........................................X-6
POOLING AND SERVICING AGREEMENT, dated as of May 1, 1999,
among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation (in its capacity as
seller hereunder, the "Seller", and in its capacity as master servicer
hereunder, the "Master Servicer"), and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. As provided herein,
the Trustee shall elect that the Trust Fund be treated for Federal income tax
purposes as four separate real estate mortgage investment conduits (each a
"REMIC" or, in the alternative, "REMIC 1", "REMIC 2", "REMIC 3", and "REMIC
4", respectively, REMIC 4 also being referred to as the "Upper Tier REMIC."
The Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6,
Class MF-1, Class MF-2, Class BF, Class AV-1, Class MV-1, Class MV-2, Class
BV, Class BF-IO, and Class BV-IO Certificates represent ownership of all of
the regular interests in REMIC 4. The Class R-4 Interest represents the sole
class of "residual interest" in REMIC 4 for purposes of the REMIC provisions.
Each of the Class R-1, Class R-2, and Class R-3 Interests represent the sole
class of residual interest in REMIC 1, REMIC 2, and REMIC 3, respectively, for
purposes of the REMIC provisions. Under this Agreement, there are also six
classes of uncertificated REMIC 1 regular interests issued (the Class T1-F1,
Class T1-F2, Class T1-F3, Class T1-V1, Class T1-V2, and Class T1-V3
Interests), eight classes of uncertificated REMIC 2 regular interests issued
(the Class T2-F1, Class T2-F2, Class T2-F3, Class T2-F4, Class T2-V1, Class
T2-V2, Class T2-V3, and Class T2-V4 Interests), twenty-one classes of
uncertificated REMIC 3 regular interests issued (the Class T3-F1, Class T3-F2,
Class T3-F3, Class T3-F4, Class T3-F5, Class T3-F6, Class T3-F7, Class T3-F8,
Class T3-F9, Class T3-F10, Class T3-F11, Class T3-F12, Class T3-F13, Class
T3-V1, Class T3-V2, Class T3-V3, Class T3-V4, Class T3-V5, Class T3-V6, Class
T3-V7 and Class T3-V8 Interests), and twenty-six classes of uncertificated
REMIC 4 regular interests issued (Class T4-F1, Class T4-F2, Class T4-F3, Class
T4-F4, Class T4-F5, Class T4-F6, Class T4-F7, Class T4-F8, Class T4-F9, Class
T4-F10, Class T4-F11, Class T4-F12, Class T4-F13, Class T4-F14, Class T4-F15,
Class T4-F16, Class T4-F17, Class T4-F18, Class T4-V1, Class T4-V2, Class
T4-V3, Class T4-V4, Class T4-V5, Class T4-V6, Class T4-V7, and Class T4-V8
Interests). The REMIC 1 Regular Interests will be held as assets of REMIC 2,
the REMIC 2 Regular Interests will be held as assets of REMIC 3, and the REMIC
3 Regular Interests will be held as assets of REMIC 4. The "latest possible
maturity date" for federal income tax purposes of all interests created hereby
will be the Latest Possible Maturity Date.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Seller and the Trustee agree as
follows:
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 the Fixed Rate Certificates
and any Distribution Date, the calendar month immediately preceding such
Distribution Date. With respect to the Adjustable Rate Certificates and any
Distribution Date, the period commencing on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date) and ending on the day immediately preceding such Distribution Date. All
calculations of interest on the Fixed Rate Certificates will be made on the
basis of a 360-day year consisting of twelve 30-day months, and all
calculations of interest on the Adjustable Rate Certificates will be made on
the basis of the actual number of days elapsed in the related Accrual Period
and in a 360 day year.
Adjustable Net Rate: The weighted average Net Mortgage Rate
for Adjustable Rate Mortgage Loans. For purposes of the definition of
Adjustable Net Rate, all calculations of interest in respect of a Mortgage
Loan at the Mortgage Rate less the related Servicing Fee Rate will be made on
the basis of the actual number of days in the related Accrual Period and a 360
day year. The Adjustable Net Rate in respect of the first Distribution Date
shall be 9.186%.
Adjustable Rate Carryover Reserve Fund: The separate
Eligible Account created and initially maintained by the Trustee pursuant to
Section 4.09 in the name of the Trustee for the benefit of the Adjustable Rate
Certificateholders and designated "The Bank of New York in trust for
registered holders of CWABS, Inc., Asset-Backed Certificates, Series 1999-2".
Funds in the Adjustable Rate Carryover Reserve Fund shall be held in trust for
the Adjustable Rate Certificateholders for the uses and purposes set forth in
this Agreement.
Adjustable Rate Certificate Carryover: With respect to any
Distribution Date, an amount equal to the sum of (i) the Class AV-1 Interest
Carryover Amount for such Distribution Date (if any), (ii) the Class MV-1
Interest Carryover Amount for such Distribution Date (if any), (iii) the Class
MV-2 Interest Carryover Amount for such Distribution Date (if any) and (iv)
the Class BV Interest Carryover Amount for such Distribution Date (if any);
provided that when the term Adjustable Rate Certificate Carryover is used with
respect to one Class of Adjustable Rate Certificates, it shall mean such
carryover amount listed in clauses (i), (ii), (iii) or (iv), as applicable,
with the same Class designation.
Adjustable Rate Certificateholder: A holder of an Adjustable
Rate Certificate.
Adjustable Rate Certificate Principal Balance: The sum of
the Class AV-1 Certificate Principal Balance, the Class MV-1 Certificate
Principal Balance, the Class MV-2 Certificate Principal Balance and the Class
BV Certificate Principal Balance.
Adjustable Rate Certificates: Any of the Class AV-1, Class
MV-1, Class MV-2, Class BV and/or Class BV-IO Certificates.
Adjustable Rate Class A Certificate Principal Balance: The
Class AV-1 Certificate Principal Balance.
Adjustable Rate Class A Principal Distribution Amount: With
respect to (i) any Distribution Date prior to the Adjustable Rate Stepdown
Date, or any Distribution Date on which an Adjustable Rate Trigger Event has
occurred, 100% of the Adjustable Rate Principal Distribution Amount for such
Distribution Date and (ii) any Distribution Date on or after the Adjustable
Rate Stepdown Date where an Adjustable Rate Trigger Event has not occurred,
the excess of (A) the Adjustable Rate Class A Certificate Principal Balance
immediately prior to such Distribution Date over (B) the lesser of (I) 72.00%
of the Stated Principal Balance of the Adjustable Rate Mortgage Loans on the
immediately preceding Due Date and (II) the Stated Principal Balance of the
Adjustable Rate Mortgage Loans on the immediately preceding Due Date less the
OC Floor for the Adjustable Rate Mortgage Loans.
Adjustable Rate Class B Principal Distribution Amount: With
respect to any Distribution Date on or after the Adjustable Rate Stepdown Date
and as long as an Adjustable Rate Trigger Event has not occurred and
continuing, the excess of (i) the sum of (A) the Adjustable Rate Class A
Certificate Principal Balance (after taking into account distribution of the
Adjustable Rate Class A Principal Distribution Amount on such Distribution
Date), (B) the Class MV-1 Certificate Principal Balance (after taking into
account distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (C) the Class MV-2 Certificate Principal Balance (after
taking into account distribution of the Class MV-2 Principal Distribution
Amount for such Distribution Date), and (D) the Class BV Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of
(A) 96.00% of the Stated Principal Balance of the Adjustable Rate Mortgage
Loans on the preceding Due Date and (B) the Stated Principal Balance of the
Adjustable Rate Mortgage Loans on the preceding Due Date less the OC Floor for
the Adjustable Rate Mortgage Loans provided that after the Adjustable Rate
Class A Certificate Principal Balance, the Class MV-1 Certificate Principal
Balance and the Class MV-2 Certificate Principal Balance has been reduced to
zero, the Adjustable Rate Class B Principal Distribution Amount for such
Distribution Date will equal 100% of the Adjustable Rate Principal
Distribution Amount for such Distribution Date.
Adjustable Rate Excess Cashflow: With respect to any
Distribution Date, the aggregate remaining amounts constituting Adjustable
Rate Excess Cashflow for such Distribution Date pursuant to Sections
4.04(b)(v) and 4.04(e)(v).
Adjustable Rate Extra Principal Distribution Amount: With
respect to any Distribution Date, the lesser of (i) the excess, if any, of the
Adjustable Rate Specified Overcollateralization Amount for such Distribution
Date over the Adjustable Rate Overcollateralization Amount for such
Distribution Date (after giving effect to distributions of principal on the
Adjustable Rate Certificates other than any Adjustable Rate Extra Principal
Distribution Amount) and (ii) the sum of the Adjustable Rate Excess Cashflow
and Fixed Rate Remainder Excess Cashflow for such Distribution Date available
therefor in the priority set forth in Section 4.04.
Adjustable Rate Interest Funds: With respect to Adjustable
Rate Mortgage Loans and any Master Servicer Advance Date, the sum, without
duplication, of (i) all scheduled interest collected during the related Due
Period with respect to the Adjustable Rate Mortgage Loans less the related
Servicing Fee, (ii) all Advances relating to interest with respect to the
Adjustable Rate Mortgage Loans, (iii) all Compensating Interest with respect
to the Adjustable Rate Mortgage Loans and (iv) Liquidation Proceeds with
respect to the Adjustable Rate Mortgage Loans collected during the related Due
Period (to the extent such Liquidation Proceeds relate to interest) less all
Nonrecoverable Advances relating to interest reimbursed during the related Due
Period.
Adjustable Rate Mortgage Loans: The group of Mortgage Loans
identified in the related 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.
Adjustable Rate Overcollateralization Amount: With respect
to any Distribution Date, the excess, if any, of the Stated Principal Balance
of the Adjustable Rate Mortgage Loans as of the preceding due date over the
Certificate Principal Balances of all Adjustable Rate Certificates on such
date (after taking into account the payment of principal other than any
Adjustable Rate Extra Principal Distribution Amount, on such Certificates on
such Distribution Date).
Adjustable Rate Principal Distribution Amount: With respect
to each Distribution Date, the sum of (i) the Adjustable Rate Principal Funds
for such Distribution Date and (ii) any Adjustable Rate Extra Principal
Distribution Amount for such Distribution Date.
Adjustable Rate Principal Funds: With respect to the
Adjustable Rate Mortgage Loans, the sum, without duplication, of (i) the
scheduled principal collected during the related Due Period or Advanced on or
before the related Master Servicer Advance Date, (ii) prepayments collected
during the related Prepayment Period, (iii) the Stated Principal Balance of
each Adjustable Rate Mortgage Loan that was repurchased by the Seller or the
Master Servicer, (iv) the aggregate of all Substitution Adjustment Amounts for
the related Determination Date in connection with the substitution of
Adjustable Rate Mortgage Loans pursuant to Section 2.03(c) and (v) all
Liquidation Proceeds collected during the related Due Period (to the extent
such Liquidation Proceeds relate to principal) less all Nonrecoverable
Advances relating to principal reimbursed during the related Due Period.
Adjustable Rate Remainder Excess Cashflow: With respect to
any Distribution Date, the Adjustable Rate Excess Cashflow for such
Distribution Date remaining after the applications set forth in Section
4.04(g)(i) through (vii).
Adjustable Rate Specified Overcollateralization Amount:
Prior to the Adjustable Rate Stepdown Date, 2.00% of the Stated Principal
Balance of the Adjustable Rate Mortgage Loans as of the Cut-off Date, and on
and after the Adjustable Rate Stepdown Date, 4.00% of the Stated Principal
Balance of the Adjustable Rate Mortgage Loans as of the preceding Due Date,
subject to a minimum amount equal to the OC Floor for the Adjustable Rate
Mortgage Loans; provided that, if on any Distribution Date an Adjustable Rate
Trigger Event has occurred, the Adjustable Rate Specified
Overcollateralization Amount shall not be reduced to the applicable percentage
of the then current Stated Principal Balance of the Adjustable Rate Mortgage
Loans until the Distribution Date on which an Adjustable Rate Trigger Event no
longer exists.
Adjustable Rate Standard Rate: The lesser of (i) the sum of
(A) One Month LIBOR plus (B) the Class BV Margin, and (ii) the Adjustable Net
Rate for such Distribution Date.
Adjustable Rate Stepdown Date: With respect to Adjustable
Rate Certificates, the later to occur of (i) the Distribution Date in June
2002 or (ii) the first Distribution Date on which the Adjustable Rate Class A
Certificate Principal Balance is less than or equal to 72.00% of the Stated
Principal Balance of Adjustable Rate Mortgage Loans as of the preceding Due
Date.
Adjustable Rate Subordinated Certificates: The Class MV-1,
Class MV-2 and Class BV Certificates.
Adjustable Rate Trigger Event: With respect to any
Distribution Date after the Adjustable Rate Stepdown Date, (1) the product of
(i) 2.5 times (ii) the quotient of (A) the Stated Principal Balance of all
Adjustable Rate Mortgage Loans 60 or more days delinquent (including
Adjustable Rate Mortgage Loans in foreclosure and REO Properties) and (B) the
Stated Principal Balance of the Adjustable Rate Mortgage Loans as of the
preceding Master Servicer Advance Date (2) equals or exceeds the Required
Percentage.
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 as of the close of business on the related Determination Date and (B)
with respect to each REO Property that has not been liquidated, an amount
equal to the excess, if any, of (x) one month's interest (adjusted to the Net
Mortgage Rate) on the Stated Principal Balance of the related Mortgage Loan
over (y) the net monthly rental income (if any) from such REO Property
deposited in the Certificate Account for such Distribution Date pursuant to
Section 3.12, less the aggregate amount of any such delinquent payments that
the Master Servicer has determined would constitute a Nonrecoverable Advance
were an advance to be made with respect thereto.
Agreement: This Pooling and Servicing Agreement and any and
all amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage
Loans due after the related Due Date and (ii) Principal Prepayments and
Liquidation Proceeds received in respect of such Mortgage Loans after the last
day of the related Prepayment Period.
Applied Realized Loss Amount: With respect to any
Distribution Date, the sum of the Realized Losses with respect to the Mortgage
Loans which are to be applied in reduction of the Certificate Principal
Balance of the Certificates pursuant to this Agreement, which shall on any
such Distribution Date equal the amount, if any, by which, (i) with respect to
the Fixed Rate Certificates, the Fixed Rate Certificate Principal Balance
(after all distributions of principal on such Distribution Date) exceeds the
Stated Principal Balance of the Fixed Rate Mortgage Loans as of the preceding
Due Date, and (ii) with respect to the Adjustable Rate Certificates, the
Adjustable Rate Certificate Principal Balance (after all distributions of
principal on such Distribution Date) exceeds the Stated Principal Balance of
the Adjustable Rate Mortgage Loans as of the preceding Due Date.
Appraised Value: The appraised value of the Mortgaged
Property based upon the appraisal made for the Seller by a fee appraiser at
the time of the origination of the related Mortgage Loan, or the sales price
of the Mortgaged Property at the time of such origination, whichever is less,
or with respect to any Mortgage Loan originated in connection with a
refinancing, the appraised value of the Mortgaged Property based upon the
appraisal made at the time of such refinancing.
Available Funds Cap: As of any Distribution Date with
respect to the Adjustable Rate Certificates, a per annum rate equal to the
quotient of (x) the total scheduled interest collected or Advanced on the
Adjustable Rate Mortgage Loans based on the Mortgage Rates in effect on the
related Due Date less the related Servicing Fee for such Distribution Date
multiplied by 360 over the actual number of days in the Due Period, divided by
(y) the Certificate Principal Balance of the Adjustable Rate Certificates.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates (other than the Class B-IO
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 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.
Certificate: Any one of the certificates of any Class
executed and authenticated by the Trustee in substantially the forms attached
hereto as exhibits.
Certificate Account: The separate Eligible Account created
and initially maintained by the Master Servicer pursuant to Section 3.05(b)
with a depository institution in the name of the Master Servicer for the
benefit of the Trustee on behalf of the Certificateholders and designated
"Countrywide Home Loans, Inc. in trust for registered holders of CWABS, Inc.,
Asset-Backed Certificates, Series 1999-2". Funds in the Certificate Account
shall be held in trust for the Certificateholders for the uses and purposes
set forth in this Agreement.
Certificate Group: Either of the Fixed Rate Certificates or
the Adjustable Rate 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 any Class B-IO 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) any Applied Realized Loss Amounts allocated to such
Certificate on previous Distribution Dates pursuant to (i) Section 4.04(l) for
the Fixed Rate Certificates and (ii) Section 4.04(m) for the Adjustable Rate
Certificates. References herein to the Certificate Principal Balance of a
Class of Certificates or a Certificate Group shall mean the Certificate
Principal Balances of all Certificates in such Class or all Certificates in
such Certificate Group, as the case may be.
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 (other than the Class B-IO 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 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 AF-1 Certificate: Any Certificate designated as a
"Class AF-1 Certificate" on the face thereof, in the form of Exhibit A-1
hereto, representing the right to distributions as set forth herein.
Class AF-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AF-1
Certificates.
Class AF-1 Current Interest: As of any Distribution Date,
the interest accrued on the Class AF-1 Certificate Principal Balance during
the related Accrual Period at the Class AF-1 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class AF-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class AF-1 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class AF-1 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class AF-1
Pass-Through Rate for the related Accrual Period.
Class AF-1 Net Rate Carryover Amount: As of any Distribution
Date on which the Class AF-1 Pass-Through Rate is based upon the Fixed Net Rate
Cap, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class AF-1 Certificates is based upon the Fixed Net Rate Cap, the excess of (i)
the amount of interest the Class AF-1 Certificates would otherwise be entitled
to receive on such Distribution Date had the Pass-Through Rate for that Class
not been determined based on the Fixed Net Rate Cap, over (ii) the amount of
interest payable on the Class AF-1 Certificates at the Fixed Net Rate Cap for
such Distribution Date and (B) the Class AF-1 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(h),
together with interest thereon at the Pass-Through Rate (without giving effect
to the Fixed Net Rate Cap).
Class AF-1 Pass-Through Rate: On any Distribution Date, the
lesser of (i) 6.13% per annum and (ii) the Fixed Net Rate Cap.
Class AF-2 Certificate: Any Certificate designated as a
"Class AF-2 Certificate" on the face thereof, in the form of Exhibit A-2
hereto, representing the right to distributions as set forth herein.
Class AF-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AF-2
Certificates.
Class AF-2 Current Interest: As of any Distribution Date,
the interest accrued on the Class AF-2 Certificate Principal Balance during
the related Accrual Period at the Class AF-2 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class AF-2 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class AF-2 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class AF-2 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class AF-2
Pass-Through Rate for the related Accrual Period.
Class AF-2 Net Rate Carryover Amount: As of any Distribution Date on which
the Class AF-2 Pass-Through Rate is based upon the Fixed Net Rate Cap, the sum
of (A) if on such Distribution Date the Pass-Through Rate for the Class AF-2
Certificates is based upon the Fixed Net Rate Cap, the excess of (i) the amount
of interest the Class AF-2 Certificates would otherwise be entitled to receive
on such Distribution Date had the Pass-Through Rate for that Class not been
determined based on the Fixed Net Rate Cap, over (ii) the amount of interest
payable on the Class AF-2 Certificates at the Fixed Net Rate Cap for such
Distribution Date and (B) the Class AF-2 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(h),
together with interest thereon at the Pass-Through Rate (without giving effect
to the Fixed Net Rate Cap).
Class AF-2 Pass-Through Rate: On any Distribution Date, the
lesser of (i) 6.24% per annum and (ii) the Fixed Net Rate Cap.
Class AF-3 Certificate: Any Certificate designated as a
"Class AF-3 Certificate" on the face thereof, in the form of Exhibit A-3
hereto, representing the right to distributions as set forth herein.
Class AF-3 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AF-3
Certificates.
Class AF-3 Current Interest: As of any Distribution Date,
the interest accrued on the Class AF-3 Certificate Principal Balance during
the related Accrual Period at the Class AF-3 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class AF-3 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class AF-3 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class AF-3 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class AF-3
Pass-Through Rate for the related Accrual Period.
Class AF-3 Net Rate Carryover Amount: As of any Distribution
Date on which the Class AF-3 Pass-Through Rate is based upon the Fixed Net
Rate Cap, the sum of (A) if on such Distribution Date the Pass-Through Rate
for the Class AF-3 Certificates is based upon the Fixed Net Rate Cap, the
excess of (i) the amount of interest the Class AF-3 Certificates would
otherwise be entitled to receive on such Distribution Date had the
Pass-Through Rate for that Class not been determined based on the Fixed Net
Rate Cap, over (ii) the amount of interest payable on the Class AF-3
Certificates at the Fixed Net Rate Cap for such Distribution Date and (B) the
Class AF-3 Net Rate Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(h), together with interest thereon at
the Pass-Through Rate (without giving effect to the Fixed Net Rate Cap).
Class AF-3 Pass-Through Rate: On any Distribution Date, the
lesser of (i) 6.39% per annum and (ii) the Fixed Net Rate Cap.
Class AF-4 Certificate: Any Certificate designated as a
"Class AF-4 Certificate" on the face thereof, in the form of Exhibit A-4
hereto, representing the right to distributions as set forth herein.
Class AF-4 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AF-4
Certificates.
Class AF-4 Current Interest: As of any Distribution Date,
the interest accrued on the Class AF-4 Certificate Principal Balance during
the related Accrual Period at the Class AF-4 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class AF-4 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class AF-4 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class AF-4 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class AF-4
Pass-Through Rate for the related Accrual Period.
Class AF-4 Net Rate Carryover Amount: As of any Distribution
Date on which the Class AF-4 Pass-Through Rate is based upon the Fixed Net Rate
Cap, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class AF-4 Certificates is based upon the Fixed Net Rate Cap, the excess of (i)
the amount of interest the Class AF-4 Certificates would otherwise be entitled
to receive on such Distribution Date had the Pass-Through Rate for that Class
not been determined based on the Fixed Net Rate Cap, over (ii) the amount of
interest payable on the Class AF-4 Certificates at the Fixed Net Rate Cap for
such Distribution Date and (B) the Class AF-4 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(h),
together with interest thereon at the Pass-Through Rate (without giving effect
to the Fixed Net Rate Cap).
Class AF-4 Pass-Through Rate: On any Distribution Date, the
lesser of (i) 6.78% per annum and (ii) the Fixed Net Rate Cap.
Class AF-5 Certificate: Any Certificate designated as a
"Class AF-5 Certificate" on the face thereof, in the form of Exhibit A-5
hereto, representing the right to distributions as set forth herein.
Class AF-5 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AF-5
Certificates.
Class AF-5 Current Interest: As of any Distribution Date,
the interest accrued on the Class AF-5 Certificate Principal Balance during
the related Accrual Period at the Class AF-5 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class AF-5 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class AF-5 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class AF-5 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class AF-5
Pass-Through Rate for the related Accrual Period.
Class AF-5 Net Rate Carryover Amount: As of any Distribution
Date on which the Class AF-5 Pass-Through Rate is based upon the Fixed Net Rate
Cap, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class AF-5 Certificates is based upon the Fixed Net Rate Cap, the excess of (i)
the amount of interest the Class AF-5 Certificates would otherwise be entitled
to receive on such Distribution Date had the Pass-Through Rate for that Class
not been determined based on the Fixed Net Rate Cap, over (ii) the amount of
interest payable on the Class AF-5 Certificates at the Fixed Net Rate Cap for
such Distribution Date and (B) the Class AF-5 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(h),
together with interest thereon at the Pass-Through Rate (without giving effect
to the Fixed Net Rate Cap).
Class AF-5 Pass-Through Rate: On any Distribution Date, the
lesser of (i) 7.17% per annum and (ii) the Fixed Net Rate Cap.
Class AF-6 Certificate: Any Certificate designated as a
"Class AF-6 Certificate" on the face thereof, in the form of Exhibit A-6
hereto, representing the right to distributions as set forth herein.
Class AF-6 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AF-6
Certificates.
Class AF-6 Current Interest: As of any Distribution Date,
the interest accrued on the Class AF-6 Certificate Principal Balance during
the related Accrual Period at the Class AF-6 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class AF-6 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class AF-6 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class AF-6 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class AF-6
Pass-Through Rate for the related Accrual Period.
Class AF-6 Net Rate Carryover Amount: As of any Distribution
Date on which the Class AF-6 Pass-Through Rate is based upon Fixed Net Rate
Cap, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class AF-6 Certificates is based upon the Fixed Net Rate Cap, the excess of
(i) the amount of interest the Class AF-6 Certificates would otherwise be
entitled to receive on such Distribution Date had the Pass-Through Rate for
that Class not been determined based on the Fixed Net Rate Cap, over (ii) the
amount of interest payable on the Class AF-6 Certificates at the Fixed Net
Rate Cap for such Distribution Date and (B) the Class AF-6 Net Rate Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(h), together with interest thereon at the Pass-Through Rate
(without giving effect to the Fixed Net Rate Cap).
Class AF-6 Pass-Through Rate: On any Distribution Date, the
lesser of (i) 6.73% per annum and (ii) the Fixed Net Rate Cap.
Class AF-6 Principal Distribution Amount: As of any
Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the Certificate Principal Balance of the Class AF-6
Certificates on such Distribution Date and the denominator of which is the
Fixed Rate Class A Certificate Principal Balance, (ii) the Fixed Rate Class A
Principal Distribution Amount for such Distribution Date and (iii) the Class
AF-6 PDA Factor for such Distribution Date.
Class AF-6 PDA Factor: As of any Distribution Date set forth
below, the percentage set forth across from such Distribution Date:
Distribution Date Percentage
--------------------------------------- ---------------
June 1999-May 2002.................................... 0%
June 2002-May 2004.................................... 45%
June 2004-May 2005.................................... 80%
June 2005-May 2006.................................... 100%
June 2006 and thereafter.............................. 300%
Class AV-1 Certificate: Any Certificate designated as a
"Class AV-1 Certificate" on the face thereof, in the form of Exhibit A-11
hereto, representing the right to distributions as set forth herein.
Class AV-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AV-1
Certificates.
Class AV-1 Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for
the Class AV-1 Certificates is based upon the Available Funds Cap, the excess
of (i) the amount of interest the Class AV-1 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class AV-1 Margin for such
Distribution Date, up to the Weighted Maximum Rate Cap, over (ii) the amount
of interest payable on the Class AV-1 Certificates at the Available Funds Cap
for such Distribution Date and (B) the Class AV-1 Interest Carryover Amount
for all previous Distribution Dates not previously paid pursuant to Section
4.04(i), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class AV-1 Margin for such Distribution
Date.
Class AV-1 Current Interest: As of any Distribution Date,
the interest accrued on the Class AV-1 Certificate Principal Balance during
the related Accrual Period at the Class AV-1 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class AV-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class AV-1 Current
Interest with respect to prior Distribution Dates (excluding any Class AV-1
Interest Carryover Amount) over (b) the amount actually distributed to the
Class AV-1 Certificates with respect to interest and (ii) interest thereon (to
the extent permitted by applicable law) at the Class AV-1 Pass-Through Rate
for the related Accrual Period.
Class AV-1 Margin: As of any Distribution Date on or prior
to the Optional Termination Date for the Adjustable Rate Certificates, 0.220%
per annum and, as of any Distribution Date after such Optional Termination
Date, 0.440% per annum.
Class AV-1 Pass-Through Rate: For the first Distribution
Date, 5.13875% per annum. As of any Distribution Date thereafter, the least of
(i) One-Month LIBOR plus the Class AV-1 Margin, (ii) the Weighted Maximum Rate
Cap and (iii) the Available Funds Cap for such Distribution Date.
Class B-IO Certificates: Either or both of the Class BF-IO
Certificates and the Class BV-IO Certificates, as the context may require.
Class BF Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect
to the Fixed Rate Mortgage Loans which have been applied to the reduction of
the Certificate Principal Balance of the Class BF Certificates.
Class BF Certificate: Any Certificate designated as a "Class
BF Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.
Class BF Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class BF Certificates.
Class BF Current Interest: As of any Distribution Date, the
interest accrued on the Class BF Certificate Principal Balance during the
related Accrual Period at the Class BF Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class BF Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class BF Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class BF Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class BF
Pass-Through Rate for the related Accrual Period.
Class BF Net Rate Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class BF Certificates is based upon the Fixed Net Rate Cap, the excess of (i)
the amount of interest the Class BF Certificates would otherwise be entitled to
receive on such Distribution Date had the Pass-Through Rate for that Class not
been determined based on the Fixed Net Rate Cap, over (ii) the amount of
interest payable on the Class BF Certificates at the Fixed Net Rate Cap for
such Distribution Date and (B) the Class BF Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(h),
together with interest thereon at the Pass-Through Rate (without giving effect
to the Fixed Net Rate Cap).
Class BF Pass-Through Rate: On any Distribution Date, the
lesser of (i) 8.70% per annum and (ii) the Fixed Net Rate Cap.
Class BF Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class BF Applied Realized Loss Amount over (ii)
the sum of all distributions in reduction of the Class BF Applied Realized
Loss Amount on all previous Distribution Dates.
Class BF-IO Certificates: Any Certificate designated as a
"Class BF-IO Certificate" on the face thereof, in the form of Exhibit A-10
hereto, representing ownership of the Class T4-F10, Class T4-F11, Class
T4-F12, Class T4-F13, Class T4-F14 Interests, Class T4-F15, Class T4-F16,
Class T4-F17 and Class T4-F18.
Class BF-IO Distributable Amount: With respect to any
Distribution Date, the sum of the amounts distributable on the Class T4-F10,
Class T4-F11, Class T4-F12, Class T4-F13, Class T4-F14 Interests, Class T4-F14
Interests, Class T4-F15, Class T4-F16, Class T4-F17 and Class T4-F18.
Class BV Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect
to the Adjustable Rate Mortgage Loans which have been applied to the reduction
of the Certificate Principal Balance of the Class BV Certificates.
Class BV Certificate: Any Certificate designated as a "Class
BV Certificate" on the face thereof, in the form of Exhibit A-14 hereto,
representing the right to distributions as set forth herein.
Class BV Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class BV Certificates.
Class BV Current Interest: As of any Distribution Date, the
interest accrued on the Class BV Certificate Principal Balance during the
related Accrual Period at the Class BV Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class BV Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class BV Current
Interest with respect to prior Distribution Dates (excluding any Class BV
Interest Carryover Amount) over (b) the amount actually distributed to the
Class BV Certificates with respect to interest and (ii) interest thereon (to
the extent permitted by applicable law) at the Class BV Pass-Through Rate for
the related Accrual Period.
Class BV Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for
the Class BV Certificates is based upon the Available Funds Cap, the excess of
(i) the amount of interest the Class BV Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class BV Margin for such
Distribution Date, up to the Weighted Maximum Rate Cap, over (ii) the amount
of interest payable on the Class BV Certificates at the Available Funds Cap
for such Distribution Date and (B) the Class BV Interest Carryover Amount for
all previous Distribution Dates not previously paid pursuant to Section
4.04(i), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class BV Margin for such Distribution Date.
Class BV Margin: For any Distribution Date on or prior to
the Optional Termination Date for the Adjustable Rate Certificates, 2.600% per
annum and, as of any Distribution Date after such Optional Termination
Date, 3.900% per annum.
Class BV Pass-Through Rate: For the first Distribution Date,
7.51875% per annum. As of any Distribution Date thereafter, the least of (i)
One-Month LIBOR plus the Class BV Margin, (ii) the Weighted Maximum Rate Cap
and (iii) the Available Funds Cap for such Distribution Date.
Class BV Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class BV Applied Realized Loss Amount over (ii)
the sum of all distributions in reduction of the Class BV Applied Realized
Loss Amounts on all previous Distribution Dates.
Class BV-IO Certificates: Any Certificate designated as a
"Class BV-IO Certificate" on the face thereof, in the form of Exhibit A-15
hereto, representing ownership of the Class T4-V5, Class T4-V6, Class T4-V7,
and Class T4-V8 Interests.
Class BV-IO Distributable Amount: With respect to any
Distribution Date, the aggregate of the amounts distributable on the Class
T4-V5, Class T4-V6, Class T4-V7, and Class T4-V8 Interests.
Class MF-1 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect
to the Fixed Rate Mortgage Loans which have been applied to the reduction of
the Certificate Principal Balance of the Class MF-1 Certificates.
Class MF-1 Certificate: Any Certificate designated as a
"Class MF-1 Certificate" on the face thereof, in the form of Exhibit A-7
hereto, representing the right to distributions as set forth herein.
Class MF-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class MF-1
Certificates.
Class MF-1 Current Interest: As of any Distribution Date,
the interest accrued on the Class MF-1 Certificate Principal Balance during
the related Accrual Period at the Class MF-1 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class MF-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class MF-1 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class MF-1 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class MF-1
Pass-Through Rate for the related Accrual Period.
Class MF-1 Net Rate Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class MF-1 Certificates is based upon the Fixed Net Rate Cap, the excess of (i)
the amount of interest the Class MF-1 Certificates would otherwise be entitled
to receive on such Distribution Date had the Pass-Through Rate for that Class
not been determined based on the Fixed Net Rate Cap, over (ii) the amount of
interest payable on the Class MF-1 Certificates at the Fixed Net Rate Cap for
such Distribution Date and (B) the Class MF-1 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(h),
together with interest thereon at the Pass-Through Rate (without giving effect
to the Fixed Net Rate Cap).
Class MF-1 Pass-Through Rate: The lesser of (i) 7.09% per
annum and (ii) the Fixed Net Rate Cap.
Class MF-1 Principal Distribution Amount: With respect to
any Distribution Date on or after the Fixed Rate Stepdown Date, 100% of the
Fixed Rate Principal Distribution Amount for such Distribution Date if the
Fixed Rate Class A Certificate Principal Balance has been reduced to zero and
a Fixed Rate Trigger Event has occurred and is continuing, or, if any of the
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5 or Class AF-6
Certificates are still outstanding and as long as a Fixed Rate Trigger Event
has not occurred and is not continuing, the excess of (i) the sum of (A) the
Fixed Rate Class A Certificate Principal Balance (after taking into account
distributions of the Fixed Rate Class A Principal Distribution Amount on such
Distribution Date) and (B) the Class MF-1 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (A) 89.90%
of the Stated Principal Balance of the Fixed Rate Mortgage Loans on the
preceding Due Date and (B) the Stated Principal Balance of the Fixed Rate
Mortgage Loans on the preceding Due Date less the OC Floor for the Fixed Rate
Mortgage Loans.
Class MF-1 Unpaid Realized Loss Amount: As of any
Distribution Date, the excess of (i) the Class MF-1 Applied Realized Loss
Amount over (ii) the sum of all distributions in reduction of the Class MF-1
Applied Realized Loss Amount on all
previous Distribution Dates.
Class MF-2 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect
to the Fixed Rate Mortgage Loans which have been applied to the reduction of
the Certificate Principal Balance of the Class MF-2 Certificates.
Class MF-2 Certificate: Any Certificate designated as a
"Class MF-2 Certificate" on the face thereof, in the form of Exhibit A-8
hereto, representing the right to distributions as set forth herein.
Class MF-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class MF-2
Certificates.
Class MF-2 Current Interest: As of any Distribution Date,
the interest accrued on the Class MF-2 Certificate Principal Balance during
the related Accrual Period at the Class MF-2 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class MF-2 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class MF-2 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class MF-2 Certificates with respect to interest and (ii)
interest thereon (to the extent permitted by applicable law) at the Class MF-2
Pass-Through Rate for the related Accrual Period.
Class MF-2 Net Rate Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class MF-2 Certificates is based upon the Fixed Net Rate Cap, the excess of (i)
the amount of interest the Class MF-2 Certificates would otherwise be entitled
to receive on such Distribution Date had the Pass-Through Rate for that Class
not been determined based on the Fixed Net Rate Cap, over (ii) the amount of
interest payable on the Class MF-2 Certificates at the Fixed Net Rate Cap for
such Distribution Date and (B) the Class MF-2 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(h),
together with interest thereon at the Pass-Through Rate (without giving effect
to the Fixed Net Rate Cap).
Class MF-2 Pass-Through Rate: On any Distribution Date, the
lesser of (i) 7.48% per annum and (ii) the Fixed Net Rate Cap.
Class MF-2 Principal Distribution Amount: With respect to
any Distribution Date on or after the Fixed Rate Stepdown Date, 100% of the
Fixed Rate Principal Distribution Amount for such Distribution Date if the
Fixed Rate Class A Certificate Principal Balance and the Class MF-1
Certificate Principal Balance have been reduced to zero and a Fixed Rate
Trigger Event has occurred and is continuing, or, if any of the Class AF-1,
Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6 or Class MF-1
Certificates are still outstanding and as long as a Fixed Rate Trigger Event
has not occurred and is not continuing, the excess of (i) the sum of (A) the
Fixed Rate Class A Certificate Principal Balance (after taking into account
distributions of the Fixed Rate Class A Principal Distribution Amount on such
Distribution Date), (B) the Class MF-1 Certificate Principal Balance (after
taking into account distributions of the Class MF-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class MF-2 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of
(A) 93.40% of the Stated Principal Balance of the Fixed Rate Mortgage Loans on
the preceding Due Date and (B) the Stated Principal Balance of the Fixed Rate
Mortgage Loans on the preceding Due Date less the OC Floor for the Fixed Rate
Mortgage Loans.
Class MF-2 Unpaid Realized Loss Amount: As of any
Distribution Date, the excess of (i) the Class MF-2 Applied Realized Loss
Amount over (ii) the sum of all distributions in reduction of the Class MF-2
Applied Realized Loss Amount on all
previous Distribution Dates.
Class MV-1 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Realized Losses with respect to the
Adjustable Rate Mortgage Loans which have been applied to the reduction of the
Certificate Principal Balance of the Class MV-1 Certificates.
Class MV-1 Certificate: Any Certificate designated as a
"Class MV-1 Certificate" on the face thereof, in the form of Exhibit A-12
hereto, representing the right to distributions as set forth herein.
Class MV-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class MV-1
Certificates.
Class MV-1 Current Interest: As of any Distribution Date,
the interest accrued on the Class MV Certificate Principal Balance during the
related Accrual Period at the Class MV Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class MV-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class MV-1 Current
Interest with respect to prior Distribution Dates (excluding any Class MV-1
Interest Carryover Amount) over (b) the amount actually distributed to the
Class MV-1 Certificates with respect to interest and (ii) interest thereon (to
the extent permitted by applicable law) at the Class MV-1 Pass-Through Rate
for the related Accrual Period.
Class MV-1 Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for
the Class MV-1 Certificates is based upon the Available Funds Cap, the excess
of (i) the amount of interest the Class MV-1 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class MV-1 Margin for such
Distribution Date, up to the Weighted Maximum Rate Cap, over (ii) the amount
of interest payable on the Class MV-1 Certificates at the Available Funds Cap
for such Distribution Date and (B) the Class MV-1 Interest Carryover Amount
for all previous Distribution Dates not previously paid pursuant to Section
4.04(i), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class MV-1 Margin for such Distribution
Date.
Class MV-1 Margin: As of any Distribution Date on or prior
to the Optional Termination Date for the Adjustable Rate Certificates, 0.440%
per annum and, as of any Distribution Date after such Optional Termination
Date, 0.660% per annum.
Class MV-1 Pass-Through Rate: For the first Distribution
Date, 5.35875% per annum. As of any Distribution Date thereafter, the least of
(i) One-Month LIBOR plus the Class MV-1 Margin, (ii) the Weighted Maximum Rate
Cap and (iii) the Available Funds Cap for such Distribution Date.
Class MV-1 Principal Distribution Amount: With respect to
any Distribution Date on or after the Adjustable Rate Stepdown Date, 100% of
the Adjustable Rate Principal Distribution Amount for such Distribution Date
if the Adjustable Rate Class A Certificate Principal Balance has been reduced
to zero and an Adjustable Rate Trigger Event has occurred and is continuing,
or, if any of the Class AV-1 Certificates are still outstanding and as long as
an Adjustable Rate Trigger Event has not occurred and is not continuing, the
excess of (i) the sum of (A) the Adjustable Rate Class A Certificate Principal
Balance (after taking into account distributions of the Adjustable Rate Class
A Principal Distribution Amount on such Distribution Date) and (B) the Class
MV-1 Certificate Principal Balance immediately prior to such Distribution Date
over (ii) the lesser of (A) 81.50% of the Stated Principal Balance of the
Adjustable Rate Mortgage Loans on the preceding Due Date and (B) the Stated
Principal Balance of the Adjustable Rate Mortgage Loans on the preceding Due
Date less the OC Floor for the Adjustable Rate Mortgage Loans.
Class MV-1 Unpaid Realized Loss Amount: As of any
Distribution Date, the excess of (i) the Class MV-1 Applied Realized Loss
Amount over (ii) the sum of all distributions in reduction of the Class MV-1
Applied Realized Loss Amounts on all previous Distribution Dates.
Class MV-2 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Realized Losses with respect to the
Adjustable Rate Mortgage Loans which have been applied to the reduction of the
Certificate Principal Balance of the Class MV-2 Certificates.
Class MV-2 Certificate: Any Certificate designated as a
"Class MV-2 Certificate" on the face thereof, in the form of Exhibit A-13
hereto, representing the right to distributions as set forth herein.
Class MV-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class MV-2
Certificates.
Class MV-2 Current Interest: As of any Distribution Date,
the interest accrued on the Class MV-2 Certificate Principal Balance during
the related Accrual Period at the Class MV-2 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class MV-2 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class MV-2 Current
Interest with respect to prior Distribution Dates (excluding any Class MV-2
Interest Carryover Amount) over (b) the amount actually distributed to the
Class MV-2 Certificates with respect to interest and (ii) interest thereon (to
the extent permitted by applicable law) at the Class MV-2 Pass-Through Rate
for the related Accrual Period.
Class MV-2 Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for
the Class MV-2 Certificates is based upon the Available Funds Cap, the excess
of (i) the amount of interest the Class MV-2 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class MV-2 Margin for such
Distribution Date, up to the Weighted Maximum Rate Cap, over (ii) the amount
of interest payable on the Class MV-2 Certificates at the Available Funds Cap
for such Distribution Date and (B) the Class MV-2 Interest Carryover Amount
for all previous Distribution Dates not previously paid pursuant to Section
4.04(i), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class MV-2 Margin for such Distribution
Date.
Class MV-2 Margin: As of any Distribution Date on or prior
to the Optional Termination Date for the Adjustable Rate Certificates, 0.900%
per annum and, as of any Distribution Date after such Optional Termination
Date, 1.350% per annum.
Class MV-2 Pass-Through Rate: For the first Distribution
Date, 5.81875% per annum. As of any Distribution Date thereafter, the least of
(i) One-Month LIBOR plus the Class MV-2 Margin, (ii) the Weighted Maximum Rate
Cap and (iii) the Available Funds Cap for such Distribution Date.
Class MV-2 Principal Distribution Amount: With respect to
any Distribution Date on or after the Adjustable Rate Stepdown Date, 100% of
the Adjustable Rate Principal Distribution Amount for such Distribution Date
if the Adjustable Rate Class A Certificate Principal Balance and the Class
MV-1 Certificate Principal Balance have been reduced to zero and an Adjustable
Rate Trigger Event has occurred and is continuing, or, if any of the Class
AV-1 or Class MV-1 Certificates are still outstanding and as long as an
Adjustable Rate Trigger Event has not occurred and is not continuing, the
excess of (i) the sum of (A) the Adjustable Rate Class A Certificate Principal
Balance (after taking into account distributions of the Adjustable Rate Class
A Principal Distribution Amount on such Distribution Date), (B) the Class MV-1
Certificate Principal Balance (after taking into account distributions of the
Class MV-1 Principal Distribution Amount on such Distribution Date) and (C)
the Class MV-2 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (A) 88.50% of the Stated Principal
Balance of the Adjustable Rate Mortgage Loans on the preceding Due Date and
(B) the Stated Principal Balance of the Adjustable Rate Mortgage Loans on the
preceding Due Date less the OC Floor for the Adjustable Rate Mortgage Loans.
Class MV-2 Unpaid Realized Loss Amount: As of any
Distribution Date, the excess of (i) the Class MV-2 Applied Realized Loss
Amount over (ii) the sum of all distributions in reduction of the Class MV-2
Applied Realized Loss Amounts on all previous Distribution Dates.
Class R Certificate: Any one of the Class R Certificates
executed and authenticated by the Trustee in substantially the form set forth
in Exhibits D and E hereto, and evidencing ownership of the Class R-1, Class
R-2, Class R-3, and Class R-4 Interests.
Closing Date: May 27, 1999.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the sum of (x) the original principal
balance of the related Mortgage Loan and (y) the outstanding principal balance
at the date of origination of the Mortgage Loan of any senior mortgage loan,
or in the case of an open-ended senior mortgage loan (if any), the maximum
available line of credit with respect to such mortgage loan, regardless of any
lesser amount actually outstanding at the date of origination of the Mortgage
Loan, and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Compensating Interest: With respect to any Mortgage Loan, an
amount equal to one-half of the Servicing Fee, to be applied to the interest
portion of a Prepayment Interest Shortfall on such Mortgage Loan pursuant to
Section 4.02 hereof.
Corresponding Certificate: With respect to each REMIC 4
Regular Interest, the Certificate that evidences ownership of that REMIC 4
Regular Interest.
Corporate Trust Office: The designated office of the Trustee
in the State of New York where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Corporate Trust MBS Administration),
telephone: (▇▇▇) ▇▇▇-▇▇▇▇, facsimile:(▇▇▇) ▇▇▇-▇▇▇▇.
Cut-off Date: May 1, 1999.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on the calendar
day immediately preceding the Cut-off Date after application of all payments
of principal due prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-Off Date, but without giving
effect to any installments of principal received in respect of Due Dates on
and after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.
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.
Definitive Certificates: As defined in Section 5.06.
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 Trustee
on the Closing Date. The number of Delay Delivery Mortgage Loans shall not
exceed 50% of the aggregate number of Mortgage Loans as of the Closing Date.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
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 Principal Balance of this
Certificate".
Depositor: CWABS, Inc., a Delaware corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company ("DTC"), the nominee of which is Cede & Co., or any other
organization registered as a "clearing agency" pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. The Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Class of
Book-Entry Certificates, the agreement among the Depositor, the Trustee and
the initial Depository, dated as of the Closing Date, substantially in the
form of Exhibit O.
Depository Participant: A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date,
the 15th day of the month of such Distribution Date or, if such 15th day is
not a Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.05 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 1999-2". Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Distribution Account Deposit Date: As to any Distribution
Date, 1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such 25th day is not a
Business Day, the next succeeding Business Day, commencing in June 1999.
Due Date: With respect to any Distribution Date, the first
day of the month in which the related Distribution Date occurs.
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 (or, in the case of the
first Distribution Date, beginning on the Cut-off Date) and ending on the Due
Date in 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, so long as ▇▇▇▇▇'▇ is not a Rating
Agency) are rated by each Rating Agency (or, if Fitch does not provide such a
rating, by S&P in lieu of Fitch) in one of its two highest long-term and its
highest short-term rating categories respectively, at the time any amounts are
held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC
(to the limits established by the FDIC) and the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company having capital and surplus
of not less than $50,000,000, acting in its fiduciary capacity or (iv) any
other account acceptable to the Rating Agencies. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
as amended.
ERISA Restricted Certificate: Each of the Class MF-1, Class
MF-2, Class BF, Class MV-1, Class MV-2, Class BV, Class B-IO and Class R
Certificates.
Event of Default: As defined in Section 7.01 hereof.
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.
Extra Master Servicing Fee: The Extra Master Servicing Fee
payable pursuant to Sections 4.07 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC: 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.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
Fitch: Fitch IBCA, Inc.
Fixed Net Rate: The weighted average Net Mortgage Rate for
Fixed Rate Mortgage Loans. The Fixed Net Rate in respect of the first
Distribution Date shall be 9.042%.
Fixed Net Rate Cap: As of any Distribution Date with respect
to the Fixed Rate Certificates, a per annum rate equal to the weighted average
Mortgage Rate on the Fixed Rate Mortgage Loans less the related Servicing Fee
for such Distribution Date.
Fixed Net Rate Carryover: With respect to any Distribution
Date, an amount equal to the sum of (i) the Class AF-1 Net Rate Carryover
Amount for such Distribution Date (if any), (ii) the Class AF-2 Net Rate
Carryover Amount for such Distribution Date (if any), (iii) the Class AF-3 Net
Rate Carryover Amount for such Distribution Date (if any), (iv) the Class AF-4
Net Rate Carryover Amount for such Distribution Date (if any), (v) the Class
AF-5 Net Rate Carryover Amount for such Distribution Date (if any), (vi) the
Class AF-6 Net Rate Carryover Amount for such Distribution Date (if any);
(vii) the Class MF-1 Net Rate Carryover Amount for such Distribution Date (if
any), (viii) the Class MF-2 Net Rate Carryover Amount for such Distribution
Date (if any) and (ix) the Class BF Net Rate Carryover Amount for such
Distribution Date (if any); provided that when the term Fixed Net Rate
Carryover is used with respect to one Class of Fixed Rate Certificates, it
shall mean such carryover amount listed in clauses (i), (ii), (iii), (iv),
(v), (vi) or (vii) as applicable, with the same Class designation.
Fixed Rate 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 Fixed Rate
Certificateholders and designated "The Bank of New York in trust for
registered holders of CWABS, Inc., Asset-Backed Certificates, Series 1999-2".
Funds in the Fixed Rate Carryover Reserve Fund shall be held in trust for the
Fixed Rate Certificateholders for the uses and purposes set forth in this
Agreement.
Fixed Rate Certificateholder: A holder of a Fixed Rate
Certificate.
Fixed Rate Certificate Principal Balance: The sum of the
Class AF-1 Certificate Principal Balance, the Class AF-2 Certificate Principal
Balance, the Class AF-3 Certificate Principal Balance, the Class AF-4
Certificate Principal Balance, the Class AF-5 Certificate Principal Balance,
the Class AF-6 Certificate Principal Balance, the Class MF-1 Certificate
Principal Balance, the Class MF-2 Certificate Principal Balance and the Class
BF Certificate Principal Balances.
Fixed Rate Certificates: Any of the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class
BF and/or Class BF-IO Certificates.
Fixed Rate Class A Certificate Principal Balance: The sum of
the Class AF-1 Certificate Principal Balance, the Class AF-2 Certificate
Principal Balance, the Class AF-3 Certificate Principal Balance, the Class
AF-4 Certificate Principal Balance, the Class AF-5 Certificate Principal
Balance and the Class AF-6 Certificate Principal Balance.
Fixed Rate Class A Certificates: Any of the Class AF-1,
Class AF-2, Class AF-3, Class AF-4, Class AF-5 and/or Class AF-6 Certificates.
Fixed Rate Class A Current Interest: Any one or more of the
following (as the context requires): Class AF-1 Current Interest, Class AF-2
Current Interest, Class AF-3 Current Interest, Class AF-4 Current Interest,
Class AF-5 Current Interest, and/or Class AF-6 Current Interest.
Fixed Rate Class A Interest Carryforward Amount: Any one or
more of the following (as the context requires): Class AF-1 Interest
Carryforward Amount, Class AF-2 Interest Carryforward Amount, Class AF-3
Interest Carryforward Amount, Class AF-4 Interest Carryforward Amount, Class
AF-5 Interest Carryforward Amount and/or Class AF-6 Interest Carryforward
Amount.
Fixed Rate Class A Principal Distribution Amount: With
respect to (i) any Distribution Date prior to the Fixed Rate Stepdown Date, or
any Distribution Date on which a Fixed Rate Trigger Event has occurred, 100%
of the Fixed Rate Principal Distribution Amount for such Distribution Date and
(ii) any Distribution Date on or after the Fixed Rate Stepdown Date where a
Fixed Rate Trigger Event has not occurred, the excess of (A) the Fixed Rate
Class A Certificate Principal Balance immediately prior to such Distribution
Date over (B) the lesser of (I) 83.40% of the Stated Principal Balance of the
Fixed Rate Mortgage Loans on the preceding Due Date and (II) the Stated
Principal Balance of the Fixed Rate Mortgage Loans on the preceding Due Date
less the OC Floor for the Fixed Rate Mortgage Loans.
Fixed Rate Class B Principal Distribution Amount: With
respect to any Distribution Date on or after the Fixed Rate Stepdown Date and
as long as a Fixed Rate Trigger Event has not occurred and continuing, the
excess of (i) the sum of (A) the Fixed Rate Class A Certificate Principal
Balance (after taking into account distribution of the Fixed Rate Class A
Principal Distribution Amount on such Distribution Date), (B) the Class MF-1
Certificate Principal Balance (after taking into account distribution of the
Class MF-1 Distribution Amount on such Distribution Date), (C) the Class MF-2
Certificate Principal Balance (after taking into account distribution of the
Class MF-2 Principal Distribution Amount for such Distribution Date), and (D)
the Class BF Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (A) 97.40% of the Stated Principal
Balance of the Fixed Rate Mortgage Loans on the preceding Due Date and (B) the
Stated Principal Balance of the Fixed Rate Mortgage Loans on the preceding Due
Date less the OC Floor for the Fixed Rate Mortgage Loans; provided that after
the Fixed Rate Class A Certificate Principal Balance, the Class MF-1
Certificate Principal Balance and the Class MF-2 Certificate Principal Balance
has been reduced to zero, the Fixed Rate Class B Principal Distribution Amount
for such Distribution Date will equal 100% of the Fixed Rate Principal
Distribution Amount for such Distribution Date.
Fixed Rate Excess Cashflow: With respect to any Distribution
Date, the aggregate remaining amounts constituting Fixed Rate Excess Cashflow
for such Distribution Date pursuant to Sections 4.04(a)(v) and 4.04(c)(v).
Fixed Rate Extra Principal Distribution Amount: With respect
to any Distribution Date, the lesser of (i) the excess, if any, of the Fixed
Rate Specified Overcollateralization Amount for such Distribution Date over
the Fixed Rate Overcollateralization Amount for such Distribution Date (after
giving effect to distributions of principal on the Fixed Rate Certificates
other than any Fixed Rate Extra Principal Distribution Amount) and (ii) the
sum of the Fixed Rate Excess Cashflow and Adjustable Rate Remainder Excess
Cashflow for such Distribution Date available therefor in the priority set
forth in Section 4.04.
Fixed Rate Interest Funds: With respect to Fixed Rate
Mortgage Loans and any Master Servicer Advance Date, the sum, without
duplication, of (i) all scheduled interest collected during the related Due
Period with respect to the Fixed Rate Mortgage Loans less the Servicing Fee,
(ii) all Advances relating to interest with respect to the Fixed Rate Mortgage
Loans, (iii) all Compensating Interest with respect to the Fixed Rate Mortgage
Loans and (iv) Liquidation Proceeds with respect to the Fixed Rate Mortgage
Loans collected during the related Due Period (to the extent such Liquidation
Proceeds relate to interest) less all Nonrecoverable Advances relating to
interest reimbursed during the related Due Period.
Fixed Rate Mortgage Loans: The group of Mortgage Loans
identified in the related 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.
Fixed Rate Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of the Stated Principal Balance of the
Fixed Rate Mortgage Loans as of the preceding Due Date over the Certificate
Principal Balances of all Fixed Rate Certificates on such date (after taking
into account the payment of principal other than any Fixed Rate Extra
Principal Distribution Amount, on such Certificates on such Distribution
Date).
Fixed Rate Principal Distribution Amount: With respect to
each Distribution Date, the sum of (i) the Fixed Rate Principal Funds for such
Distribution Date and (ii) any Fixed Rate Extra Principal Distribution Amount
for such Distribution Date.
Fixed Rate Principal Funds: With respect to the Fixed Rate
Mortgage Loans, the sum, without duplication, of (i) the scheduled principal
collected during the related Due Period or Advanced on or before the related
Master Servicer Advance Date, (ii) prepayments collected during the related
Prepayment Period, (iii) the Stated Principal Balance of each Fixed Rate
Mortgage Loan that was repurchased by the Seller or the Master Servicer, (iv)
the aggregate of all Substitution Adjustment Amounts for the related
Determination Date in connection with the substitution of Fixed Rate Mortgage
Loans pursuant to Section 2.03(c) and (v) all Liquidation Proceeds collected
during the related Due Period (to the extent such Liquidation Proceeds relate
to principal) less all Nonrecoverable Advances relating to principal
reimbursed during the related Due Period.
Fixed Rate Remainder Excess Cashflow: With respect to any
Distribution Date, the Fixed Rate Excess Cashflow for such Distribution Date
remaining after the applications set forth in Section 4.04(f)(i) through
(vii).
Fixed Rate Specified Overcollateralization Amount: Prior to
the Fixed Rate Stepdown Date, 1.30% of the Stated Principal Balance of the
Fixed Rate Mortgage Loans as of the Cut-off Date, and on and after the Fixed
Rate Stepdown Date, 2.60% of the Stated Principal Balance of the Fixed Rate
Mortgage Loans as of the preceding Due Date, subject to a minimum amount equal
to the applicable OC Floor; provided that, if on any Distribution Date a Fixed
Rate Trigger Event has occurred, the Fixed Rate Specified Overcollateralization
Amount shall not be reduced to the applicable percentage of the then current
Stated Principal Balance of the Fixed Rate Mortgage Loans until the
Distribution Date on which a Fixed Rate Trigger Event no longer exists.
Fixed Rate Standard Rate: The lesser of 8.70% and the Fixed
Net Rate.
Fixed Rate Stepdown Date: With respect to the Fixed Rate
Certificates, the later to occur of (i) the Distribution Date in June 2002 or
(ii) the first Distribution Date on which the Fixed Rate Class A Certificate
Principal Balance is less than or equal to 83.40% of the Stated Principal
Balances of the Fixed Rate Mortgage Loans as of the preceding Due Date.
Fixed Rate Subordinated Certificates: The Class MF-1, MF-2
and Class BF Certificates.
Fixed Rate Trigger Event: With respect to any Distribution
Date after the Fixed Rate Stepdown Date, (1) the product of (i) two times (ii)
the quotient of (A) the Stated Principal Balance of all Fixed Rate Mortgage
Loans 60 or more days delinquent (including Fixed Rate Mortgage Loans in
foreclosure and REO Properties) and (B) the Stated Principal Balance of the
Fixed Rate Mortgage Loans as of the preceding Master Servicer Advance Date (2)
equals or exceeds the Required Percentage.
FNMA: 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.
Gross Margin: The percentage set forth in the related
Mortgage Note for the Adjustable Rate Mortgage Loans to be added to the Index
for use in determining the Mortgage Rate on each Adjustment Date, and which is
set forth in the Mortgage Loan Schedule for the Adjustable Rate Mortgage
Loans.
Index: As to any Adjustable Rate Mortgage Loan on any
Adjustment Date related thereto, the index for the adjustment of the Mortgage
Rate set forth as such in the related Mortgage Note, such index in general
being either (i) 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, if the Index ceases to be published in The Wall Street
Journal or becomes unavailable for any reason, then the Index shall be a new
index selected by the Trustee, as holder of the Mortgage Note, based on
comparable information or (ii) is the weekly average yield on United States
Treasury securities adjusted to a constant maturity of one year, as made
available by the Board of Governors of the Federal Reserve System, in the case
of both (i) and (ii) above as most recently announced as of a date 45 days
prior to such Adjustment Date. The Master Servicer hereby agrees that should
the Index become unavailable, the Master Servicer, on behalf of the Trustee,
will select a new index that is based upon comparable information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of such Mortgage
Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the 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.
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 Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect with respect to such Mortgage Loan, including any
replacement policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans pursuant to any Insurance Policy or any other insurance policy covering
a Mortgage Loan, to the extent such proceeds are payable to the mortgagee
under the Mortgage, the Master Servicer or the trustee under the deed of trust
and are not applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account, in
each case other than any amount included in such Insurance Proceeds in respect
of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
Interest Determination Date: With respect to the Adjustable
Rate Certificates for the first Accrual Period, May 25, 1999. With respect to
the Adjustable Rate Certificates and any Accrual Period thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
Interest Rate Cap Agreement: The interest rate cap contract
referred to in the last paragraph of Section 8.11 and all related provisions
of this Agreement.
Latest Possible Maturity Date: The Distribution Date
following the third anniversary of the scheduled maturity date of the Mortgage
Loan in the Trust Fund having the latest scheduled maturity date as of the
Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of
London, England and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such
liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Advances, Servicing Fees and
Servicing Advances.
Loan Group: Either of the Fixed Rate Mortgage Loans or the
Adjustable Rate Mortgage Loans.
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.
Master Servicer Advance Date: As to any Distribution Date,
1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Master Servicer: Countrywide Home Loans, Inc., a New York
corporation, and its successors and assigns, in its capacity as master
servicer hereunder.
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.
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.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.05.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest, or creating a
second lien on or second priority ownership interest, as applicable, in an
estate in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loans: Such of the Fixed Rate Mortgage Loans and
Adjustable Rate 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 that
was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred
for any reason including, without limitation, a breach of the representation
contained in Section 2.03(b)(v) hereof, shall continue to be a Mortgage Loan
hereunder until the Purchase Price with respect thereto has been paid to the
Trust Fund.
Mortgage Loan Repurchase Price: The price, calculated as set
forth in Section 9.01, to be paid in connection with the repurchase of the
Mortgage Loans pursuant to Section 9.01.
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) [Reserved];
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio,
as applicable, at origination;
(xi) a code indicating whether the residential dwelling at
the time of origination was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling (b) a condominium unit or (c) a
two- to four-unit residential property;
(xiii) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans.
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 Excess Spread: With respect to any Distribution Date and
Certificate Group, a fraction, expressed as a percentage, the numerator of
which is equal to the excess of (x) the aggregate Stated Principal Balance of
the then outstanding Mortgage Loans (after giving effect to distributions of
principal of the Certificates on such Distribution Date) in the related Loan
Group times the related Net Rate with respect to such Loan Group over (y) the
sum of the Interest Distribution Amount for such Distribution Date and
Certificate Group, and the denominator of which is an amount equal to (1) the
aggregate Stated Principal Balance (after giving effect to distributions of
principal of the Certificates on such Distribution Date) of the then
outstanding Mortgage Loans in the related Loan Group multiplied by (2) the
actual number of days elapsed in the related Interest Accrual Period divided
by 360.
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.
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 (i) the Adjustable Rate Mortgage Loans,
0.50% of the Stated Principal Balance of the Adjustable Rate Mortgage Loans as
of the Cut-off Date and (ii) the Fixed Rate Mortgage Loans, 0.50% of the
Stated Principal Balance of the Fixed Rate Mortgage Loans as of the Cut-off
Date.
Officer's Certificate: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Vice
President (however denominated), an Assistant Vice President, the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries of
the Depositor or the Master Servicer (or any other officer 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 a
particular subject) or (ii), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor, the
Seller and the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the
rate determined by the Trustee on the related Interest Determination Date on
the basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that
One-Month LIBOR calculated for the first Accrual Period shall equal 4.919% per
annum. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying One-Month LIBOR or comparable rates as may
be reasonably selected by the Trustee), One-Month LIBOR for the applicable
Accrual Period will be the Reference Bank Rate. If no such quotations can be
obtained by the Trustee and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to
each addressee of such opinion; provided that with respect to Section 6.04 or
10.01, or the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Depositor and the Master
Servicer, (ii) not have any direct financial interest in the Depositor or the
Master Servicer or in any affiliate of either, and (iii) not be connected with
the Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of either Loan Group
created hereunder pursuant to the purchase of the related Mortgage Loans
pursuant to the last sentence of Section 9.01 hereof.
Optional Termination Date: With respect to either Loan
Group, the Distribution Date on which the Stated Principal Balance of the
Mortgage Loans in such Loan Group is equal to or less than 10% of the Stated
Principal Balance of the Mortgage Loans in such Loan Group as of the Cut-off
Date.
Original Mortgage Loan: The mortgage loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
Original Value: The value of the property underlying a
Mortgage Loan based, in the case of the purchase of the underlying Mortgaged
Property, on the lower of an appraisal satisfactory to the Master Servicer or
the sales price of such property or, in the case of a refinancing, on an
appraisal satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated
under this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not
the subject of a Principal Prepayment in full, and that did not become a
Liquidated Loan, prior to the end of the related Prepayment Period.
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 AF-1
Certificates, the Class AF-1 Pass-Through Rate; with respect to the Class AF-2
Certificates, the Class AF-2 Pass-Through Rate; with respect to the Class AF-3
Certificates, the Class AF-3 Pass-Through Rate; with respect to the Class AF-4
Certificates, the Class AF-4 Pass-Through Rate; with respect to the Class AF-5
Certificates, the Class AF-5 Pass-Through Rate; with respect to the Class AF-6
Certificates, the Class AF-6 Pass-Through Rate; with respect to the Class AV-1
Certificates, the Class AV-1 Pass-Through Rate; with respect to the Class MF-1
Certificates, the Class MF-1 Pass-Through Rate; with respect to the Class MF-2
Certificates, the Class MF-2 Pass-Through Rate; with respect to the Class MV-1
Certificates, the Class MV-1 Pass-Through Rate; with respect to the Class MV-2
Certificates, the Class MV-2 Pass-Through Rate; with respect to the Class BF
Certificates, the Class BF Pass-Through Rate; and with respect to the Class BV
Certificates; the Class BV Pass-Through Rate.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest in the related Certificate Group
evidenced by such Class which shall be equal to the Class
Certificate Principal Balance of such Class divided by the Class
Principal Balance of all Classes in such Certificate Group; and
(ii) any Certificate, the Percentage Interest evidenced
thereby of the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of such Class. Periodic Rate
Cap: As to each Adjustable Rate Mortgage Loan and the related
Mortgage Note, the provision therein that limits permissible
increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than one and one-half percentage points, except that
the Initial Adjustment Dates for certain of the 2/28 and 3/27
Mortgage Loans are subject to a provision that limits permissible
increases and decreases in the Mortgage Rates as provided in the
related Mortgage Notes.
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, if
Fitch does not provide such a rating, by S&P in lieu of Fitch), or
such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by each
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, if Fitch does not provide such a rating, by
S&P in lieu of Fitch), or such lower rating as will not result in
the downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(v) certificates of deposit, demand or time deposits,
or bankers' acceptances issued by any depository institution or
trust company incorporated under the laws of the United States or of
any state thereof and subject to supervision and examination by
federal and/or state banking authorities, provided that the
commercial paper and/or long term unsecured debt obligations of such
depository institution or trust company (or in the case of the
principal depository institution in a holding company system, the
commercial paper or long-term unsecured debt obligations of such
holding company, but only if ▇▇▇▇▇'▇ is not a Rating Agency) are
then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such securities
(or, if Fitch does not provide such a rating, by S&P in lieu of
Fitch), or such lower ratings as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any
Rating Agency;
(vi) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings institution to the
extent that such deposits are fully insured by the FDIC;
(vii) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation containing, at the time
of the issuance of such agreements, such terms and conditions as
will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any such Rating Agency;
(viii) 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;
(ix) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment,
have one of the two highest long term ratings of each Rating Agency
(except (x) if the Rating Agency is Moody's, such rating shall be the
highest commercial paper rating of Moody's for any such securities
any (y) if Fitch does not provide such a rating, of S&P in lieu of
Fitch), or such lower rating 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;
(x) 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, if Fitch does not provide
such a rating, by S&P in lieu of Fitch) or such lower rating as will
not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency;
(xi) 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 (or, if Fitch does
not provide such a rating, by S&P in lieu of Fitch) in their
respective highest applicable rating category or such lower rating as
will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency; and
(xii) such other investments having a specified
stated maturity and bearing interest or sold at a discount acceptable
to each Rating Agency as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no
such instrument shall be a Permitted Investment (A) if such instrument
evidences principal and interest payments derived from obligations underlying
such instrument and the interest payments with respect to such instrument
provide a yield to maturity of greater than 120% of the yield to maturity at
par of such underlying obligations, or (B) if it may be redeemed at a price
below the purchase price (the foregoing clause (B) not to apply to investments
in units of money market funds pursuant to clause (vii) above); provided
further that no amount beneficially owned by any REMIC (including, without
limitation, any amounts collected by the Master Servicer but not yet deposited
in the Certificate Account) may be 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 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 4224, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer of
an Ownership Interest in a Class 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, joint
venture, association, joint-stock company, trust, unincorporated organization
or government, or any agency or political subdivision thereof.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates in a
Certificate Group.
Prepayment Interest Excess: With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment
during the period from the second day through the fifteenth day of the month
of such Distribution Date, any payment of interest received in connection
therewith (net of any applicable Servicing Fee) representing interest accrued
for any portion of such month of receipt.
Prepayment Interest Shortfall: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a Principal Prepayment in full, or that became a
Liquidated Loan during the period from the sixteenth day of the month
preceding such Distribution Date through the first day of the month in which
such Distribution Date occurs, or in the case of the first Distribution Date,
from the Cut-off Date through and including the fifteenth day of the month of
such Distribution Date, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04,
3.12 or 9.01 hereof), the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment (or liquidation) or in the
case of a partial Principal Prepayment on the amount of such prepayment (or
liquidation proceeds) exceeds (ii) the amount of interest paid or collected in
connection with such Principal Prepayment or such liquidation proceeds.
Prepayment Period: As to any Distribution Date, the time
period beginning with the opening of business on the sixteenth day of the
calendar month preceding the month in which such Distribution Date occurs (or,
with respect to the first Distribution Date, the period from the Cut-off Date)
and ending on the close of business on the fifteenth day of the month in which
such Distribution Date occurs.
Principal 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.
Prospectus Supplement: The Prospectus Supplement dated May
19, 1999 relating to the public offering of the Fixed Rate Certificates and
the Adjustable Rate Certificates offered thereby.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x)
required to be repurchased by the Seller or purchased by (1) the Master
Servicer, as applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2)
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 Seller (and the Seller is
the Master Servicer) or by the Master Servicer, the Stated Principal Balance)
of the Mortgage Loan as of the date of such purchase and (ii) accrued interest
thereon at the applicable Mortgage Rate (or, if such purchase or repurchase,
as the case may be, is effected by the Seller (and the Seller is the Master
Servicer) or 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 Seller (and the
Seller is the Master Servicer) or by the Master Servicer, the date through
which interest was last advanced and not reimbursed by the Master Servicer) to
(b) the Due Date in the month in which the Purchase Price is to be distributed
to Certificateholders.
Rating Agency: S&P and Fitch. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of such Liquidated Loan as of the date of such liquidation,
minus (ii) the Liquidation Proceeds, if any, received in connection with such
liquidation during the month in which such liquidation occurs, to the extent
applied as recoveries of principal of the Liquidated Loan. With respect to
each Mortgage Loan that has become the subject of a Deficient Valuation, (i)
if the value of the related Mortgaged Property was reduced below the principal
balance of the related Mortgage Note, the amount by which the value of the
Mortgaged Property was reduced below the principal balance of the related
Mortgage Note, and (ii) if the principal amount due under the related Mortgage
Note has been reduced, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation plus any reduction in the interest component of the Scheduled
Payments. With respect to each Mortgage Loan that has become the subject of a
Debt Service Reduction and any Distribution Date, the amount, if any, by which
the related Scheduled Payment was reduced.
Record Date: With respect to any Distribution Date, the
close of business on the last Business Day of the month preceding the month in
which the applicable Distribution Date occurs.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple
of 0.03125%) of the offered rates for United States dollar deposits for one
month that are quoted by the Reference Banks as of 11:00 a.m., New York City
time, on the related Interest Determination Date to prime banks in the London
interbank market for a period of one month in amounts approximately equal to
the outstanding balance of the Adjustable Rate Certificates on such Interest
Determination Date, provided that at least two such Reference Banks provide
such rate. If fewer than two offered rates appear, the Reference Bank Rate
will be the arithmetic mean (rounded upwards, if necessary, to the nearest
whole multiple of 0.03125%) of the rates quoted by one or more major banks in
New York City, selected by the Trustee, as of 11:00 a.m., New York City time,
on such date for loans in U.S. dollars to leading European banks for a period
of one month in amounts approximately equal to the outstanding balance of the
Adjustable Rate Certificates on such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Bankers Trust and
NatWest, N.A., provided that if any of the foregoing banks are not suitable to
serve as a Reference Bank, then any leading banks selected by the Trustee
which are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) not controlling, under the control of or under common control
with the Depositor or any affiliate thereof and (iii) which have been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any one of the Fixed Rate Certificates
and the Adjustable Rate Certificates.
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 and Periodic Rate Cap 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) be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio or Combined
Loan-to-Value Ratio, as applicable, no higher than that of the Deleted
Mortgage Loan; (vi) 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; and (xi)
comply with each representation and warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release submitted by
the Master Servicer to the Trustee, substantially in the form of Exhibits M
and N, as appropriate.
Required Adjustable Rate Carryover Reserve Fund Deposit:
With respect to any Distribution Date on which the Net Excess Spread is less
than 0.25%, the excess of (i) the product of 0.50% and the aggregate Stated
Principal Balance of the Adjustable Rate Mortgage Loans over (ii) the amount
of funds on deposit in the Adjustable Rate Carryover Reserve Fund prior to
deposits thereto on such Distribution Date. With respect to any Distribution
Date on which the Net Excess Spread is equal to or greater than 0.25%, the
excess of (i) $5,000 over (ii) the amount of funds on deposit in the
Adjustable Rate Carryover Reserve Fund prior to deposits thereto on such
Distribution Date.
Required Fixed Rate Carryover Reserve Fund Deposit: With
respect to any Distribution Date on which the Net Excess Spread is less than
0.25%, the excess of (i) the product of 0.50% and the aggregate Stated
Principle Balance of the Fixed Rate Mortgage Loans over (ii) the amount of
funds on deposit in the Fixed Rate Carryover Reserve Fund prior to deposits
thereto on such Distribution Date. With respect to any Distribution Date on
which the Net Excess Spread is equal to or greater than 0.25%, the excess of
(i) $5,000 over (ii) the amount of funds on deposit in the Fixed Rate
Carryover Reserve Fund prior to deposits thereto on such Distribution Date.
Required Percentage: With respect to: (i) the Fixed Rate
Trigger Event and any Distribution Date after the Fixed Rate Stepdown Date, is
equal to the quotient of (x) the excess of (I) the Stated Principal Balance of
the Fixed Rate Mortgage Loans as of the preceding Due Date over (II) the
Certificate Principal Balance of the most senior Class of the Fixed Rate
Certificates outstanding as of the preceding Master Servicer Advance Date
(provided that the Certificate Principal Balance of the most senior Class of
Fixed Rate Certificates shall mean the Fixed Rate Class A Certificate
Principal Balance until such principal balance is reduced to zero) and (y) the
Stated Principal Balance of the Fixed Rate Mortgage Loans; and (ii) the
Adjustable Rate Trigger Event and any Distribution Date after the Adjustable
Rate Stepdown Date, is equal to the quotient of (x) the excess of (I) the
Stated Principal Balance of the Adjustable Rate Mortgage Loans as of as of the
preceding Due Date over (II) the Certificate Principal Balance of the most
senior Class of the Adjustable Rate Certificates outstanding as of the
preceding Master Servicer Advance Date and (y) the Stated Principal Balance of
the Adjustable Rate Mortgage Loans outstanding.
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.
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.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations hereunder, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and
(iv) compliance with the obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Servicing Fee Rate on the Stated Principal Balance
of such Mortgage Loan for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan,
0.50% per annum.
Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and facsimile signature appear on a list of
servicing officers furnished to the Trustee by the Master Servicer on the
Closing Date pursuant to this Agreement, as such list may from time to time be
amended.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
Stated Principal Balance: With respect to any Mortgage Loan
or related REO Property (i) as of the Cut-off Date and each day thereafter to
and including the first Distribution Date, the Cut-off Date Principal Balance
thereof, and (ii) as of any Distribution Date after the first Distribution
Date, such Cut-off Date Principal Balance minus the sum of (a) the principal
portion of the Scheduled Payments (x) due with respect to such Mortgage Loan
during each Due Period ending prior to the immediately preceding Distribution
Date and (y) that were received by the Master Servicer as of the close of
business on the Determination Date related to such preceding Distribution Date
or with respect to which Advances were made on each Master Servicer Advance
Date prior to such preceding Distribution Date and (b) all Principal
Prepayments with respect to such Mortgage Loan received prior to the preceding
Prepayment Period, and all Liquidation Proceeds to the extent applied by the
Master Servicer as recoveries of principal in accordance with Section 3.12
with respect to such Mortgage Loan, that were received by the Master Servicer
as of the close of business on the Determination Date related to such
preceding Distribution Date. The Stated Principal Balance of any Mortgage Loan
immediately following a given Distribution Date shall be deemed to equal the
Stated Principal Balance of such Mortgage Loan as of the immediately following
Distribution Date, and, in particular, the Stated Principal Balance of any
Mortgage Loan that becomes a Liquidated Loan will be zero immediately
following the Distribution Date following the Prepayment Period in which such
Mortgage Loan becomes a Liquidated Loan. References herein to the Stated
Principal Balance of a Loan Group at any time shall mean the aggregate Stated
Principal Balance of all Mortgage Loans in such Loan Group at such time.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(c).
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 Class R Certificate: A Class R
Certificate designated as the Tax Matters Person Class R Certificate and
evidencing 0.001% Percentage Interest of the Class R Certificates.
3/27 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.
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 Fixed Rate Carryover Reserve Fund and the Adjustable Rate Carryover
Reserve Fund and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or otherwise;
(iv) the mortgagee's rights under the Insurance Policies with respect to the
Mortgage Loan; and (v) 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.
2/28 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.
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 95% to the Fixed Rate Certificates and Adjustable Rate
Certificates (other than the Class B-IO Certificates), and 5% to the Class
B-IO Certificates and the Class R Certificates, with the allocation among the
Fixed Rate Certificates and Adjustable Rate 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 with the allocation among the
Class BF-IO, Class BV-IO and Class R Certificates being two-fifths, two-fifths
and one-fifth, respectively. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.
Weighted Maximum Rate Cap: As of any Distribution Date, a
rate equal to (i) the weighted average of the Maximum Mortgage Rates on the
Adjustable Rate Mortgage Loans on such Distribution Date multiplied by 360
over the actual number of days in the Due Period minus (ii) the Servicing Fee
Rate.
Section 1.02. Certain REMIC-Related Defined Terms.
In addition to those defined terms defined in Section 1.01,
whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Adjustable Rate Adjusted Overcollateralization Amount: For
any Distribution Date, the excess of (c) the Stated Principal Balance of the
Adjustable Rate Mortgage Loans as of the preceding Due Date over (d) the
aggregate principal balance of the Class T3-V1, Class T3-V2, Class T3-V3, and
the Class T3-V4 Interests.
Adjustable Rate Adjusted Overcollateralization Release
Amount: For any Distribution Date, the lesser of the (a) the Adjustable Rate
Principal Distribution Amount with respect to the Adjustable Rate Mortgage
Loans, and (b) the amount, if any, by which the Adjustable Rate Adjusted
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the Adjustable Rate Principal
Distribution Amount for such date is applied on such date in reduction of the
principal balances of the Class T3-V1, Class T3-V2, Class T3-V3, and Class
T3-V4 Interests, exceeds the Adjustable Rate Specified Overcollateralization
Amount.
Class R-1 Interest: The uncertificated residual interest in
REMIC 1.
Class R-2 Interest: The uncertificated residual interest in
REMIC 2.
Class R-3 Interest: The uncertificated residual interest in
REMIC 3.
Class R-4 Interest: The uncertificated residual interest in
REMIC 4.
Class T1-F1 Interest: A regular interest in REMIC 1 that is
held as an asset of REMIC 2, that has an initial principal balance equal to
98% of the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date, that bears interest at a per annum rate equal to the Fixed Rate
Net Rate, and that has such other terms as are described in Section 4.06.
Class T1-F2 Interest: A regular interest in REMIC 1 that is
held as an asset of REMIC 2, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date, that bears interest at a per annum rate equal to the Fixed Rate
Net Rate, and that has such other terms as are described in Section 4.06.
Class T1-F3 Interest: A regular interest in REMIC 1 that is
held as an asset of REMIC 2, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date, that bears interest at a per annum rate equal to the Fixed Rate
Net Rate, and that has such other terms as are described in Section 4.06.
Class T1-V1 Interest: A regular interest in REMIC 1 that is
held as an asset of REMIC 2, that has an initial principal balance equal to
98% of the Stated Principal Balance of the Adjustable Rate Mortgage Loans as
of the Cut-off Date, that bears interest at a per annum rate equal to the
Adjustable Net Rate, and that has such other terms as are described in Section
4.06.
Class T1-V2 Interest: A regular interest in REMIC 1 that is
held as an asset of REMIC 2, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Adjustable Rate Mortgage Loans as of
the Cut-off Date, that bears interest at a per annum rate equal to the
Adjustable Net Rate, and that has such other terms as are described in Section
4.06.
Class T1-V3 Interest: A regular interest in REMIC 1 that is
held as an asset of REMIC 2, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Adjustable Rate Mortgage Loans as of
the Cut-off Date, that bears interest at a per annum rate equal to the
Adjustable Net Rate, and that has such other terms as are described in Section
4.06.
Class T2-F1 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that has an initial principal balance equal to
98% of the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date, that bears interest at a per annum rate equal to the Fixed Rate
Net Rate, and has such other terms as are described in Section 4.06.
Class T2-F2 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date, that bears interest at a per annum rate equal to the Fixed Rate
Standard Rate, and has such other terms as are described in Section 4.06.
Class T2-F3 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date, that bears interest at a per annum rate equal to the Fixed Rate
Net Rate, and has such other terms as are described in Section 4.06.
Class T2-F4 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that is entitled to 100% of the interest accruals
on the Class T1-F2 Interest in excess of interest accruals on the Class T2-F2
Interest, and that has such other terms as are described in Section 4.06. The
Class T2-F4 interest shall not have a principal balance.
Class T2-V1 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that has an initial principal balance equal to
98% of the Stated Principal Balance of the Adjustable Rate Mortgage Loans as
of the Cut-off Date, that bears interest at a per annum rate equal to the
Adjustable Net Rate, and that has such other terms as are described in Section
4.06.
Class T2-V2 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Adjustable Rate Mortgage Loans as of
the Cut-off Date, that bears interest at a per annum rate equal to the
Adjustable Rate Standard Rate, and that has such other terms as are described
in Section 4.06.
Class T2-V3 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Adjustable Rate Mortgage Loans as of
the Cut-off Date, that bears interest at a per annum rate equal to the
Adjustable Net Rate, and that has such other terms as are described in Section
4.06.
Class T2-V4 Interest: A regular interest in REMIC 2 that is
held as an asset of REMIC 3, that is entitled to 100% of the interest accruals
on the Class T1-V2 Interest in excess of interest accruals on the Class T2-V2
Interests, and that has such other terms as are described in Section 4.06. The
Class T2-F4 interest shall not have a principal balance.
Class T3-F1 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $43,798,000,
that bears interest at a rate equal to the Fixed Rate Standard Rate, and that
has such other terms as are described in Section 4.06.
Class T3-F2 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $30,822,000,
that bears interest at a rate equal to the Fixed Rate Standard Rate, and that
has such other terms as are described in Section 4.06.
Class T3-F3 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $19,666,000,
that bears interest at a rate equal to the Fixed Rate Standard Rate, and that
has such other terms as are described in Section 4.06.
Class T3-F4 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $22,736,000,
that bears interest at a rate equal to the Fixed Rate Standard Rate, and that
has such other terms as are described in Section 4.06.
Class T3-F5 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $11,628,000,
that bears interest at a rate equal to the Fixed Rate Standard Rate, and that
has such other terms as are described in Section 4.06.
Class T3-F6 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $15,500,000,
that bears interest at a rate equal to the Fixed Rate Standard Rate, and that
has such other terms as are described in Section 4.06.
Class T3-F7 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $5,037,000, that
bears interest at a rate equal to the Fixed Rate Standard Rate, and that has
such other terms as are described in Section 4.06.
Class T3-F8 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $2,713,000, that
bears interest at a rate equal to the Fixed Rate Standard Rate, and that has
such other terms as are described in Section 4.06.
Class T3-F9 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4, that has an initial principal balance of $3,100,000, that
bears interest at a rate equal to the Fixed Rate Standard Rate, and that has
such other terms as are described in Section 4.06.
Class T3-F10 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has such terms as are described in Section 4.06.
Class T3-F10 Distributable Amount: With respect to any
Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Accrual Period and the
denominator of which is 360, (ii) the Class T3-F10 Notional Balance
immediately before such distribution date, and (iii) the Class T3-F10
Pass-Through Rate.
Class T3-F10 Notional Balance: A notional principal balance
equal as of any date to the sum of the principal balances of the Class T2-F1
and T2-F3 interests for such date.
Class T3-F10 Pass-Through Rate: With respect to any
Distribution Date, a per annum rate equal to (i) the excess of the Fixed Rate
Net Rate for such date over (ii) the product of two and a fraction, the
numerator of which is the product of (x) the Fixed Rate Standard Rate and (y)
the principal balance of the Class T2-F2 Interest immediately prior to such
Distribution Date, and the denominator of which is the sum of the principal
balances of the Class T2-F2 and T2-F3 Interests immediately before such
Distribution Date.
Class T3-F11 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has such terms as are described in Section 4.06.
Class T3-F11 Distributable Amount: With respect to any
Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Accrual Period and the
denominator of which is 360, (ii) the Class T3-F11 Notional Balance
immediately before such Distribution Date, and (iii) the Class T3-F11
Pass-Through Rate.
Class T3-F11 Notional Balance: A notional principal balance
equal as of any date to the principal balance of the Class T2-F2 interest for
such date.
Class T3-F11 Pass-Through Rate: With respect to any
Distribution Date, a per annum rate equal to (i) the excess of the Fixed Rate
Standard Rate over (ii) the product of two and a fraction, the numerator of
which is the product of (x) the Fixed Rate Standard Rate and (y) the Class
T2-F2 Interest immediately prior to such Distribution Date, and the
denominator of which is the sum of the principal balances of the Class T2-F2
and T2-F3 Interests immediately before such Distribution Date.
Class T3-F12 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that is entitled to receive 100% of the amounts
distributable with respect to the Class T2-F4 Interest, and has such terms as
are described in Section 4.06.
Class T3-F13 Interest: A regular interest in REMIC 3 that is
held as an asset of REMIC 4 that will exist and have a principal balance to
the extent of the excess of (i) the aggregate Stated Principal Balance of the
Fixed Rate Mortgage Loans as of the Cut-off Date over (ii) the aggregate
Certificate Principal Balance of the Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2 and Class BF Certificates
on the Closing Date. The Class T3-F13 Interest will bear interest at the Fixed
Rate Standard Rate. Interest on the Class T3-F13 Interest will accrue and be
paid with principal on the Class T3-F13 Interest following the reduction of
the Certificate Principal Balances of the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF
Certificates to zero.
Class T3-V1 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has an initial principal balance of $277,200,000 and
bears interest at a rate equal to the Adjustable Rate Standard Rate.
Class T3-V2 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has an initial principal balance of $14,962,000 bears
interest at a rate equal to the Adjustable Rate Standard Rate.
Class T3-V3 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has an initial principal balance of $11,025,000 and
bears interest at a rate equal to the Adjustable Rate Standard Rate.
Class T3-V4 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has an initial principal balance of $11,813,000 and
bears interest at a rate equal to the Adjustable Rate Standard Rate.
Class T3-V5 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has such terms as are described in Section 4.06.
Class T3-V5 Distributable Amount: With respect to any
Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Accrual Period and the
denominator of which is 360, (ii) the Class T3-V5 Notional Balance, and (iii)
the Class T3-V5 Pass-Through Rate.
Class T3-V5 Notional Balance: A notional principal balance
equal as of any date to the sum of the principal balances of the Class T2-V1
and T2-V3 Interests for such date.
Class T3-V5 Pass-Through Rate: With respect to any
Distribution Date, a per annum rate equal to the excess of (i) the Adjustable
Net Rate for such date over (ii) the product of two and a fraction, the
numerator of which is the product of (x) the Adjustable Rate Standard Rate and
(y) the principal balance of the Class T2-V2 Interest immediately prior to
such Distribution Date, and the denominator of which is the sum of the
principal balances of the Class T2-V2 and Class T2-V3 Interests immediately
prior to such Distribution Date.
Class T3-V6 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that has such terms as are described in Section 4.06.
Class T3-V6 Distributable Amount: With respect to any
Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Accrual Period and the
denominator of which is 360, (ii) the Class T3-V6 Notional Balance, and (iii)
the Class T3-V6 Pass-Through Rate.
Class T3-V6 Notional Balance: A notional principal balance
equal as of any date to the principal balance of the Class T2-V2 Interests for
such date.
Class T3-V6 Pass-Through Rate: With respect to any
Distribution Date, a per annum rate equal to the excess of (i) the Adjustable
Rate Standard Rate for such date over (ii) the product of (x) two and (y) a
fraction, the numerator of which is the product of the Adjustable Rate
Standard Rate, and the denominator of which is the sum of the principal
balances of the Class T2-V2 and Class T2-V3 Interests immediately prior to
such Distribution Date.
Class T3-V7 Interest: A regular interest in REMIC 3 held as
an asset of REMIC 4 that is entitled to receive 100% of the amounts
distributable with respect to the Class T2-V4 Interest, and has such terms as
are described in Section 4.06.
Class T3-V8 Interest: A regular interest in REMIC 3 that is
held as an asset of REMIC 4 that will exist and have a principal balance to
the extent of the excess of (i) the aggregate Stated Principal Balance of the
Adjustable Rate Mortgage Loans as of the Cutoff Date over (ii) the aggregate
Certificate Principal Balance of the Class AV-1, Class MV-1, Class MV-2 and
Class BV Certificates on the Closing Date. The Class T3-V8 Interest will bear
interest at the Adjustable Rate Standard Rate. Interest on the Class T3-V8
Interest will accrue and be paid with principal on the Class T3-V8 Interest
following the reduction of the Certificate Principal Balances of the Class
AV-1, Class MV-1, Class MV-2, Class BV Certificates to zero.
Class T4-F1 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $43,798,000 and bears interest at the Class
AF-1 Pass-Through Rate. Ownership of the Class T4-F1 Interest is evidenced by
the Class AF-1 Certificates.
Class T4-F2 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $30,822,000 and bears interest at the Class
AF-2 Pass-Through Rate. Ownership of the Class T4-F2 Interest is evidenced by
the Class AF-2 Certificates.
Class T4-F3 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $19,666,000 and bears interest at the Class
AF-3 Pass-Through Rate. Ownership of the Class T4-F3 Interest is evidenced by
the Class AF-3 Certificates.
Class T4-F4 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $22,736,000 and bears interest at the Class
AF-4 Pass-Through Rate. Ownership of the Class T4-F4 Interest is evidenced by
the Class AF-4 Certificates.
Class T4-F5 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $11,628,000 and bears interest at the Class
AF-5 Pass-Through Rate. Ownership of the Class T4-F5 Interest is evidenced by
the Class AF-5 Certificates.
Class T4-F6 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $15,500,000 and bears interest at the Class
AF-6 Pass-Through Rate. Ownership of the Class T4-F6 Interest is evidenced by
the Class AF-6 Certificates.
Class T4-F7 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $5,037,000 and bears interest at the lesser of
the Class MF-1 Pass-Through Rate and the Fixed Rate Net Rate, Ownership of the
Class T4-F7 Interest is evidenced by the Class MF-1 Certificates.
Class T4-F8 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $2,713,000 and bears interest at the Class
MF-2 Pass-Through Rate. Ownership of the Class T4-F6 Interest is evidenced by
the Class MF-2 Certificates.
Class T4-F9 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $3,100,000 and bears interest at the lesser of
the Class BF Pass-Through Rate and the Fixed Rate Net Rate, Ownership of the
Class T4-F9 Interest is evidenced by the Class BF Certificates.
Class T4-F10 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F1 Interest in
excess of the Class AF-1 Pass-Through Rate. Ownership of the Class T4-F10
Interest is represented by the Class BF-IO Certificates.
Class T4-F11 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F2 Interest in
excess of the Class AF-2 Pass-Through Rate. Ownership of the Class T4-F11
Interest is evidenced by the Class BF-IO Certificates.
Class T4-F12 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F3 Interest in
excess of the Class AF-3 Pass-Through Rate. Ownership of the Class T4-F12
Interest is evidenced by the Class BF-IO Certificates.
Class T4-F13 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F4 Interest in
excess of the Class AF-4 Pass-Through Rate. Ownership of the Class T4-F13
Interest is evidenced by the Class BF-IO Certificates.
Class T4-F14 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F5 Interest in
excess of the Class AF-5 Pass-Through Rate. Ownership of the Class T4-F14
Interest is evidenced by the Class BF-IO Certificates.
Class T4-F15 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F6 Interest in
excess of the Class AF-6 Pass-Through Rate. Ownership of the Class T4-F15
Interest is evidenced by the Class BF-IO Certificates.
Class T4-F16 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F7 Interest in
excess of the Class MF-1 Pass-Through Rate. Ownership of the Class T4-F16
Interest is evidenced by the Class BF-IO Certificates.
Class T4-F17 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-F8 Interest in
excess of the Class MF-2 Pass-Through Rate. Ownership of the Class T4-F17
Interest is evidenced by the Class BF-IO Certificates.
Class T4-F18 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the amounts distributable on the Class T3-F10, Class
T3-F11, Class T3-F12, and Class T3-F13 Interests. The Class TF-18 Interest is
represented by the Class BF-IO Certificates.
Class T4-V1 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $277,200,000 and that bears interest at the
lesser of (i) the Class AV-1 Pass-Through Rate and (ii) the Adjustable Net
Rate. Ownership of the Class T4-V1 Interest is evidenced by the Class AV-1
Certificates.
Class T4-V2 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $14,962,000 and that bears interest at the
lesser of (i) the Class MV-1 Pass-Through Rate and (ii) the Adjustable Net
Rate. Ownership of the Class T4-V2 Interest is evidenced by the Class MV-1
Certificates.
Class T4-V3 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $11,025,000 and that bears interest at the
lesser of (i) the Class MV-2 Pass-Through Rate and (ii) the Adjustable Net
Rate. Ownership of the Class T4-V3 Interest is evidenced by the Class MV-2
Certificates.
Class T4-V4 Interest: A regular interest in REMIC 4 that has
an initial principal balance of $11,813,000 and that bears interest at the
lesser of the Class BV Pass-Through Rate and (ii) the Adjustable Net Rate.
Ownership of the Class T4-V4 Interest is evidenced by the Class BV
Certificates.
Class T4-V5 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-V1 Interest in
excess of the Class AV-1 Pass-Through Rate. Ownership of the Class T4-V5
Interest is evidenced by the Class BV-IO Certificates.
Class T4-V6 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-V2 Interest in
excess of the Class MV-1 Pass-Through Rate. Ownership of the Class T4-V6
Interest is evidenced by the Class BV-IO Certificates.
Class T4-V7 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the interest accruals on the Class T3-V3 Interest in
excess of the Class MV-2 Pass-Through Rate. Ownership of the Class T4-V7
Interest is evidenced by the Class BV-IO Certificates.
Class T4-V8 Interest: A regular interest in REMIC 4 that is
entitled to 100% of the amounts distributable with respect to the Class T3-V5,
Class T3-V6, Class T3-V7, and Class T3-V8 Interests. The Class T3-V8 Interest
is evidenced by the Class BV-IO Certificates.
Fixed Rate Adjusted Overcollateralization Amount: For any
Distribution Date, the excess of (a) the Stated Principal Balance of the Fixed
Rate Mortgage Loans as of the preceding Due Date over (b) the aggregate
principal balance of the Class T3-F1, Class T3-F2, Class T3-F-3, Class T3-F4,
Class T3-F5, Class T3-F6, Class T3-F7, Class T3-F8, and the Class T3-F9
Interests.
Fixed Rate Adjusted Overcollateralization Release Amount:
For any Distribution Date, the lesser of (a) the Fixed Rate Principal
Distribution Amount with respect to the Fixed Rate Mortgage Loans, and (b) the
amount, if any, by which the Fixed Rate Adjusted Overcollateralization Amount
for such date, calculated for this purpose on the basis of the assumption that
100% of the Fixed Rate Principal Distribution Amount for such date is applied
on such date in reduction of the principal balances of the Class T3-F1, Class
T3-F2, Class T3-F3, Class T3-F4, Class T3-F5, Class T3-F6, Class T3-F7, Class
T3-F8, and the Class T3-F9 Interests, exceeds the Fixed Rate Specified
Overcollateralization Amount.
REMIC: As described in the Preliminary Statements, which
term shall mean "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
REMIC 1: As described in the Preliminary Statement.
REMIC 2: As described in the Preliminary Statement.
REMIC 3: As described in the Preliminary Statement.
REMIC 4: As described in the Preliminary Statement.
REMIC 1 Regular Interests: As described in the Preliminary
Statement.
REMIC 2 Regular Interests: As described in the Preliminary
Statement.
REMIC 3 Regular Interests: As described in the Preliminary
Statement.
REMIC 4 Regular Interests: As described in the Preliminary
Statement.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final regulations and published
rulings, notices and announcements promulgated thereunder, as the foregoing
may be in effect from time to time as well as provisions of applicable state
laws.
Upper Tier REMIC: As described in the Preliminary Statement.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
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 on and 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 an Initial Certificate Account Deposit as
provided in this Agreement, other than principal due on the Mortgage Loans
prior to the Cut-off Date and interest accruing prior to the Cut-off Date. The
Seller confirms that, concurrently with such transfer and assignment, it has
deposited into the Certificate Account the Initial Certificate Account
Deposit.
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
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to
the Trustee for the use and benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the
Trust Fund.
In connection with any such transfer and assignment, 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 thirty (30) days following the Closing Date) (except as
provided in clause (vi) below) for the benefit of the Certificateholders, the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(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;
(ii) original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage to "The Bank
of New York, a New York banking corporation, as trustee under the
Pooling and Servicing Agreement dated as of May 1, 1999, CWABS,
Inc., Asset-Backed Certificates, Series 1999-2, 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;
(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
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 the event that in connection with any 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. 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 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 this Section 2.01.
If any document submitted for recording pursuant to this Agreement is (a) 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 (b) 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 (a) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (b) 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 as to which the related
Mortgaged Property and Mortgage File are located in (a) the State of
California or (b) any other jurisdiction under the laws of which the
recordation of the assignment specified in clause (iii) above is not necessary
to protect the Trustee's and the Certificateholders, interest in the related
Mortgage Loan, as evidenced by an Opinion of Counsel, delivered by the Seller
to the Trustee and a copy to the Rating Agencies, in lieu of recording the
assignment specified in clause (iii) above, the Seller may deliver an
unrecorded assignment in blank, in form otherwise suitable for recording to
the 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, 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 (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 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. Upon delivery of the Mortgage File for each Delay
Delivery Mortgage Loan, the Trustee shall send an Initial Certification for
such Delay Delivery Mortgage Loan in accordance with the provisions of Section
2.02.
Section 2.02. Acceptance by Trustee of the Mortgage Loans.
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 above
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 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(i) and (iii) with respect to such Mortgage Loan are
in its possession, and based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and relate to
such Mortgage Loan. The Trustee agrees to execute and deliver within 30 days
after the Closing Date to the Depositor, the Master Servicer and the Seller an
Interim Certification 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 it pursuant to this Agreement with
respect to such Mortgage Loan are in its possession (except those described in
Section 2.01(v)) 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) and (xiii) 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, the Trustee shall
deliver to the Depositor, the Master Servicer and the Seller a Delay Delivery
Certification 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 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 to
determine that it contains the following documents:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following
form: "Pay to the order of _______________ without recourse", with
all intervening endorsements that show a complete chain of
endorsement from the originator to the Seller;
(ii) the original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage in the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage;
(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
and all riders thereto if delivered pursuant to Section 2.06 (vi)
(otherwise such original or duplicate original lender's title policy
and all riders thereto shall be held in the Mortgage File upon
delivery as provided in such Section).
If, in the course of such review, the Trustee finds any
document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include such exceptions in such Final Certification (and Trustee shall state
in such Final Certification whether any Mortgage File does not then include
the original or duplicate original lender's title policy and all riders
thereto). If the public recording office in which a Mortgage or assignment
thereof is recorded retains the original of such Mortgage or assignment, a
copy of the original Mortgage or assignment so retained, with evidence of
recording thereon, certified to be true and complete by such recording office,
shall be deemed to satisfy the requirements of clause (ii), (iii) or (iv)
above, as applicable. The Seller shall promptly correct or cure such defect
referred to above within 90 days from the date it was so notified of such
defect and, if the Seller does not correct or cure such defect within such
period, the Seller shall either (a) if the time to cure such defect expires
prior to the end of the second anniversary of the Closing Date, substitute for
the related 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 Trustee 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 Trustee's interest in
any Mortgage Loan released pursuant hereto.
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 2.01(i)-(vi) above shall constitute the sole
remedy respecting such defect available to the Trustee, the Depositor, and any
Certificateholder against the Seller.
Section 2.03. Representations, Warranties and Covenants of
the Master Servicer and the Seller.
(a) The Master Servicer hereby represents and warrants to
the Depositor and the Trustee as follows, as of the date hereof:
(i) The Master Servicer 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 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 corporate power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized
by all necessary corporate action on the part of the Master Servicer
the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable against the
Master Servicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer under this Agreement, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of
or compliance with the terms hereof are in the ordinary course of
business of the Master Servicer and will not (A) result in a
material breach of any term or provision of the charter or by-laws
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 FNMA or FHLMC 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.
(b) The Seller hereby represents and warrants to the
Depositor and the Trustee as follows, as of the date hereof (unless otherwise
indicated or the context otherwise requires, percentages with respect to the
Mortgage Loans in a Loan Group are measured by the Cut-off Date Principal
Balance of the Mortgage Loans in the related Loan Group):
(i) The Seller is duly organized as a New York corporation and
is validly existing and in good standing under the laws of the State
of New York and is duly authorized and qualified to transact any and
all business contemplated by this Agreement to be conducted by the
Seller in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure
its ability to enforce each Mortgage Loan, to sell the Mortgage
Loans in accordance with the terms of this Agreement and to perform
any of its other obligations under this Agreement in accordance with
the terms hereof.
(ii) The Seller has the full corporate power and authority to
sell each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action
on the part of the Seller the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under this
Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance
with the terms hereof 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 FNMA or FHLMC and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to sell the Mortgage Loans or
to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
delivery and performance by the Seller of, or compliance by the
Seller with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization
or order is required, the Seller has obtained the same.
(vii) The information set forth on Exhibit F-1 hereto with
respect to each Mortgage Loan is true and correct in all material
respects as of the Closing Date.
(viii) The Seller will treat the transfer of the Mortgage Loans
to the Depositor as a sale of the Mortgage Loans for all tax,
accounting and regulatory purposes.
(ix) Approximately 0.01% of the Mortgage Loans are more than 30
days delinquent in payment of principal and interest.
(x) No Fixed Rate Mortgage Loan that was secured by a first
lien on the related Mortgaged Property had a Loan-to-Value Ratio at
origination in excess of 90%; no Fixed Rate Mortgage Loan that was
secured by a second lien on the related Mortgaged Property had a
Combined Loan-to-Value Ratio at origination in excess of 100%; and
no Adjustable Rate Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 90%.
(xi) Each Fixed Rate Mortgage Loan is secured by a valid and
enforceable first or second lien on the related Mortgaged Property
and each Adjustable Rate Mortgage Loan is secured by a valid and
enforceable first lien on the related Mortgaged Property, in each
case subject only to (1) the lien of non-delinquent current real
property taxes and assessments, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal
made in connection with the origination of the related Mortgage
Loan, (3) other matters to which like properties are commonly
subject that do not materially interfere with the benefits of the
security intended to be provided by such Mortgage and (4) only in
the case of each such Fixed Rate Mortgage Loan which is secured by a
valid and enforceable second lien on the Mortgaged Property, any
senior mortgage loan secured by such Mortgaged Property and
identified in the Mortgage File related to such Mortgage Loan.
Approximately 95.03% of the Fixed Rate Mortgage Loans and 100% of
the Adjustable Rate Mortgage Loans were secured by first liens on
the related Mortgaged Properties. Approximately 4.97% of the Fixed
Rate Mortgage Loans were secured by second liens on the related
Mortgaged Properties.
(xii) Immediately prior to the assignment of the Mortgage Loans
to the Depositor, the Seller had good title to, and was the sole
owner of, each 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 (xix) below.
(xvi) As of the Closing Date, to the best of the Seller's
knowledge, each Mortgaged Property is free of material damage and is
in good repair.
(xvii) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby will not
involve the violation of any such laws.
(xviii) As of the Closing Date, neither the Seller nor any
prior holder of any Mortgage has modified the Mortgage in any
material respect (except that a Mortgage Loan may have been modified
by a written instrument that has been recorded or submitted for
recordation, if necessary, to protect the interests of the
Certificateholders and the original or a copy of which has been
delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged
Property in whole or in part from the lien of such Mortgage; or
executed any instrument of release, cancellation, modification
(except as expressly permitted above) or satisfaction with respect
thereto.
(xix) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the
origination of each Mortgage Loan, each such policy is valid and
remains in full force and effect, and each such policy was issued by
a title insurer qualified to do business in the jurisdiction where
the Mortgaged Property is located and acceptable to FNMA or FHLMC
and is in a form acceptable to FNMA or FHLMC, which policy insures
the Seller and successor owners of indebtedness secured by the
insured Mortgage, as to the first priority lien, of the Mortgage
subject to the exceptions set forth in paragraph (iv) above; to the
best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission,
anything that would impair the coverage of such mortgage title
insurance policy.
(xx) No Mortgage Loan was the subject of a Principal Prepayment
in full between the Closing Date and the Cut-off Date.
(xxi) To the best of the Seller's knowledge, all of the
improvements that were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(xxii) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation. To the best of the
Seller's knowledge, all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy
of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from
the appropriate authorities, unless the lack thereof would not have
a material adverse effect on the value of such Mortgaged Property,
and the Mortgaged Property is lawfully occupied under applicable
law.
(xxiii) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and under
applicable law, except that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. To the best of the Seller's knowledge, all parties to the
Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage
have been duly and properly executed by such parties.
(xxiv) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder
and any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses
incurred in making, or closing or recording the Mortgage Loans were
paid.
(xxv) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise
by judicial foreclosure.
(xxvi) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Certificateholders to the trustee under the deed of
trust, except in connection with a trustee's sale after default by
the Mortgagor.
(xxvii) Each Mortgage Note and each Mortgage is in
substantially one of the forms attached hereto as Exhibit P
acceptable in form to FNMA or FHLMC.
(xxviii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller
have been capitalized under the Mortgage or the related Mortgage
Note.
(xxix) The origination, underwriting and collection practices
used by the Seller with respect to each Mortgage Loan have been in
all respects legal, prudent and customary in the mortgage lending
and servicing business.
(xxx) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations.
(xxxi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(xxxii) Each Mortgage Loan contains a customary "due on sale"
clause.
(xxxiii) Approximately 2.08% of the Fixed Rate Mortgage Loans
and approximately 2.97% of the Adjustable Rate Mortgage Loans are
secured by two- to four-family dwellings. Approximately 3.37% of the
Fixed Rate Mortgage Loans and approximately 3.59% of the Adjustable
Rate Mortgage Loans are secured by condominium units. Approximately
87.14% of the Fixed Rate Mortgage Loans and approximately 85.01% of
the Adjustable Rate Mortgage Loans are secured by detached
one-family dwellings. Approximately 2.28% of the Fixed Rate Mortgage
Loans and approximately 1.75% of the Adjustable Rate Mortgage Loans
are secured by manufactured housing. Approximately 5.13% of the
Fixed Rate Mortgage Loans and approximately 6.69% of the Adjustable
Rate Mortgage Loans are secured by PUDs.
(xxxiv) No Fixed Rate Mortgage Loan had a principal balance in
excess of $715,000 at origination and no Adjustable Rate Mortgage
Loan had a principal balance in excess of $622,500 at origination.
(xxxv) Each Fixed Rate Mortgage Loan was originated in or after
July 1998.
(xxxvi) Each Adjustable Rate Mortgage Loan was originated in or
after December 1997; each Adjustable Rate Mortgage Loan other than a
2/28 or 3/27 Mortgage Loan had an initial Adjustment Date no later
than December 1999; each 2/28 Mortgage Loan had an initial
Adjustment Date no later than June 1, 2001; each 3/27 Mortgage Loan
had an initial Adjustment Date no later than June 1, 2002.
(xxxvii) Approximately 76.75% of the Fixed Rate Mortgage Loans
and approximately 84.82% of the Adjustable Rate Mortgage Loans
provide for a prepayment penalty.
(xxxviii) No Mortgage Loan provides for primary mortgage
insurance.
(xxxix) On the basis of representations made by the Mortgagors
in their loan applications, no more than approximately 5.15% of the
Fixed Rate Mortgage Loans are secured by investor properties, and at
least approximately 94.35% of the owner-occupied Fixed Rate Mortgage
Loans are secured by owner-occupied Mortgaged Properties that are
primary residences (in each case measured by the Cut-off Date
Principal Balance of the Fixed Rate Mortgage Loans).
(xl) On the basis of representations made by the Mortgagors in
their loan applications, no more than approximately 4.71% of the
Adjustable Rate Mortgage Loans are secured by investor properties,
and at least approximately 94.84% of the owner-occupied Adjustable
Rate Mortgage Loans are secured by owner-occupied Mortgaged
Properties that are primary residences (in each case measured by the
Cut-off Date Principal Balance of the Adjustable Rate Mortgage
Loans).
(xli) 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)
above 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.
(xlii) 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.
(xliii) 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.
(xliv) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the
Seller's knowledge, there is no material event that, with the
passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event
of acceleration under the Mortgage or the related Mortgage Note; and
the Seller has not waived any default, breach, violation or event of
acceleration.
(xlv) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs, that, to the best of the Seller's knowledge,
does not include cooperatives or mobile homes and does not
constitute other than real property under state law.
(xlvi) Each Mortgage Loan is being serviced by the Master
Servicer.
(xlvii) 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.
(xlviii) 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.
(xlix) Each Mortgage Loan was underwritten in all material
respects in accordance with the Seller's underwriting guidelines for
B and C quality mortgage loans or, with respect to Mortgage Loans
originated in accordance with other underwriting guidelines, in
substantial compliance of the Seller's guidelines.
(l) 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 FNMA and FHLMC.
(li) 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.
(lii) The Mortgage Rates borne by the Fixed Rate Mortgage Loans
as of the Cut-off Date ranged from 6.375% per annum to 17.375% per
annum and the weighted average Mortgage Rate as of the Cut-off Date
was 9.543% per annum.
(liii) The Mortgage Rates borne by the Adjustable Rate Mortgage
Loans as of the Cut-off Date ranged from 5.500% per annum to 16.125%
per annum and the weighted average Mortgage Rate as of the Cut-off
Date was 8.943% per annum.
(liv) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Master
Servicer's portfolio at the Closing Date as to which the
representations and warranties made as to the Mortgage Loans set
forth in this Section 2.03(b) can be made. Such selection was not
made in a manner that would adversely affect the interests of
Certificateholders.
(lv) The Gross Margins on the Adjustable Rate Mortgage Loans
range from approximately 4.000% to 10.850% and the weighted average
Gross Margin was approximately 6.244%.
(lvi) Except for 269 Fixed Rate Mortgage Loans representing
approximately 13.40% of the Fixed Rate Mortgage Loans and except for
384 Adjustable Rate Mortgage Loans representing approximately 13.00%
of the Adjustable Rate Mortgage Loans each Mortgage Loan has a
payment date on or before the Due Date in the month of the first
Distribution Date.
(lvii) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
(lviii) [Reserved]
(lix) 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.
(lx) 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.
(lxi) [Reserved]
(lxii) 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.
(lxiii) Each Mortgage Loan was originated (within the meaning
of Section 3(a)(41) of the Securities Exchange Act of 1934, as
amended) by an entity that satisfied at the time of origination the
requirements of Section 3(a)(41) of the Securities Exchange Act of
1934, as amended.
(lxiv) No Mortgage Loan was either a "consumer credit contract"
or a "purchase money loan" as such terms are defined in 16 C.F.R.
Section 433 nor is any Mortgage Loan a "mortgage" as defined in 15
U.S.C. ss. 1602(aa).
(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 the
representations and warranties set forth in Sections 2.03(a) and (b),
respectively, that within 90 days of the earlier of the discovery by such
Representing Party or receipt of written notice by such Representing Party
from any party of a breach of any representation or warranty set forth herein
made that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects and, if such breach is not so cured, shall, (i) if such
90-day period expires prior to the second anniversary of the Closing Date,
remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a Replacement Mortgage Loan, in the manner and subject
to the conditions set forth in this Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the
manner set forth below; provided that any such substitution pursuant to (i)
above or repurchase pursuant to (ii) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof and any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit N. 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 of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of all such Deleted
Mortgage Loans. An amount equal to the aggregate of the deficiencies described
in the preceding sentence (such amount, the "Substitution Adjustment Amount")
shall be deposited into the Certificate Account by the Seller delivering such
Replacement Mortgage Loan on 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 Master
Servicer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of
Delaware and has full power and authority (corporate and other)
necessary to own or hold its properties and to conduct its business
as now conducted by it and to enter into and perform its obligations
under this Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly
authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, subject, as to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms
hereof 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.
(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, and following the
transfer of the Mortgage Loans to it by the Seller, the Depositor had good
title to the Mortgage Loans and the Mortgage Notes were subject to no offsets,
claims, defenses or counterclaims.
It is understood and agreed that the representations and
warranties set forth in the two immediately preceding paragraphs shall survive
delivery of the Mortgage Files to the Trustee. Upon discovery by the Depositor
or the Trustee of a breach of any of the foregoing representations and
warranties set forth in the immediately preceding paragraph (referred to
herein as a "breach"), which breach materially and adversely affects the
interest of the Certificateholders, the party discovering such breach shall
give prompt written notice to the others and to each Rating Agency. The
Depositor hereby covenants with respect to the representations and warranties
made by it in this Section 2.04 that within 90 days of the earlier of the
discovery it or receipt of written notice by it from any party of a breach of
any representation or warranty set forth herein made that materially and
adversely affects the interests of the Certificateholders in any Mortgage
Loan, it shall cure such breach in all material respects and, if such breach
is not so cured, shall repurchase or replace the affected Mortgage Loan or
Loans in accordance with the procedure set forth in Section 2.03(c).
Section 2.05. Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage Loan that is not in default or as to
which default is not imminent, no repurchase or substitution pursuant to
Sections 2.02, 2.03 or 2.04 shall be made unless the Representing Party making
such repurchase or substitution delivers to the Trustee 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 86OG(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
Trustee as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements of the insurer under each Required Insurance Policy;
and
(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the
Depositor, any affiliate of the Depositor or the Trustee and
prepared by the Master Servicer pursuant to this Agreement will
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the information, certificate,
statement or report not misleading.
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, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) subject to Section 3.12(a),
to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan; provided that the Master
Servicer shall take no action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan or
the rights and interests of the Depositor and the Trustee under this
Agreement. The Master Servicer shall represent and protect the interest of the
Trust Fund in the same manner as it currently protects its own interest in
mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan and shall not make or permit any modification,
waiver or amendment of any term of any Mortgage Loan which would cause the
Trust Fund to fail to qualify as a REMIC or result in the imposition of any
tax under Section 860(a) or 860(d) of the Code, but in any case not in any
manner that is a lesser standard than that provided in the first sentence of
this Section 3.01. Without limiting the generality of the foregoing, the
Master Servicer, in its own name or in the name of the Depositor and the
Trustee, is hereby authorized and empowered by the Depositor and the Trustee,
when the Master Servicer believes it appropriate in its reasonable judgment,
to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect
to the Mortgaged Properties held for the benefit of the Certificateholders.
The Master Servicer shall prepare and deliver to the Depositor and/or the
Trustee such documents requiring execution and delivery by any or all of them
as are necessary or appropriate to enable the Master Servicer to service and
administer the Mortgage Loans. Upon receipt of such documents, the Depositor
and/or the Trustee shall execute such documents and deliver them to the Master
Servicer.
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.
Section 3.03. Rights of the Depositor, the Trustee in
Respect of the Master Servicer.
Neither the Trustee nor 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.
(a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located
to collect all payments called for under the terms and provisions of the
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance
Policy. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge or any prepayment charge or
penalty interest in connection with the prepayment of a Mortgage Loan and (ii)
extend the due dates for payments due on a Mortgage Note for a period not
greater than 270 days. In the event of any such arrangement, the Master
Servicer shall make Advances on the related Mortgage Loan during the scheduled
period in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
(b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to
be deposited on a daily basis within one Business Day of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and
interest due on the Mortgage Loans before the Cut-off Date) and the following
amounts required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other
than interest accrued on the Mortgage Loans prior to May 1, 1999,
and the Initial Certificate Account Deposit;
(iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Master Servicer's
normal servicing procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments;
(vi) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment
Amount;
(viii) all Advances made by the Master Servicer pursuant to
Section 4.01; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master
Servicer into the Certificate Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of prepayment penalties, late payment charges or assumption fees,
if collected, need not be remitted by the Master Servicer. In the event that
the Master Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the institution maintaining the Certificate Account,
to withdraw such amount from the Certificate Account, any provision herein to
the contrary notwithstanding. Such withdrawal or direction may be accomplished
by delivering written notice thereof to the institution maintaining the
Certificate Account, that describes the amounts deposited in error in the
Certificate Account. The Master Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited
in the Certificate Account shall be held in trust for the Certificateholders
until withdrawn in accordance with Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of
the Certificateholders, the Distribution Account. The Trustee shall, promptly
upon receipt, deposit in the Distribution Account and retain therein the
following:
(i) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a); and
(ii) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) 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) [Reserved.]
(e) Each institution that maintains the Certificate Account,
the Distribution Account, the Fixed Rate Carryover Reserve Fund or the
Adjustable Rate Carryover Reserve Fund shall invest the funds in each such
account, as directed by the Master Servicer, in Permitted Investments, which
shall mature not later than (i) in the case of the Certificate Account, the
second Business Day next preceding the related Distribution Account Deposit
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account, then such Permitted
Investment shall mature not later than the Business Day next preceding such
Distribution Account Deposit Date) and (ii) in the case of the Distribution
Account, the Fixed Rate Carryover Reserve Fund and the Adjustable Rate
Carryover Reserve Fund, the Business Day immediately preceding the first
Distribution Date that follows the date of such investment (except that if
such Permitted Investment is an obligation of the institution that maintains
such Distribution Account, the Fixed Rate Carryover Reserve Fund or Adjustable
Rate Carryover Reserve Fund, then such Permitted Investment shall mature not
later than such Distribution Date) and, 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,
except in connection with Permitted Investments made with respect to funds in
(x) the Fixed Rate Carryover Reserve Fund which shall be made in the name of
the Trustee, for the benefit of the Class BF-IO Certificateholders and (y) the
Adjustable Rate Carryover Reserve Fund which shall be made in the name of the
Trustee, for the benefit of the Class BV-IO Certificateholders. In the case of
(x) 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, (y) the Fixed Rate Carryover Reserve Fund, all
income and gain net of any losses realized from any such investment shall be
for the benefit of the Class BF-IO Certificateholders and shall be remitted to
the Class BF-IO Certificateholders monthly as provided herein, and (z) the
Adjustable Rate Carryover Reserve Fund, all income and gain net of any losses
realized from any such investment shall be for the benefit of the Class BV-IO
Certificateholders and shall be remitted to the Class BV-IO Certificateholders
monthly 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, as
applicable, out of the Master Servicer's own funds immediately as realized.
Any losses incurred in the Fixed Rate Carryover Reserve Fund in respect of any
such investments shall be charged against amounts on deposit in the Fixed Rate
Carryover Reserve Fund (or such investments) immediately as realized. Any
losses incurred in the Adjustable Rate Carryover Reserve Fund in respect of
any such investments shall be charged against amounts on deposit in the
Carryover 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 Fixed Rate Carryover Reserve Fund or the Adjustable
Rate Carryover Reserve Fund and made in accordance with this Section 3.05.
(f) The Master Servicer shall give at least 30 days advance
notice to the Trustee, the Seller, 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 Fixed Rate Carryover
Reserve Fund or the Adjustable Rate Carryover Reserve Fund prior to any change
thereof.
Section 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts.
To the extent required by the related Mortgage Note, the
Master Servicer shall establish and maintain one or more accounts (each, an
"Escrow Account") and deposit and retain therein all collections from the
Mortgagors (or advances by the Master Servicer) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items,
to reimburse the Master Servicer out of related collections for any payments
made pursuant to Sections 3.01 hereof (with respect to taxes and assessments
and insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account or to clear and
terminate the Escrow Account at the termination of this Agreement in
accordance with Section 9.01 hereof. The Escrow Accounts shall not be a part
of the Trust Fund.
Section 3.07. Access to Certain Documentation and
Information Regarding the Mortgage Loans.
The Master Servicer shall afford the Depositor and the
Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance policies and other matters relating
to this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Master Servicer designated by it.
Upon reasonable advance notice in writing if required by
federal regulation, the Master Servicer will provide to each Certificateholder
that is a savings and loan association, bank or insurance company certain
reports and reasonable access to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates; provided that the Master Servicer shall be
entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Master Servicer in providing such reports and access.
Section 3.08. Permitted Withdrawals from the Certificate
Account, Distribution Account, the Fixed Rate
Carryover Reserve Fund and the Adjustable Rate
Carryover Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously
paid to or withheld by the Master Servicer), as servicing
compensation in accordance with Section 3.15, that portion of any
payment of interest that equals the Servicing Fee for the period
with respect to which such interest payment was made, and, as
additional servicing compensation, those other amounts set forth in
Section 3.15;
(ii) to reimburse the Master Servicer for Advances made by it
with respect to the Mortgage Loans, such right of reimbursement
pursuant to this subclause (ii) being limited to amounts received on
particular Mortgage Loan(s) (including, for this purpose,
Liquidation Proceeds) that represent late recoveries of payments of
principal and/or interest on such particular Mortgage Loan(s) in
respect of which any such Advance was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer from Insurance Proceeds
for Insured Expenses covered by the related Insurance Policy;
(v) to pay the Master Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances, the Master
Servicer's right to reimbursement of Servicing Advances pursuant to
this subclause (v) with respect to any Mortgage Loan being limited
to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds and purchase and repurchase
proceeds) that represent late recoveries of the payments for which
such advances were made pursuant to Section 3.01 or Section 3.06;
(vi) to pay to the Seller, the Depositor or the Master
Servicer, as applicable, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.12, all amounts received thereon
and not taken into account in determining the related Stated
Principal Balance of such repurchased Mortgage Loan;
(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 amount of Fixed Rate Interest
Funds, Fixed Rate Principal Funds, Adjustable Rate Interest Funds and
Adjustable Rate Principal Funds, to the extent on deposit, and the Trustee
shall deposit such amount in the Distribution Account.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Certificate Account pursuant to subclauses
(i), (ii), (iv), (v) and (vi) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master
Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
Loan(s), and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for distribution to the Certificateholders in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of
any taxes that it is authorized to retain pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Distribution Account for the following purposes:
(i) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds
in or credited to the Distribution Account;
(ii)to withdraw pursuant to Section 3.05 any amount deposited
in the Distribution Account and not required to be deposited
therein; and
(iii) 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 Fixed Rate
Carryover Reserve Fund for distribution to the Fixed Rate 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 Fixed Rate Carryover Reserve Fund for the
following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited
in the Fixed Rate Carryover Reserve Fund and not required to be
deposited therein; and
(ii) to clear and terminate the Fixed Rate Carryover Reserve
Fund upon termination of the Agreement pursuant to Section 9.01
hereof.
(d) The Trustee shall withdraw funds from the Adjustable
Rate Carryover Reserve Fund for distribution to the Adjustable Rate
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 Adjustable Rate
Carryover Reserve Fund for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited
in the Adjustable Rate Carryover Reserve Fund and not required to be
deposited therein; and
(ii) to clear and terminate the Adjustable Rate Carryover
Reserve Fund upon termination of the Agreement pursuant to Section
9.01 hereof.
Section 3.09. [Reserved.]
Section 3.10. Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such policy shall be sufficient to prevent the related
Mortgagor and/or mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying endorsement
that contains, a standard mortgagee clause. The Master Servicer shall also
cause flood insurance to be maintained on property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, to the extent described
below. Pursuant to Section 3.05 hereof, any amounts collected by the Master
Servicer under any such policies (other 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.
In the event that the Master Servicer shall obtain and
maintain a blanket policy insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.10, it being
understood and agreed that such policy may contain a deductible clause on
terms substantially equivalent to those commercially available and maintained
by comparable servicers. If such policy contains a deductible clause, the
Master Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with the first sentence
of this Section 3.10, and there shall have been a loss that would have been
covered by such policy, deposit in the Certificate Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of itself,
the Depositor and the Trustee for the benefit of the Certificateholders,
claims under any such blanket policy.
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a),
when any property subject to a Mortgage has been or is about to be conveyed by
the Mortgagor, the Master Servicer shall to the extent that it has knowledge
of such conveyance, enforce any due-on-sale clause contained in any Mortgage
Note or Mortgage, to the extent permitted under applicable law and
governmental regulations, but only to the extent that such enforcement will
not adversely affect or jeopardize coverage under any Required Insurance
Policy. Notwithstanding the foregoing, the Master Servicer is not required to
exercise such rights with respect to a Mortgage Loan if the Person to whom the
related Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the terms and conditions contained in the Mortgage Note and Mortgage
related thereto and the consent of the mortgagee under such Mortgage Note or
Mortgage is not otherwise so required under such Mortgage Note or Mortgage as
a condition to such transfer. In the event that the Master Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.11(b), to take or enter into an assumption
and modification agreement from or with the person to whom such property has
been or is about to be conveyed, pursuant to which such person becomes liable
under the Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan shall
continue to be covered (if so covered before the Master Servicer enters such
agreement) by the applicable Required Insurance Policies. The Master Servicer,
subject to Section 3.11(b), is also authorized with the prior approval of the
insurers under any Required Insurance Policies to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the 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 Rate, the Minimum Rate, the Gross Margin, the Periodic Rate Cap, the
Adjustment Date and any other term affecting the amount or timing of payment
on the Mortgage Loan) may be changed. In addition, the substitute Mortgagor
and the Mortgaged Property must be acceptable to the Master Servicer in
accordance with its underwriting standards as then in effect. The Master
Servicer shall notify the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the original of such
substitution or assumption agreement, which in the case of the original shall
be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. Any fee collected by
the Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.
Section 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized
Losses; Repurchase of Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and
as to which no satisfactory arrangements can be made for collection of
delinquent payments. In connection with such foreclosure or other conversion,
the Master Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities and the requirements of the insurer under any
Required Insurance Policy; provided that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of
the Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Certificate Account pursuant to Section 3.08 hereof). The Master Servicer
shall be responsible for all other costs and expenses incurred by it in any
such proceedings; provided that it shall be entitled to reimbursement thereof
from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that
a Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
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 prior to three years after its acquisition by the Trust
Fund or, at the expense of the Trust Fund, 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 unless 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, in which case the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions contained
in such Opinion of Counsel). Notwithstanding any other provision of this
Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject the Trust Fund to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Master Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of
any such taxes.
The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to a determination by the Master
Servicer that the proceeds of such foreclosure would exceed the costs and
expenses of bringing such a proceeding. The income earned from the management
of any Mortgaged Properties acquired through foreclosure or other judicial
proceeding, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Servicing Fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited
into the Certificate Account. To the extent the income received during a
Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage
Loan, net of any payment to the Master Servicer as provided above, shall be
deposited in the Certificate Account on the next succeeding Determination Date
following receipt thereof for distribution on the related Distribution Date,
except that any Excess Proceeds shall be retained by the Master Servicer as
additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12;
second, to reimburse the Master Servicer for any unreimbursed Advances,
pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to accrued and
unpaid interest (to the extent no Advance has been made for such amount) on
the Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due
Date occurring in the month in which such amounts are required to be
distributed; and fourth, as a recovery of principal of the Mortgage Loan.
(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 91 days or more
delinquent at a price equal to the Purchase Price. 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. 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 Fixed Rate Carryover Reserve Fund, the Adjustable Rate Carryover
Reserve Fund or the related subservicing account. From time to time and as
shall be appropriate for the servicing or foreclosure of any Mortgage Loan,
including for such purpose, collection under any policy of flood insurance any
fidelity bond or errors or omissions policy, or for the purposes of effecting
a partial release of any Mortgaged Property from the lien of the Mortgage or
the making of any corrections to the Mortgage Note or the Mortgage or any of
the other documents included in the Mortgage File, the Trustee shall, upon
delivery to the Trustee of a Request for Release in the form of Exhibit M
signed by a Servicing Officer, release the Mortgage File to the Master
Servicer. Subject to the further limitations set forth below, the Master
Servicer shall cause the Mortgage File or documents so released to be returned
to the Trustee when the need therefor by the Master Servicer no longer exists,
unless the Mortgage Loan is liquidated and the proceeds thereof are deposited
in the Certificate Account, in which case the Trustee shall deliver the
Request for Release to the Master Servicer.
If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the
documents therein that shall have been released by the Trustee to be returned
to the Trustee within 21 calendar days after possession thereof shall have
been released by the Trustee unless (i) the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Certificate Account, and the Master Servicer shall have delivered to
the Trustee a Request for Release in the form of Exhibit N or (ii) the
Mortgage File or document shall have been delivered to an attorney or to a
public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property and the Master Servicer shall have delivered to the
Trustee an Officer's Certificate of a Servicing Officer certifying as to the
name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
Section 3.14. Documents, Records and Funds in Possession of
Master Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Trustee as required by this Agreement
all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise
are collected by the Master Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, the Master Servicer in respect
of any Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, including but not limited to, any funds
on deposit in the Certificate Account, shall be held by the Master Servicer
for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trustee, 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, Fixed Rate Carryover Reserve Fund
or Adjustable Rate Carryover Reserve Fund or in any Escrow Account (as defined
in Section 3.06), or any funds that otherwise are or may become due or payable
to the Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of set off against any
Mortgage File or any funds collected on, or in connection with, a Mortgage
Loan, except, however, that the Master Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to the Master Servicer under this Agreement.
Section 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain or withdraw from the Certificate Account
out of each payment of interest on a Mortgage Loan included in the Trust Fund
an amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
Additional servicing compensation in the form of any Excess
Proceeds, prepayment penalties, assumption fees, late payment charges,
Prepayment Interest Excess, and all income and gain net of any losses realized
from Permitted Investments shall be retained by the Master Servicer to the
extent not required to be deposited in the Certificate Account pursuant to
Section 3.05 or 3.12(a) hereof. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including payment of any premiums for hazard insurance, as required
by Section 3.10 hereof and maintenance of the other forms of insurance
coverage required by Section 3.10 hereof) and shall not be entitled to
reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.
Section 3.16. Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC
and to comparable regulatory authorities supervising Holders of the
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the Master Servicer
designated by it. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation
shall not constitute a breach of this Section.
Section 3.17. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before May 31 of each year commencing May 31, 2000, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of
the performance of the Master Servicer under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and (iii) to
the best of such officer's knowledge, each Subservicer has fulfilled all its
obligations under its Subservicing Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation specifying
each such default known to such officer and the nature and status thereof. The
Trustee shall forward a copy of each such statement to each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.
Section 3.18. Annual Independent Public Accountants'
Servicing Statement; Financial Statements.
On or before the later of (i) May 31 of each year, beginning
with May 31, 2000 or (ii) within 30 days of the issuance of the annual audited
financial statements beginning with the audit for the period ending in 2000,
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, Inc. is the Master Servicer hereunder, the
Master Servicer's parent company's publicly available annual financial
statements), if any, promptly after they become available.
ARTICLE IV.
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.
Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the
Certificate Account no later than 1:00 p.m. Pacific time on the Master
Servicer Advance Date in immediately available funds. The Master Servicer
shall be obligated to make any such Advance only to the extent that such
advance would not be a Nonrecoverable Advance. If the Master Servicer shall
have determined that it has made a Nonrecoverable Advance or that a proposed
Advance or a lesser portion of such Advance would constitute a Nonrecoverable
Advance, the Master Servicer shall deliver (i) to the Trustee for the benefit
of the Certificateholders funds constituting the remaining portion of such
Advance, if applicable, and (ii) to the Depositor, each Rating Agency and the
Trustee an Officer's Certificate setting forth the basis for such
determination.
In lieu of making all or a portion of such Advance from its
own funds, the Master Servicer may (i) cause to be made an appropriate entry
in its records relating to the Certificate Account that any Amount Held for
Future Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required
to be distributed pursuant to this Agreement. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until such Mortgage Loan is paid in full or the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trust Fund pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01.
Section 4.02. Reduction of Servicing Compensation in
Connection with Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Master Servicer shall, to the extent of
one-half of the Servicing Fee for such Distribution Date, deposit into the
Certificate Account, as a reduction of the Servicing Fee (but not in excess of
one-half thereof) for such Distribution Date, no later than the close of
business on the Business Day immediately preceding such Distribution Date, an
amount equal to the Prepayment Interest Shortfall; and in case of such
deposit, the Master Servicer shall not be entitled to any recovery or
reimbursement from the Depositor, the Trustee, the Trust Fund or the
Certificateholders.
Section 4.03. REMIC Distributions.
On each Distribution Date the Trustee shall allocate distributions to
the REMIC 1 Regular Interests, the REMIC 2 Regular Interests, the REMIC 3
Regular Interests, and the REMIC 4 Regular Interests in accordance with
Section 4.06 hereof.
Section 4.04. Distributions.
(a) On each Distribution Date, the Trustee shall make the
following allocations from the Distribution Account of an amount equal to the
Fixed Rate Interest Funds in the following order of priority (unless otherwise
specified):
(i) to each Class of the Fixed Rate Class A Certificates, the
Fixed Rate Class A Current Interest and any Fixed Rate Class A
Interest Carryforward Amount for each such Class of Fixed Rate Class
A Certificates; provided that if the Fixed Rate Interest Funds are
not sufficient to make a full distribution of all Fixed Rate Class A
Current Interest and any Fixed Rate Class A Interest Carryforward
Amount for all Classes of Fixed Rate Class A Certificates, the Fixed
Rate Interest Funds will be distributed pro rata among each Class of
the Fixed Rate Class A Certificates based on the ratio of (x) the
Fixed Rate Class A Current Interest and any Fixed Rate Class A
Interest Carryforward Amount for such Class of the Fixed Rate Class
A Certificates to (y) the total amount of Fixed Rate Class A Current
Interest and any Fixed Rate Class A Interest Carryforward Amount for
all Classes of Fixed Rate Class A Certificates;
(ii) to the Class MF-1 Certificates, the Class MF-1 Current
Interest;
(iii) to the Class MF-2 Certificates, the Class MF-2 Current
Interest;
(iv) to the Class BF Certificates, the Class BF Current
Interest; and
(v) any remainder shall constitute part of the Fixed Rate
Excess Cashflow for such Distribution Date.
(b) On each Distribution Date, the Trustee shall make the
following allocations from the Distribution Account of an amount equal to the
Adjustable Rate Interest Funds in the following order of priority:
(i) to the Class AV-1 Certificates, the Class AV-1 Current
Interest and any Class AV-1 Interest Carryforward Amount for the
Class AV-1 Certificates;
(ii) to the Class MV-1 Certificates, the Class MV-1 Current
Interest;
(iii) to the Class MV-2 Certificates, the Class MV-2 Current
Interest;
(iv) to the Class BV Certificates, the Class BV Current
Interest; and
(v) any remainder shall constitute part of the Adjustable Rate
Excess Cashflow for such Distribution Date.
(c) On each Distribution Date, the Trustee shall make the
following allocation from the Distribution Account of an amount equal to the
Fixed Rate Principal Distribution Amount in the
following order of priority:
(i) to the Fixed Rate Class A Certificates, the Fixed Rate
Class A Principal Distribution Amount to be distributed in the
priority and as provided in Section 4.04(d);
(ii) to the Class MF-1 Certificates, the Class MF-1 Principal
Distribution Amount;
(iii) to the Class MF-2 Certificates, the Class MF-2 Principal
Distribution Amount;
(iv) to the Class BF Certificates, the Class BF Principal
Distribution Amount; and
(v) any remainder shall constitute part of the Fixed Rate
Excess Cashflow for such Distribution Date.
(d) On each Distribution Date, the Fixed Rate Class A
Principal Distribution Amount allocated under Section 4.04(c)(i) to the Fixed
Rate Class A Certificates is required to be further allocated by the Trustee
to the Fixed Rate Class A Certificates in the following priority: first to the
Class AF-6 Certificates, the Class AF-6 Principal Distribution Amount, and
then the remainder sequentially to the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5 and Class AF-6 Certificates, in that order until the
respective Certificate Principal Balances thereof are reduced to zero;
provided that on any Distribution Date on which the Fixed Rate Class A
Certificate Principal Balance is greater than the Stated Principal Balance as
of such Distribution Date of the Fixed Rate Mortgage Loans, the Fixed Rate
Class A Principal Distribution Amount will be distributed pro rata and not
sequentially.
(e) On each Distribution Date, the Trustee shall make the
following allocations from the Distribution Account of an amount equal to the
Adjustable Rate Principal Distribution Amount in
the following order of priority:
(i) to the Class AV-1 Certificates, the Adjustable Rate Class A
Principal Distribution Amount;
(ii) to the Class MV-1 Certificates, the Class MV-1 Principal
Distribution Amount;
(iii) to the Class MV-2 Certificates, the Class MV-2 Principal
Distribution Amount;
(iv) to the Class BV Certificates, the Class BV Principal
Distribution Amount; and
(v) any remainder shall constitute part of the Adjustable Rate
Excess Cashflow for such Distribution Date.
(f) On each Distribution Date, the Trustee shall make the
following allocations from the Distribution Account of, first, the Fixed Rate
Excess Cashflow and, second, of the Adjustable Rate Remainder Excess Cashflow,
in the following order of priority:
(i) for distribution as part of the Fixed Rate Principal
Distribution Amount, the Fixed Rate Extra Principal Distribution
Amount;
(ii) to the Class MF-1 Certificates, the Class MF-1 Interest
Carryforward Amount;
(iii) to the Class MF-1 Certificates, the Class MF-1 Unpaid
Realized Loss Amount;
(iv) to the Class MF-2 Certificates, the Class MF-2 Interest
Carryforward Amount;
(v) to the Class MF-2 Certificates, the Class MF-2 Unpaid
Realized Loss Amount;
(vi) to the Class BF Certificates, the Class BF Interest
Carryforward Amount;
(vii) to the Class BF Certificates, the Class BF Unpaid
Realized Loss Amount; and
(viii) the remainder (except for amounts representing
Adjustable Rate Remainder Excess Cashflow) shall constitute Fixed
Rate Remainder Excess Cashflow and shall be allocated as provided in
Section 4.04(f).
(g) On each Distribution Date, the Trustee shall make the
following allocations from the Distribution Account of, first, the Adjustable
Rate Excess Cashflow and, second, of the Fixed Rate Remainder Excess Cashflow,
in the following order of priority:
(i) for distribution as part of the Adjustable Rate Principal
Distribution Amount, the Adjustable Rate Extra Principal
Distribution Amount;
(ii) to the Class MV-1 Certificates, the Class MV-1 Interest
Carryforward Amount;
(iii) to the Class MV-1 Certificates, the Class MV-1 Unpaid
Realized Loss Amount;
(iv) to the Class MV-2 Certificates, the Class MV-2 Interest
Carryforward Amount;
(v) to the Class MV-2 Certificates, the Class MV-2 Unpaid
Realized Loss Amount;
(vi) to the Class BV Certificates, the Class BV Interest
Carryforward Amount;
(vii) to the Class BV Certificates, the Class BV Unpaid
Realized Loss Amount; and
(viii) the remainder (except for amounts representing Fixed
Rate Remainder Excess Cashflow) shall constitute Adjustable Rate
Remainder Excess Cashflow and shall be allocated as provided in
Section 4.04(g).
(h) On each Distribution Date the Trustee shall make the
following allocations from the Distribution Account of the Fixed Rate
Remainder Excess Cashflow in the following order of priority:
(i) for allocation pursuant to Section 4.04(g);
(ii) to the Fixed Rate Carryover Reserve Fund and then pro rata
to the holders of the Fixed Rate Certificates in an amount equal to
any Fixed Net Rate Carryover for such Class;
(iii) to the Fixed Rate Carryover Reserve Fund, an amount equal
to the Required Fixed Rate Carryover Reserve Fund Deposit;
(iv) to the Class BF-IO Certificates, the Class BF-IO
Distributable Amount; together with any amounts withdrawn from the
Fixed Rate Carryover Reserve Fund for distribution to the Class
BF-IO Certificates pursuant to Section 4.09(c) on such date;
(v) to the Class BF-IO Certificates, the Class BF-IO
Distributable Amount;
(vi) to the Master Servicer, in payment of the Extra Master
Servicing Fee pursuant to Section 4.08 hereof for such Distribution
Date; and
(vii) any remainder to the Class R Certificates.
(i) On each Distribution Date the Trustee shall make the
following allocations from the Distribution Account of the Adjustable Rate
Remainder Excess Cashflow in the following order of priority:
(i) for allocation pursuant to Section 4.04(f);
(ii) to the Adjustable Rate Carryover Reserve Fund and then pro
rata to the holders of the Adjustable Rate Certificates in an amount
equal to any Adjustable Rate Certificate Carryover for such Class;
(iii) to the Adjustable Rate Carryover Reserve Fund, an amount
equal to the Required Adjustable Rate Carryover Reserve Fund
Deposit;
(iv) to the Class BV-IO Certificates, the Class BV-IO
Distributable Amount; together with any amounts withdrawn from the
Adjustable Rate Carryover Reserve Fund for distribution to the Class
BV-IO Certificates pursuant to Section 4.08(c) and (d) on such date;
(v) to the Master Servicer, in payment of the Extra Master
Servicing Fee for such Distribution Date pursuant to Section 4.07
hereof; and
(vi) any remainder to the Class R Certificates.
(j) To the extent that a Class of Fixed Rate Certificates
receives interest in excess of the Fixed Net Rate Cap, such interest shall be
treated as having been paid to the Fixed Rate Carryover Reserve Fund and then
paid by the Fixed Rate Carryover Reserve Fund to such Certificateholders.
Amounts deposited to the Fixed Rate Carryover Reserve Fund pursuant to this
clause and the preceding clauses (h)(ii) and (iii) shall be deemed to have
been distributed first to the Class BF-IO Certificateholders for applicable
tax purposes.
(k) To the extent that a Class of Adjustable Rate
Certificates receives interest in excess of the Weighted Maximum Rate Cap,
such interest shall be treated as having been paid to the Adjustable Rate
Carryover Reserve Fund and then paid by the Adjustable Rate Carryover Reserve
Fund to such Certificateholders. Amounts deposited to the Adjustable Rate
Carryover Reserve Fund pursuant to this clause and the preceding clauses
(i)(ii) and (iii) shall be deemed to have been distributed first to the Class
BV-IO Certificateholders for applicable tax purposes.
(l) On each Distribution Date, the Trustee shall allocate
the Applied Realized Loss Amount for the Fixed Rate Certificates to reduce the
Certificate Principal Balances of the Fixed Rate Subordinated Certificates in
the following order of priority:
(i) to the Class BF Certificates until the Class BF Certificate
Principal Balance is reduced to zero;
(ii) to the Class MF-2 Certificates until the Class MF-2
Certificate Principal Balance is reduced to zero; and
(iii) to the Class MF-1 Certificates until the Class MF-1
Certificate Principal Balance is reduced to zero.
(m) On each Distribution Date, the Trustee shall allocate
the Applied Realized Loss Amount for the Adjustable Rate Certificates to
reduce the Certificate Principal Balances of the Adjustable Rate Subordinated
Certificates in the following order of priority:
(i) to the Class BV Certificates until the Class BV Certificate
Principal Balance is reduced to zero;
(ii) to the Class MV-2 Certificates until the Class MV-2
Certificate Principal Balance is reduced to zero; and
(iii) to the Class MV-1 Certificates until the Class MV-1
Certificate Principal Balance is reduced to zero.
(n) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either by
wire transfer in immediately available funds to the account of such holder at
a bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least 5 Business Days prior to the
related Record Date and (ii) such Holder shall hold Regular Certificates with
aggregate principal denominations of not less than $1,000,000 or evidencing a
Percentage Interest aggregating 10% or more with respect to such Class or, if
not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the
name of a Depository shall be made to such Depository in immediately available
funds.
On or before 5:00 p.m. Pacific time on the fifth Business
Day following each Determination Date (but in no event later than 5:00 p.m.
Pacific time on the third Business Day before the related Distribution Date),
the Master Servicer shall deliver a report to the Trustee in the form of a
computer readable magnetic tape (or by such other means as the Master Servicer
and the Trustee may agree from time to time) containing such data and
information as agreed to by the Master Servicer and the Trustee such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and
make the required distributions for the related Distribution Date (the
"Remittance Report"). The Trustee shall, not later than 9:00 a.m. Pacific time
on the Master Servicer Advance Date, other than any Master Servicer Advance
Date relating to any Distribution Date on which the proceeds of any Optional
Termination are being distributed, (i) furnish by telecopy a statement to the
Master Servicer (the information in such statement to be made available to
Certificateholders by the Trustee on request) setting forth the Fixed Rate
Interest Funds, Fixed Rate Principal Funds, Adjustable Rate Interest Funds and
Adjustable Rate Principal Funds for such Distribution Date and the amount to
be withdrawn from the Certificate Account and (ii) determine (and notify the
Master Servicer by telecopy of the results of such determination) the amount
of Advances to be made by the Master Servicer in respect of the related
Distribution Date; provided that no Advance shall be made if it would be a
Nonrecoverable Advance; provided further that any failure by the Trustee to
notify the Master Servicer will not relieve the Master Servicer from any
obligation to make any such Advances. The Trustee shall not be responsible to
recompute, recalculate or verify information provided to it by the Master
Servicer and shall be permitted to conclusively rely on any information
provided to it by the Master Servicer.
Section 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Holder of a
Class of Certificates of the Trust Fund, the Master Servicer 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, (B)
the aggregate of all scheduled payments of principal included
therein and (C) the Fixed Rate Extra Principal Distribution Amount
(if any) and the Adjustable Rate Extra Principal Distribution Amount
(if any);
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
(iii) the Class 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;
(iv) the aggregate of the Stated Principal Balance of the
Mortgage Loans for each Loan Group for the following Distribution
Date;
(v) the related amount of the Servicing Fees paid to or
retained by the Master Servicer;
(vi) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period;
(vii) any Interest Carryforward Amount for each such Class;
(viii) the Fixed Net Rate and the Adjustable Net Rate;
(ix) the amount of Advances for each Certificate Group included
in the distribution on such Distribution Date;
(x) the cumulative amount of Applied Realized Loss Amounts for
each Certificate Group to date;
(xi) the number and aggregate principal amounts of Mortgage
Loans in each Loan Group (A) delinquent (exclusive of Mortgage Loans
in foreclosure) (1) 30 days, (2) 31 to 60 days, (3) 61 to 90 days
and (4) 91 or more days, and (B) in foreclosure and delinquent (1)
30 days, (2) 31 to 60 days, (3) 61 to 90 days and (4) 91 or more
days, in each case as of the close of business on the last day of
the calendar month preceding such Distribution Date;
(xii) 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 as of
the close of business on the Determination Date preceding such
Distribution Date and the date of acquisition thereof;
(xiii) the total number and principal balance of any REO
Properties in each Loan Group as of the close of business on the
Determination Date preceding such Distribution Date;
(xiv) the Stated Principal Balance of all Liquidated Loans in
each Loan Group;
(xv) with respect to any Liquidated Loan in each Loan Group,
the loan number and Stated Principal Balance relating thereto;
(xvi) with respect to each Loan Group, whether a Trigger Event
has occurred;
(xvii) any Fixed Net Rate Carryover paid and any remaining
Fixed Net Rate Carryover remaining on the Fixed Rate Certificates on
such Distribution Date;
(xviii) any Adjustable Rate Certificate Carryover paid and any
remaining Adjustable Rate Certificate Carryover remaining on each
Class of Adjustable Rate Certificates on such Distribution Date; and
(xix) with respect to the second Distribution Date, the number
and aggregate balance of any Delay Delivery Mortgage Loans not
delivered within thirty (30) days after the Closing Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer.
The Trustee will send a copy of each statement provided pursuant to this
Section 4.05 to each Rating Agency.
(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 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 R Certificates with
respect to the following matters:
(i) The original projected principal and interest cash flows on
the Closing Date on each 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 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 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 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
REMIC; and
(vii) Any taxes (including penalties and interest) imposed on
the REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and
(iv) above shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06. REMIC 1, REMIC 2, REMIC 3, and REMIC 4
Allocations.
(a) The initial principal balances of the Class T1-F1, Class
T1-F2, and Class T1-F3 Interests shall equal 98%, 1%, and 1%, respectively, of
the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date. On each Distribution Date, 98% of all Fixed Rate Principal Funds
for the related Due Period shall be allocated to the Class T1-F1 Interest.
Remaining amounts of Fixed Rate Principal Funds for the related Due Period
shall be allocated first to the Class T1-F3 Interest up to an amount equal to
2% of any amount that represents a Fixed Rate Adjusted Overcollateralization
Release Amount with respect to such Distribution Date and then equally between
the Class T1-F2 and Class T1-F3 Interests. Interest accruing on the Class
T1-F3 Interest in respect of each Distribution Date in an amount equal to 1%
of the increase in the Fixed Rate Adjusted Overcollateralization Amount from
the immediately preceding Distribution Date shall be deferred and added to the
principal balance of the Class T1-F3 Interest. The amount of interest accrued
and deferred on the Class T1-F3 Interest in accordance with the preceding
sentence in respect of each Distribution Date shall be distributed as
principal on such date to the Class T1-F2 Interest.
(b) On each Distribution Date, Realized Losses with respect
to the Fixed Rate Mortgage Loans for such date shall be allocated 98% to the
Class T1-F1 Interest. The remaining 2% of such Realized Losses shall be
allocated to the Class T1-F3 Interest to the extent that the principal balance
of the Class T1-F3 Interest exceeds 1% of the aggregate of the Stated
Principal Balance of the Fixed Rate Mortgage Loans as of such date and then
equally between the Class T1-F2 and Class T1-F3 Interests.
(c) The initial principal balances of the Class T1-V1, Class
T1-V2, and Class T1-V3 Interests shall equal 98%, 1%, and 1%, respectively, of
the Stated Principal Balance of the Adjustable Rate Mortgage Loans as of the
Cut-off Date. On each Distribution Date, 98% of all Adjustable Rate Principal
Funds for the related Due Period shall be allocated to the Class T1-V1
Interest. Remaining amounts of Adjustable Rate Principal Funds for the related
Due Period shall be allocated first to the Class T1-V3 Interest up to an
amount equal to 2% of any amount that represents an Adjustable Rate Adjusted
Overcollateralization Release Amount with respect to such Distribution Date
and then equally between the Class T1-V2 and Class T1-V3 Interests. Interest
accruing on the Class T1-V3 Interest in respect of each Distribution Date in
an amount equal to 1% of the increase in the Adjustable Rate Adjusted
Overcollateralization Amount from the immediately preceding Distribution Date
shall be deferred and added to the principal balance of the Class T1-V3
Interest. The amount of interest accrued and deferred on the Class T1-V3
Interest in accordance with the preceding sentence in respect of each
Distribution Date shall be distributed as principal on such date to the Class
T1-V2 Interest.
(d) On each Distribution Date, Realized Losses with respect
to the Adjustable Rate Mortgage Loans for such date shall be allocated 98% to
the Class T1-V1 Interest. The remaining 2% of such Realized Losses shall be
allocated to the Class T1-V3 Interest to the extent that the principal balance
of the Class T1-V3 Interest exceeds 1% of the aggregate of the Stated
Principal Balance of the Adjustable Rate Mortgage Loans as of such date and
then equally between the Class T1-V2 and Class T1-V3 Interests.
(e) The initial principal balances of the Class T2-F1, Class
T2-F2, and Class T2-F3 Interests shall equal 98%, 1%, and 1%, respectively, of
the Stated Principal Balance of the Fixed Rate Mortgage Loans as of the
Cut-off Date. The Class T2-F4 Interest shall not have a principal balance. On
each Distribution Date, 98% of all Fixed Rate Principal Funds for the related
Due Period shall be allocated to the Class T2-F1 Interest. Remaining amounts
of Fixed Rate Principal Funds for the related Due Period shall be allocated
first to the Class T2-F3 Interest up to an amount equal to 2% of any amount
that represents a Fixed Rate Adjusted Overcollateralization Release Amount
with respect to such Distribution Date and then equally between the Class
T2-F2 and Class T2-F3 Interests. Interest accruing on the Class T2-F3 Interest
in respect of each Distribution Date in an amount equal to 1% of the increase
in the Fixed Rate Adjusted Overcollateralization Amount from the immediately
preceding Distribution Date shall be deferred and added to the principal
balance of the Class T2-F3 Interest. The amount of interest accrued and
deferred on the Class T2-F3 Interest in accordance with the preceding sentence
in respect of each Distribution Date shall be distributed as principal on such
date to the Class T2-F2 Interest.
(f) On each Distribution Date, Realized Losses with respect
to the Fixed Rate Mortgage Loans for such date shall be allocated 98% to the
Class T2-F1 Interest. The remaining 2% of such Realized Losses shall be
allocated to the Class T2-F3 Interest to the extent that the principal balance
of the Class T2-F3 Interest exceeds 1% of the aggregate of the Stated
Principal Balance of the Fixed Rate Mortgage Loans as of such date and then
equally between the Class T2-F2 and Class T2-F3 Interests.
(g) The initial principal balances of the Class T2-V1, Class
T2-V2, and Class T2-V3 Interests shall equal 98%, 1%, and 1%, respectively, of
the Stated Principal Balance of the Adjustable Rate Mortgage Loans as of the
Cut-off Date. The Class T2-V4 Interest shall not have a principal balance. On
each Distribution Date, 98% of all Adjustable Rate Principal Funds for the
related Due Period shall be allocated to the Class T2-V1 Interest. Remaining
amounts of Adjustable Rate Principal Funds for the related Due Period shall be
allocated first to the Class T2-V3 Interest up to an amount equal to 2% of any
amount that represents an Adjustable Rate Adjusted Overcollateralization
Release Amount with respect to such Distribution Date and then equally between
the Class T2-V2 and Class T2-V3 Interests. Interest accruing on the Class
T2-V3 Interest in respect of each Distribution Date in an amount equal to 1%
of the increase in the Adjustable Rate Adjusted Overcollateralization Amount
from the immediately preceding Distribution Date shall be deferred and added
to the principal balance of the Class T2-V3 Interest. The amount of interest
accrued and deferred on the Class T2-V3 Interest in accordance with the
preceding sentence in respect of each Distribution Date shall be distributed
as principal on such date to the Class T2-V2 Interest.
(h) On each Distribution Date, Realized Losses with respect
to the Adjustable Rate Mortgage Loans for such date shall be allocated 98% to
the Class T2-V1 Interest. The remaining 2% of such Realized Losses shall be
allocated to the Class T2-V3 Interest to the extent that the principal balance
of the Class T2-V3 Interest exceeds 1% of the aggregate of the Stated
Principal Balance of the Adjustable Rate Mortgage Loans as of such date and
then equally between the Class T2-V2 and Class T2-V3 Interests.
(i) On each Distribution Date, the Class T3-F1, Class T3-F2,
Class T3-F3, Class T3-F4, Class T3-F5, Class T3-F6, Class T3-F7, Class T3-F8,
Class T3-F9, Class T3-V1, Class T3-V2, Class T3-V3 and Class T3-V4 Interests
shall be entitled to receive principal distributions that correspond to the
principal distributions on the corresponding class of Interests in REMIC 4
(the Class T4-F1, Class T4-F2, Class T4-F3, Class T4-F4, Class T4-F5, Class
T4-F6, Class T4-F7, Class T4-F8, Class T4-F9, Class T4-V1, Class T4-V2, Class
T4-V3, and Class T4-V4 Interests, respectively).
(j) On each Distribution Date, interest that accrues with
respect to the Class T3-F10, Class T3-F11 and Class T3-F12 Interests shall be
distributed as principal on the Class T3-F1, Class T3-F2, Class T3-F3, Class
T3-F4, Class T3-F5, Class T3-F6, Class T3-F7, Class T3-F8 and Class T3-F9
Interests to achieve the Fixed Rate Specified Overcollateralization Amount for
such Distribution Date, and to the extent not needed for this purpose, shall
be distributed as principal on the Class T3-V1, Class T3-V2, Class T3-V3, and
Class T3-V4 Interests to achieve the Fixed Rate Specified
Overcollateralization Amount for such Distribution Date, and to the extent not
needed for either purpose, shall be distributed with respect to the Class
T3-F10, Class T3-F11 and Class T3-F12 Interests in proportion to their
entitlements to current and accrued undistributed interest. On each
Distribution Date, interest that accrues with respect to the Class T3-V5,
Class T3-V6, and Class T3-V7 Interests shall be distributed as principal on
the Class T3-V1, Class T3-V2, Class T3-V3, and Class T3-V4 Interests to
achieve the Adjustable Rate Specified Overcollateralization Amount for such
Distribution Date, and to the extent not needed for this purpose, shall be
distributed as principal on the Class T3-F1, Class T3-F2, Class T3-F3, Class
T3-F4, Class T3-F5, Class T3-F6, Class T3-F7, Class T3-F8, and Class T3-F9
Interests to achieve the Adjustable Rate Specified Overcollaterization Amount
for such Distribution Date, and to the extent not needed for either purpose,
shall be distributed with respect to the Class T3-V5, Class T3-V6, and Class
T3-V7 Interests in proportion to their entitlements to current and accrued
undistributed interest. Interest that accrues on the Class T3-F10, Class
T3-F11, Class T3-F12, Class T3-V5, Class T3-V6, and Class T3-V7 Interests
shall not itself bear interest.
Notwithstanding any provision herein, on any Distribution
Date, (1) in no event shall the interest that accrues with respect to the
Class T3-V5, Class T3-V6, and Class T3-V7 Interests that is distributed as
principal on the Class T3-F1, Class T3-F2, Class T3-F3, Class T3-F4, Class
T3-F5, Class T3-F6, Class T3-F7, Class T3-F8, and Class T3-F9 Interests to
achieve the Fixed Rate Specified Overcollateralization Amount for such
Distribution Date exceed an amount equal to the difference between (a) the
product of (i) the aggregate of the principal balances of the Fixed Rate
Mortgage Loans and (ii) the related Fixed Rate Net Rate and (b) the amount of
interest accruing on the Class T3-F10, Class T3-F11, and Class T3-F12
Interests for such Distribution Date and (2) in no event shall the interest
that accrues with respect to the Class T3-F10, Class T3-F11, and Class T3-F12
Interests that is distributed as principal on the Class T3-V1, Class T3-V2,
Class T3-V3 and Class T3-V4 Interests to achieve the Adjustable Rate Specified
Overcollateralization Amount for such Distribution Date exceed an amount equal
to the difference between (a) the product of (i) the aggregate of the
principal balances of the Adjustable Rate Mortgage Loans and (ii) the related
Adjustable Net Rate and (b) the amount of interest accruing on the Class
T3-V5, Class T3-V6 and Class T3-V7 Interests for such Distribution Date.
(k) On each Distribution Date, Realized Losses with respect
to the Fixed Rate Mortgage Loans shall be allocated as follows:
first, to the Class T3-F1 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F1 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
second, to the Class T3-F2 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F2 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
third, to the Class T3-F3 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F3 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
fourth, to the Class T3-F4 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F4 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
fifth, to the Class T3-F5 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F5 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
sixth, to the Class T3-F6 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F6 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
seventh, to the Class T3-F7 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F7 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
eighth, to the Class T3-F8 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F8 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
ninth, to the Class T3-F9 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-F9 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
tenth, proportionately to the accrued interest balances of
the Class T3-F10, Class T3-F11, Class T3-F12 Interests; and
eleventh, in a manner that will cause any amount due on each
REMIC 3 Regular Interest to equal the amount due on the
corresponding Class of REMIC 4 Regular Interests.
(l) On each Distribution Date, Realized Losses with respect
to the Adjustable Rate Mortgage Loans shall be allocated as follows:
first, to the Class T3-V1 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-V1 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
second, to the Class T3-V2 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-V2 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
third, to the Class T3-V3 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-V3 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
fourth, to the Class T3-V4 Interest to the extent that its
principal balance exceeds the principal balance of the Class
T4-V4 Interest on such Distribution Date (after giving
effect to any distributions made on such date);
fifth, proportionately to the accrued interest balances of
the Class T3-V5, Class T3-V6, Class T3-V7 Interests; and
sixth, in a manner that will cause any amount due on each
REMIC 3 Regular Interests to equal the amount due on the
corresponding Class of REMIC 4 Regular Interests. (m) On
each Distribution Date, the Class T4-F1, Class T4-F2, Class
T4-F3, Class T4-F4, Class T4-F5, Class T4-F6, Class T4-F7,
Class T4-F8, Class T4-F9, Class T4-V1, Class T4-V2, Class
T4-V3, and Class T4-V4 Interests shall be entitled to
receive distributions of principal and interest equal to the
principal and interest distributions required to be paid
with respect to the corresponding Class of Certificates
(determined as if the distributions on the Certificates were
computed without regard to the amounts distributed under
Section 4.04(i) hereof from the Carryover Reserve Fund). On
each Distribution Date, interest that accrues with respect
to the Class T4-F10, Class T4-F11, Class T4-F12, Class
T4-F13, Class T4-F14, Class T4-F15, Class T4-F16, Class
T4-F17 and Class T4-F18, during the related Accrual Period
shall be distributed as Fixed Rate Excess Cashflow and Fixed
Rate Remainder Excess Cashflow in accordance with Section
4.04 (f), (g) and (h), and interest that accrues with
respect to the Class T4-V5, Class T4-V6, Class T4-V7, and
Class T4-V8 Interests during the related Accrual Period
shall be distributed as Adjustable Rate Excess Cashflow and
as Adjustable Rate Remainder Excess Cashflow in accordance
with Section 4.04(f), (g) and (i) hereof. Interest that
accrues on the Class T4-F10, Class T4-F11, Class T4-F12,
Class T4-F13, Class T4-F14, Class T4-F15, Class T4-F16,
Class T4-F17, Class T4-F18, Class T4-V5, Class T4-V6, Class
T4-V7, and Class T4-V8 Interests shall not itself bear
interest.
(n) On each Distribution Date, the Applied Realized Loss
Amount for the Fixed Rate Certificates and the Applied Realized Loss Amount
for the Adjustable Rate Certificates shall be allocated among the REMIC 4
Regular Interests in accordance with the allocations provided in Section 4.04
(k) and (l) hereof for the corresponding classes of Certificates.
Section 4.07. Extra Master Servicing Fee.
(a) REMIC 4 shall pay to the Master Servicer the Extra
Master Servicing Fee as an additional fee for services rendered as Master
Servicer. Such fee shall be due and payable on any Distribution Date only to
the extent their are amounts remaining after all amounts required to be
distributed with respect to the REMIC 4 Regular Interests have been made for
that Distribution Date. Furthermore, if for any Distribution Date an amount
would be required to be paid from the Carryover Reserve Fund pursuant to
Section 4.04(j), the Master Servicer shall make an advance to the Carryover
Reserve Fund in the amount of any Extra Master Servicing Fee due for that
Distribution Date.
(b) With respect to each Distribution Date, the Extra Master
Servicing Fee shall equal the sum of the following:
(i) an amount equal to the product of the Class AF-1
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F1 Interest principal balance over the Class T4-F1 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(ii) an amount equal to the product of the Class AF-2
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F2 Interest principal balance over the Class T4-F2 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(iii) an amount equal to the product of the Class AF-3
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F3 Interest principal balance over the Class T4-F3 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(iv) an amount equal to the product of the Class AF-4
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F4 Interest principal balance over the Class T4-F4 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(v) an amount equal to the product of the Class AF-5
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F5 Interest principal balance over the Class T4-F5 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(vi) an amount equal to the product of the Class AF-6
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F6 Interest principal balance over the Class T4-F6 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(vii) an amount equal to the product of the Class MF-1
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F7 Interest principal balance over the Class T4-F7 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(viii) an amount equal to the product of the Class MF-2
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-F8 Interest principal balance over the Class T4-F8 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date);
(ix) an amount equal to the product of the Class AV-1 Pass-Through
Rate for such Distribution Date and the excess of the Class T3-V1
Interest principal balance over the Class T4-V1 Interest principal
balance (before giving effect to any reductions of such balances on
such Distribution Date);
(x) an amount equal to the product of the Class MV-1
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-V2 Interest principal balance over the Class T4-V2 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date); and
(xi) an amount equal to the product of the Class MV-2
Pass-Through Rate for such Distribution Date and the excess of the
Class T3-V3 Interest principal balance over the Class T4-V3 Interest
principal balance (before giving effect to any reductions of such
balances on such Distribution Date).
All amounts received by the Servicer in respect of the Extra Master Servicing
Fee will be deposited into the Carryover Reserve Fund.
Section 4.08. Fixed Rate 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 Fixed
Rate Certificates, the Fixed Rate Carryover Reserve Fund. The Fixed Rate
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) On each Distribution Date on which the Net Excess Spread
is less than 0.25%, the Trustee shall transfer from the Distribution Account
to the Fixed Rate Carryover Reserve Fund pursuant to Sections 4.04(h)(ii) the
Required Fixed Rate Carryover Reserve Fund Deposit.
(c) The Trustee shall make withdrawals from the Fixed Rate
Carryover Reserve Fund to make distributions pursuant to Section 4.04(h)
hereof, and shall withdraw from the Fixed Rate Carryover Reserve Fund on any
Distribution Date on which the Net Excess Spread is equal to or greater than
0.25% an amount equal to the amount of funds on deposit in the Fixed Rate
Carryover Reserve Fund in excess of $5,000 and distribute such excess to the
Class BF-IO Certificateholders pro rata in accordance with their respective
Percentage Interests. Funds withdrawn from the Fixed Rate Carryover Reserve
Fund may not be applied pursuant to any other subsection of Section 4.04 other
than as expressly provided for in this Section 4.08(c).
(d) Funds in the Fixed Rate Carryover Reserve Fund may be
invested in Permitted Investments. Any earnings on such amounts shall be
payable to the Class BF-IO Certificates. The Class BF-IO Certificates shall
evidence ownership of the Fixed Rate Carryover Reserve Fund for federal tax
purposes and shall direct the Trustee in writing as to the investment of
amounts therein.
(e) Upon termination of the Trust Fund, any amounts
remaining in the Fixed Rate Carryover Reserve Fund shall be distributed to the
Holders of the Class BF-IO Certificates in the same manner as if distributed
pursuant to Section 4.04(h) hereof.
Section 4.09. Adjustable Rate 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
Adjustable Rate Certificates, the Adjustable Rate Carryover Reserve Fund. The
Adjustable Rate 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) On each Distribution Date on which the Net Excess Spread
is less than 0.25%, the Trustee shall transfer from the Distribution Account
to the Adjustable Rate Carryover Reserve Fund pursuant to Sections 4.04(i)(ii)
the Required Adjustable Rate Carryover Reserve Fund Deposit.
(c) The Trustee shall make withdrawals from the Adjustable
Rate Carryover Reserve Fund to make distributions pursuant to Section 4.04(i)
hereof, and shall withdraw from the Adjustable Rate Carryover Reserve Fund on
any Distribution Date on which the Net Excess Spread is equal to or greater
than 0.25% an amount equal to the amount of funds on deposit in the Adjustable
Rate Carryover Reserve Fund in excess of $5,000 and distribute such excess to
the Class BV-IO Certificateholders pro rata in accordance with their
respective Percentage Interests. Funds withdrawn from the Adjustable Rate
Carryover Reserve Fund may not be applied pursuant to any other subsection of
Section 4.04 other than as expressly provided for in this Section 4.08(c).
(d) Funds in the Adjustable Rate Carryover Reserve Fund may
be invested in Permitted Investments. Any earnings on such amounts shall be
payable to the Class BV-IO Certificates. The Class BV-IO Certificates shall
evidence ownership of the Adjustable Rate Carryover Reserve Fund for federal
tax purposes and shall direct the Trustee in writing as to the investment of
amounts therein.
(e) Upon termination of the Trust Fund, any amounts
remaining in the Adjustable Rate Carryover Reserve Fund shall be distributed
to the Holders of the Class BV-IO Certificates in the same manner as if
distributed pursuant to Section 4.04(i) hereof.
ARTICLE V.
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates shall be substantially in the forms
attached hereto as exhibits. The Certificates shall be issuable in registered
form, in the minimum dollar denominations, integral dollar multiples in excess
thereof (except that one Certificate in of each Class may be issued in a
different amount which must be in excess of the applicable minimum dollar
denomination) and aggregate dollar denominations as set forth in the following
table:
Integral Original
Multiples Certificate
Minimum in Excess of Principal
Class Denomination Minimum Balance
------- -------------- ------------ -----------
AF-1 $25,000 $1,000 $43,798,000
AF-2 $25,000 $1,000 $30,822,000
AF-3 $25,000 $1,000 $19,666,000
AF-4 $25,000 $1,000 $22,736,000
AF-5 $25,000 $1,000 $11,628,000
AF-6 $25,000 $1,000 $15,500,000
MF-1 $25,000 $1,000 $5,037,000
MF-2 $25,000 $1,000 $2,713,000
BF $25,000 $1,000 $3,100,000
BF-IO N/A N/A N/A
AV-1 $25,000 $1,000 $277,200,000
MV-1 $25,000 $1,000 $14,962,000
MV-2 $25,000 $1,000 $11,025,000
BV $25,000 $1,000 $11,813,000
BV-IO N/A N/A N/A
R-1 0.001% N/A N/A
R-2 99.999% N/A N/A
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the
time when such signatures were affixed, authorized to sign on behalf of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
authentication and delivery. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form set
forth as attached hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication. On the Closing Date, the Trustee shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
Section 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration
of Transfer of any 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 Class B-IO or Class R 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 laws, in order to assure
compliance with the Securities Act and such 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 (x) deliver a letter in substantially the form
of either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A
Letter") or (y) there shall be delivered to the Trustee an opinion of counsel
that such Transfer may be made pursuant to an exemption from the Securities
Act, which opinion of counsel shall not be an expense of the Depositor, the
Seller, the Master Servicer or the Trustee. The Depositor shall provide to any
Holder of a Class B-IO or Class R 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
Class B-IO or Class R 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 shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, or a Person acting on behalf of any such plan or
using the assets of any such plan, (ii) except in the case of the Class B-IO
Certificates and Class R Certificates, if such purchaser is an insurance
company, a representation that the purchaser is an insurance company that is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE
95-60, or (iii) in the case of any such ERISA Restricted Certificate presented
for registration in the name of an employee benefit plan subject to ERISA, or
a plan subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an opinion of counsel satisfactory to the
Trustee and the Master Servicer to the effect that the purchase or holding of
such ERISA Restricted Certificate will not result in the assets of the Trust
Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee
or the Master Servicer to any obligation in addition to those expressly
undertaken in this Agreement, which opinion of counsel shall not be an expense
of the Trustee or the Master Servicer. For purposes of clause (i) of the
preceding sentence, such representation shall be deemed to have been made to
the Trustee by the transferee's acceptance of an ERISA Restricted Certificate
(or the acceptance by a Certificate Owner of the beneficial interest in any
such Class of ERISA Restricted Certificates) unless the Trustee shall have
received from the transferee an alternative representation acceptable in form
and substance to the Master Servicer and the Depositor. Notwithstanding
anything else to the contrary herein, any purported transfer of an ERISA
Restricted Certificate to or on behalf of an employee benefit plan subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code without the
delivery to the Trustee and the Master Servicer of an opinion of counsel
satisfactory to the Trustee and the Master Servicer as described above shall
be void and of no effect; provided that the restriction set forth in this
sentence shall not be applicable if there has been delivered to the Trustee
and the Master Servicer an opinion of counsel meeting the requirements of
clause (iii) of the first sentence of this paragraph. The Trustee shall be
under no liability to any Person for any registration of transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 5.02(b)
or for making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under the provisions of
this Agreement so long as the transfer was registered by the Trustee in
accordance with the foregoing requirements. The Trustee shall be entitled, but
not obligated, to recover from any Holder of any ERISA Restricted Certificate
that was in fact an employee benefit plan subject to Section 406 of ERISA or a
plan subject to Section 4975 of the Code or a Person acting on behalf of any
such plan at the time it became a Holder or, at such subsequent time as it
became such a plan or Person acting on behalf of such a plan, all payments
made on such ERISA Restricted Certificate at and after either such time. Any
such payments so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Holder of such Certificate that is not such a
plan or Person acting on behalf of a plan.
(c) Each Person who has or who acquires any Ownership
Interest in a Class 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 R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class 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 R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to
the Trustee under subparagraph (b) above, the Trustee shall have
been furnished with an affidavit (a "Transfer Affidavit") of the
initial owner or the proposed transferee in the form attached hereto
as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class 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 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 R Certificate and (C) not to Transfer its Ownership
Interest in a Class R Certificate or to cause the Transfer of an
Ownership Interest in a Class 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 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 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 R Certificate. The Trustee shall be under no liability
to any Person for any registration of Transfer of a Class 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 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 R Certificate
at and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section
860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Class R Certificate to any Holder who is not a
Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable
portions of the legend on a Class R Certificate may be deleted) with respect
to Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Seller or
the Master Servicer to the effect that the elimination of such restrictions
will not cause the Trust Fund to fail to qualify as a REMIC at any time that
the Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any ownership Interest in a Class 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 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 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 certificates and
opinions referred to above in this Section 5.02 shall not be an expense of the
Trust Fund, the Trustee, the Depositor, the Seller or the Master Servicer.
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Master Servicer and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Trustee that such Certificate has been acquired
by a bona fide purchaser, the Trustee shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest.
In connection with the issuance of any new Certificate under this Section
5.03, the Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates surrendered to the
Trustee under the terms of this Section 5.03 shall be canceled and destroyed
by the Trustee in accordance with its standard procedures without liability on
its part.
Section 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the
contrary.
Section 5.05. Access to List of Certificateholders' Names
and Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and
(c) provide a copy of the communication that such Certificateholders propose
to transmit or if the Depositor or Master Servicer shall request such
information in writing from the Trustee, then the Trustee shall, within ten
Business Days after the receipt of such request, provide the Depositor, the
Master Servicer or such Certificateholders at such recipients' expense the
most recent list of the Certificateholders of the Trust Fund held by the
Trustee, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06. Book-Entry Certificates.
The Regular Certificates (other than the Class B-IO
Certificates), upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to the Depository by or on behalf of the Depositor. Such
Certificates shall initially be registered on the Certificate Register in the
name of the Depository or its nominee, and no Certificate Owner of such
Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in
Section 5.08. Unless and until definitive, fully registered Certificates
("Definitive Certificates") have been issued to the Certificate Owners of such
Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force
and effect;
(b) the Depositor, the 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.
If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an
Event of Default, Certificate Owners of such Book-Entry Certificates having
not less than 51% of the Voting Rights evidenced by any Class of Book-Entry
Certificates advise the Trustee and the Depository in writing through the
Depository Participants that the continuation of a book-entry system with
respect to Certificates of such Class through the Depository (or its
successor) is no longer in the best interests of the Certificate Owners of
such Class, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Depository, of the occurrence of any such event and
of the availability of Definitive Certificates to Certificate Owners of such
Class requesting the same. The Depositor shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon surrender to the Trustee of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall authenticate and deliver
such Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and each may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of such Definitive Certificates, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 5.09. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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.
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01. Respective Liabilities of the Depositor, the
Master Servicer and the Seller.
The Depositor, the Master Servicer and the Seller shall each
be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
Section 6.02. Merger or Consolidation of the Depositor, the
Master Servicer or the Seller.
The Depositor, the Master Servicer and the Seller will each
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 respective 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 sell mortgage loans to, and to service mortgage loans on
behalf of, FNMA or FHLMC.
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 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 FNMA or FHLMC for
persons performing servicing for mortgage loans purchased by FNMA or FHLMC. 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.
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of
the following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the
Trustee any payment (excluding a payment required to be made under
Section 4.01 hereof) required to be made under the terms of this
Agreement, which failure shall continue unremedied for five calendar
days and, with respect to a payment required to be made under
Section 4.01 hereof, for one calendar day, after the date on which
written notice of such failure shall have been given to the Master
Servicer by the Trustee or the Depositor, or to the Trustee and the
Master Servicer by the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer or, so long as the
Master Servicer is also the Seller, the Seller to observe or perform
in any material respect any other of the covenants or agreements on
the part of the Master Servicer contained in this Agreement or any
representation or warranty shall prove to be untrue, which failure
or breach shall continue unremedied for a period of 60 days after
the date on which written notice of such failure shall have been
given to the Master Servicer by the Trustee or the Depositor, or to
the Trustee by the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates; provided
that the sixty-day cure period shall not apply to the initial
delivery of the Mortgage File for Delay Delivery Mortgage Loans nor
the failure to repurchase or substitute in lieu thereof; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations.
If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been
remedied, the Trustee shall, but only at the direction of the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates, by notice in writing to the Master Servicer (with a copy to
each Rating Agency), terminate all of the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to
the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee.
The Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such
termination shall affect any obligation of the Master Servicer to pay amounts
owed pursuant to Article VIII. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be
credited to the Certificate Account, or thereafter be received with respect to
the Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of
the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a
Master Servicer hereunder, such Master Servicer shall be entitled to receive,
out of any late collection of a Scheduled Payment on a Mortgage Loan that was
due prior to the notice terminating such Master Servicer's rights and
obligations as Master Servicer hereunder and received after such notice, that
portion thereof to which such Master Servicer would have been entitled
pursuant to Sections 3.08(a)(i) through (viii), and any other amounts payable
to such Master Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice
of termination pursuant to Section 7.01 hereof, the Trustee shall, to the
extent provided in Section 3.04, be the successor to the Master Servicer in
its capacity as servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof and applicable law including the obligation to
make advances pursuant to Section 4.01. As compensation therefor, the Trustee
shall be entitled to all fees, costs and expenses relating to the Mortgage
Loans that the Master Servicer would have been entitled to if the Master
Servicer had continued to act hereunder. Notwithstanding the foregoing, if the
Trustee has become the successor to the Master Servicer in accordance with
Section 7.01 hereof, the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making Advances pursuant to
Section 4.01 hereof or if it is otherwise unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the 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 FNMA and FHLMC 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.
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.
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. If any such
instrument is found not to conform to the requirements of this Agreement in a
material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure
to perform its obligations in compliance with this Agreement, or any liability
that would be imposed by reason of its willful misfeasance or bad faith;
provided that:
(i) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable, individually or as Trustee, except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee and the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement that it reasonably believed in good faith to be genuine
and to have been duly executed by the proper authorities respecting
any matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless
the Trustee was grossly negligent or acted in bad faith or with
willful misfeasance; and
(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of
Holders of each Class of Certificates evidencing not less than 25%
of the Voting Rights of such Class relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee
under this Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default that may have
occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested
in writing so to do by Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any
of its duties hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall
have received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute,
conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any
of the Certificates, enforceable by the Trustee, may be enforced by the
Trustee without the possession of any of the Certificates, or the production
thereof at the trial or other proceeding relating thereto, and any such suit,
action or proceeding instituted by the Trustee shall be brought in its name
for the benefit of all the Holders of the Certificates, subject to the
provisions of this Agreement.
Section 8.03. Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the
statements of the Depositor or the Master Servicer, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of
any Mortgage Loan or related document 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 (i) to pay to the
Trustee from time to time, and the Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee and (ii)
to pay or reimburse the Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee on behalf
of the Trust Fund in accordance with any of the provisions of this Agreement
(including, without limitation: (A) the reasonable compensation and the
expenses and disbursements of its counsel, but only for representation of the
Trustee acting in its capacity as Trustee hereunder and (B) to the extent that
the Trustee must engage persons not regularly in its employ to perform acts or
services on behalf of the Trust Fund, which acts or services are not in the
ordinary course of the duties of a trustee, paying agent or certificate
registrar, in the absence of a breach or default by any party hereto, the
reasonable compensation, expenses and disbursements of such persons, except
any such expense, disbursement or advance as may arise from its negligence,
bad faith or willful misconduct). The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Master Servicer
and held harmless against any loss, liability or expense (i) incurred in
connection with any legal action relating to this Agreement or the
Certificates, or in connection with the performance of any of the Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of
the Trustee's duties hereunder or by reason of reckless disregard of the
Trustee's obligations and duties hereunder and (ii) resulting from any error
in any tax or information return prepared by the Master Servicer. Such
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee hereunder.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation
or association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on
the Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation
or national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.
Section 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from
the trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Master Servicer and by mailing notice of resignation by
first class mail, postage prepaid, to the Certificateholders at their
addresses appearing on the Certificate Register and each Rating Agency, not
less than 60 days before the date specified in such notice when, subject to
Section 8.08, such resignation is to take effect, and (2) acceptance of
appointment by a successor trustee in accordance with Section 8.08 and meeting
the qualifications set forth in Section 8.06. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Master Servicer and
one copy of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set
of which instruments shall be delivered by the successor Trustee to the Master
Servicer one complete set to the Trustee so removed and one complete set to
the successor so appointed. Notice of any removal of the Trustee shall be
given to each Rating Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section 8.07
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.08 hereof.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor and to 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 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. The Trustee
shall be ultimately liable for the actions of any co-trustee. 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.
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 REMIC 1, REMIC
2, REMIC 3, and REMIC 4 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 of REMIC 1, REMIC 2, REMIC 3, and REMIC 4,
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 REMIC 1, REMIC 2, REMIC 3, and REMIC 4 to be treated
as a REMIC on the federal tax return of the REMIC 1, REMIC 2, REMIC 3, and
REMIC 4 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 R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax); (f) to the extent that they are
under its control conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of REMIC 1, REMIC 2,
REMIC 3, or REMIC 4 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 REMIC 1, REMIC 2, REMIC 3, or REMIC 4;
(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 REMIC 1, REMIC 2, REMIC 3, or
REMIC 4 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 the REMIC 1, REMIC 2, REMIC 3, or
REMIC 4, including but not limited to the income, expenses, assets and
liabilities of REMIC 1, REMIC 2, REMIC 3, or REMIC 4, 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 a REMIC 1, REMIC 2, REMIC 3, or REMIC 4, 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 the
REMIC 1, REMIC 2, REMIC 3, or REMIC 4 in relation to any tax matter involving
the REMIC 1, REMIC 2, REMIC 3, or REMIC 4.
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 or miscalculations of the Trustee that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
startup day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, including, without limitation, any federal, state or local tax or
minimum tax imposed upon the Trust Fund pursuant to Sections 23153 and 24872
of the California Revenue and Taxation Code if not paid as otherwise provided
for herein, such tax shall be paid by (i) the Trustee, if any such other tax
arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) (x) the Master Servicer, in the case of
any such minimum tax, and (y) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party here fails to honor its
obligations under the preceding clauses (i) or (ii), any such tax will be paid
first with amounts otherwise to be distributed to the Class R
Certificateholders and the Class B-IO Certificateholders (pro rata), and
second with amounts otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class BF
and Class BV Certificates (pro rata), second, to the Class MF-2 and MV-2
Certificates (pro rata), third, to the Class MF-1 and MV-1 Certificates (pro
rata), and fourth, to the Fixed Rate Class A Certificates and the Class AV-1
Certificates (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class R Certificates,
the Trustee is hereby authorized to retain on any Distribution Date, from the
Holders of the Class 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 Fixed Rate Carryover Reserve
Fund as an outside reserve fund within the meaning of Treasury Regulation
1.860G-2(h) that is owned by the Class BF-IO Certificateholders and that is
not an asset of the REMIC. The Trustee shall treat the rights of the Class
AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MF-1,
Class MF-2 and Class BF Certificateholders to receive payments from the Fixed
Rate Carryover Reserve Fund rights in an interest rate cap contract written by
the Class BF-IO Certificateholder in favor of the Fixed Rate
Certificateholders. Thus, each Fixed Fate Certificate shall be treated as
representing ownership of not only REMIC 4 Regular Interests, but also
ownership of an interest in an interest rate cap contract. For purposes of
determining the issue price of the REMIC 4 Regular interests, the Trustee
shall assume that the interest rate cap contract has a value of $5,000.
The Trustee shall treat the Adjustable Rate Carryover
Reserve Fund as an outside reserve fund within the meaning of Treasury
Regulation 1.860G-2(h) that is owned by the Class BV-IO Certificateholders and
that is not an asset of the REMIC. The Trustee shall treat the rights of the
Class AV-1, Class MV-1, Class MV-2 and Class BV Certificateholders to receive
payments from the Adjustable Rate Carryover Reserve Fund rights in an interest
rate cap contract written by the Class BV-IO Certificateholder in favor of the
Class AV-1, Class MV-1, Class MV-2, and Class BV Certificateholders. Thus each
Class AV-1, Class MV-1, Class MV-2, and Class BV Certificate shall be treated
as representing ownership of not only REMIC 4 Regular Interests, but also
ownership of an interest in an interest rate cap contract. For purposes of
determining the issue price of the REMIC 4 Regular interests, the Trustee
shall assume that the interest rate cap contract has a value of $5,000.
ARTICLE IX.
TERMINATION
Section 9.01. Termination upon Liquidation or Repurchase of
all Mortgage Loans.
Subject to Section 9.03, the obligations and
responsibilities of the Depositor, the Master Servicer, the Seller and the
Trustee created hereby with respect to the Trust Fund shall terminate upon the
earlier of (a) the repurchase by the Master Servicer of all of the Mortgage
Loans (and REO Properties) remaining in the each Loan Group at the price equal
to the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan
in such Loan Group (other than in respect of REO Property), (ii) accrued
interest thereon at the applicable Mortgage Rate (or, if such repurchase is
effected by the Master Servicer, at the applicable Net Mortgage Rate), (iii)
the appraised value of any REO Property in such Loan Group (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be
conducted by an appraiser mutually agreed upon by the Master Servicer and the
Trustee and (iv) any unreimbursed Servicing Advances, and the principal
portion of any unreimbursed Advances, made on the Mortgage Loans in such Loan
Group prior to the exercise of such repurchase and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement, as applicable.
In no event shall the trusts created hereby continue beyond the earlier of (i)
the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof and (ii) the Latest Possible
Maturity Date.
The right to repurchase all Mortgage Loans and REO
Properties in a Loan Group pursuant to clause (a) above shall be conditioned
upon the Stated Principal Balance of the Mortgage Loans in such Loan Group, at
the time of any such repurchase, aggregating ten percent or less of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans in such Loan
Group.
Section 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds in the Certificate Account, the
Master Servicer shall direct the Trustee to send a final distribution notice
promptly to each Certificateholder or (ii) the Trustee determines that a Class
of Certificates shall be retired after a final distribution on such Class, the
Trustee shall notify the Certificateholders within five (5) Business Days
after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately
following Distribution Date. Any final distribution made pursuant to the
immediately preceding sentence will be made only upon presentation and
surrender of the related Certificates at the Corporate Trust Office of the
Trustee. If the Master Servicer elects to terminate the Trust Fund pursuant to
clause (a) of Section 9.01, at least 20 days prior to the date notice is to be
mailed to the affected 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
Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given
promptly by the Trustee by letter to Certificateholders mailed not earlier
than the 10th day and no later than the 15th day of the month immediately
preceding the month of such final distribution. Any such notice shall specify
(a) the Distribution Date upon which final distribution on the Certificates
will be made upon presentation and surrender of 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 the 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 Certificateholders.
In the event such notice is given, the Master Servicer shall
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Master Servicer the Mortgage Files for
the Mortgage Loans.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders of each Class the
amounts allocable to such Certificates held in the Distribution Account (and,
if applicable, the Fixed Rate Carryover Reserve Fund and the Adjustable Rate
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 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
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Trust Fund that remain subject hereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase
option on both of the Fixed Rate Mortgage Loans and the Adjustable Rate
Mortgage Loans as provided in Section 9.01, the Trust Fund shall be terminated
in accordance with the following additional requirements, unless the Trustee
has been supplied with an Opinion of Counsel, at the expense of the Master
Servicer, to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 9.03 will not (i) result in the imposition of
taxes on "prohibited transactions" of a REMIC, or (ii) cause a REMIC to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master
Servicer shall satisfy all the requirements of a qualified liquidation under
Section 860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Master Servicer;
(2) During such 90-day liquidation period, and at or
prior to the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust
Fund for cash; and
(3) At the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class R Certificateholders all cash on hand
(other than cash retained to meet claims), and the Trust Fund shall terminate
at that time.
(b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Certificateholders.
(c) The Trustee as agent for each REMIC hereby agrees to
adopt and sign such a plan of complete liquidation upon the written request of
the Master Servicer, and the receipt of the Opinion of Counsel referred to in
Section 9.03(a)(1) and to take such other action in connection therewith as
may be reasonably requested by the Master Servicer.
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, or to make such other provisions with
respect to matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Certificateholder; provided that any such amendment shall
be deemed not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal
of the respective ratings then assigned to the Certificates, it being
understood and agreed that any such letter in and of itself will not represent
a determination as to the materiality of any such amendment and will represent
a determination only as to the credit issues affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Trustee, the Depositor, the Master Servicer and the
Seller may at any time and from time to time amend this Agreement 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 affected thereby evidencing not less than 51% of
the Voting Rights of such Class for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect
in any material respect the interests of the Holders of any Class of
Certificates in a manner other than as described in (i), without the consent
of the Holders of Certificates of such Class evidencing 66% or more of the
Voting Rights of such Class or (iii) reduce the aforesaid percentages of
Certificates the Holders of 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 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 and (ii) the conveyance provided for in this Agreement shall
be deemed to be an assignment and a grant 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:
(i) Each report to Certificateholders described in Section
4.04;
(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 delivered to (a)
in the case of the Depositor, CWABS, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇, with a copy to the same address,
Attention: Legal Department; (b) in the case of the Seller or the Master
Servicer, 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;
(c) in the case of the Trustee, The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ Attention: Corporate Trust MBS Administration or such other
address as the Trustee may hereafter furnish to the Depositor or the Master
Servicer; and (d) in the case of the Rating Agencies, (i) Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., Attention:
Mortgage Surveillance, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and (ii)
Fitch IBCA, Inc., Attention: Structured Finance, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. 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 Depositor.
Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates shall also have made
written request to the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice,
it will permit any representative of the Depositor 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 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 or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall
be borne by the Master Servicer.
Section 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and
shall be deemed fully paid.
* * *
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Seller and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
CWABS, INC., as Depositor
By:
----------------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Master Servicer and Seller
By:
----------------------------------
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------
Name:
Title:
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this ____th day of May, 1999, before me, a notary public
in and for said State, appeared ▇▇▇▇▇ ▇▇▇▇▇▇, personally known to me on the
basis of satisfactory evidence to be the Executive Vice President of
Countrywide Home Loans, Inc., one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this ____th day of May, 1999, before me, a notary public
in and for said State, appeared ▇▇▇▇▇ ▇▇▇▇▇▇, personally known to me on the
basis of satisfactory evidence to be the Vice President of CWABS, Inc., one of
the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of such corporation and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of May, 1999, before me, a notary public in
and for said State, appeared _______________________, personally known to me
on the basis of satisfactory evidence to be an Assistant Treasurer, of The
Bank of New York, a New York banking corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
Exhibit A-1 through A-13
[Exhibits A-1 through A-15 are
photocopies of such Certificates as
delivered.]
[see appropriate documents delivered at closing]
Exhibit B
[Reserved]
Exhibit C
[Reserved]
Exhibit D
[Exhibit D is a photocopy
of the Class R Certificate
as delivered.]
[see appropriate documents delivered at closing]
Exhibit E
[Exhibit E is a photocopy
of the Tax Matters Person Class R Certificate
as delivered.]
[see appropriate documents delivered at closing]
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as
of May 1, 1999 among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc.,
as Seller and Master Servicer, and The
Bank of New York, as Trustee, Asset-Backed
Certificates, Series 1999-2
------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed in the attached list of exceptions) it
has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay to the
order of, without recourse"; and
(ii) a duly executed assignment of the Mortgage in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement referred to above.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, 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:
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of May 1, 1999
among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as Seller and Master Servicer, and The
Bank of New York, as Trustee, Asset-Backed
Certificates, Series 1999-2
-------------------------------------------------------
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) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay to the
order of _______________ without recourse", with all intervening endorsements
that show a complete chain of endorsement from the originator to the Seller;
(ii) the original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement referred to above;
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage;
(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 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.
If the Trustee has not received the original recorded Mortgage or an
original recorded assignment of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv) above, 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), (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
collectability, 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:
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of May
1, 1999 among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller and Master Servicer,
and The Bank of New York, as Trustee, Asset-Backed
Certificates, Series 1999-2
-----------------------------------------------------
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
"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) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay to the
order of, without recourse," and
(ii) a duly executed assignment of the Mortgage in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement referred to above.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, 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:
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement dated as of May 1, 1999
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller and Master Servicer, and The Bank of New
York, as Trustee, Asset-Backed Certificates, Series 1999-2
----------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attached Document Exception
Report) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay to the
order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller;
(ii) the original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement referred to above;
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage;
(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 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), (xiv), (xv) and (xvi) 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
collectability, 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:
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 R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated
as of May 1, 1999 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as Seller and Master Servicer
and The Bank of New York, as Trustee. Capitalized terms used, but not defined
herein or in Exhibit 1 hereto, shall have the meanings ascribed to such terms
in the Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is, 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 either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit.
The Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal 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 M 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 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)(3O).
10. The Transferee is aware that the Class 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.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of _____________, 19__.
[NAME OF TRANSFEREE]
By:
----------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and
to be the ____________ of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of _______, 19__.
--------------------------------------
NOTARY PUBLIC
My Commission expires the ____ day ______ of
________________ 19__.
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 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 4224, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class R Certificate to such Person may cause the
Trust Fund to fail to qualify as a REMIC at any time that certain Certificates
are Outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality
of the United States or of any State or political subdivision thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its
board of directors is not selected by such government unit.
"Person": Any individual, corporation, partnership, joint venture, bank,
joint stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
EXHIBIT 2
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest in a Class
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 R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class 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 R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class R Certificate unless, in
addition to the certificates required to be delivered to the Trustee
under subparagraph (b) above, the Trustee shall have been furnished with
an affidavit (a "Transfer Affidavit") of the initial owner or the
proposed transferee in the form attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class 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 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 R Certificate and (C)
not to Transfer its Ownership Interest in a Class R Certificate or to
cause the Transfer of an Ownership Interest in a Class 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 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 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 R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class 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 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 R
Certificate at and after either such time. Any such payments so recovered
by the Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Class R
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trustee, the Seller or the
Master Servicer to the effect that the elimination of such restrictions will
not cause the Trust Fund to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Class 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 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 R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS B-IO AND CLASS R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed
Certificates, Series 1999-2
Ladies and Gentlemen:
In connection with our disposition of the Class __ 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 that would result in, a violation of
Section 5 of the Act and (c) if we are disposing of a Class R Certificate, 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 May 1, 1999, among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller and Master
Servicer, and The Bank of New York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferor
By: _______________________________
Name:
Title:
EXHIBIT K
FORM OF INVESTMENT LETTER [NON-RULE 144A] FOR
CLASS B-IO AND CLASS R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed
Certificates, Series 1999-2
Ladies and Gentlemen:
In connection with our acquisition of the Class __ Certificates in the
Denomination of (the "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) we are not
an employee benefit plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended, nor a plan subject to Section 4975 of the
Internal Revenue Code of 1986 (each of the foregoing, a "Plan"), nor are we
acting on behalf of any Plan or (e) we are acquiring the Certificates for
investment for our own account and not with a view to any distribution of the
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 that would result in a
violation of Section 5 of the Act, and (g) we will not sell, transfer or
otherwise dispose of any Certificates unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act or is exempt from such registration requirements, and if requested, we will
at our expense provide an opinion of counsel satisfactory to the addressees of
this certificate that such sale, transfer or other disposition may be made
pursuant to an exemption from the Act, (2) the purchaser or transferee of the
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 dated as of May 1, 1999 (the "Agreement"), among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller and Master
Servicer, and The Bank of New York, as Trustee. All capitalized terms used
herein but not defined herein shall have the meanings assigned to them in the
Agreement.
Very truly yours,
_____________________________________
Name of Transferee
By:__________________________________
Name:
Title:
EXHIBIT L
FORM OF RULE 144A LETTER FOR
CLASS B-IO AND CLASS R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed
Certificates, Series 1999-2
Ladies and Gentlemen:
In connection with our proposed purchase of the Class R Certificates
(the "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) we are not
an employee benefit plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended, nor a plan subject to Section 4975 of the
Internal Revenue Code of 1986 (each of the foregoing, a "Plan"), nor are we
acting on behalf of any Plan or (e) we have not, nor has anyone acting on our
behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from, or otherwise approached or negotiated with respect to
the Certificates, any interest in the Certificates or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Certificates under the Securities
Act or that would render the disposition of the Certificates a violation of
Section 5 of 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, and (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
the 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 May 1, 1999, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller and Master Servicer, and The Bank of New York, as Trustee.
____________________________________
Name of Buyer
By:_________________________________
Name:
Title:
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 $__________1 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.
___ 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. The 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. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively State or
Local Plans or ERISA Plans as defined above, and no participant of
the Buyer is an individual retirement account or an H.R. 10
(▇▇▇▇▇) plan.
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) 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.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated 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.
____________________________________
Name of Buyer
By: ________________________________
Name:
Title:
Date: ______________________________
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).
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) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands 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.
_______________________________________
Name of Buyer or Adviser
By: ___________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Name of Buyer
Date: ________________________________
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 1999-2, 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 May 1, 1999 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller and Master Servicer, and the Trustee.
( ) Mortgage Note dated ___________, 19__, 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 _______________.
( ) 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 Trustee, 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 Trustee, 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: _________________, 19__
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 1999-2
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE Master Servicer, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO
SECTION 3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE
CREDITED.
____________ _____________________ DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
Exhibit O
[Exhibit O is a photocopy
of the Depository Agreement
as delivered.]
[see appropriate documents delivered at closing]
EXHIBIT P
FORM OF MORTGAGE NOTE AND MORTGAGE
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that
case, Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.