Exhibit 99.1
CWMBS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
WASHINGTON MUTUAL BANK, FA
Transferor and Servicer
WASHINGTON MUTUAL HOME LOANS, INC.
Transferor
and
THE BANK OF NEW YORK,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2001
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CHL MORTGAGE PASS-THROUGH TRUST 2001-HYB1
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2001-HYB1
Table of Contents
Page
ARTICLE I
DEFINITIONS
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-5
SECTION 2.03. Representations, Warranties and Covenants of the Seller and Servicer.....................II-6
SECTION 2.04. Representations and Warranties of the Depositor as to the Mortgage Loans.................II-8
SECTION 2.05. Delivery of Opinion of Counsel in Connection with Substitutions..........................II-9
SECTION 2.06. Execution and Delivery of Certificates...................................................II-9
SECTION 2.07. REMIC Matters...........................................................................II-10
SECTION 2.08. Covenants of the Servicer...............................................................II-10
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans......................................................III-1
SECTION 3.02. Subservicing; Enforcement of the Obligations of Servicers...............................III-2
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Servicer......................III-2
SECTION 3.04. Trustee to Act as Servicer..............................................................III-3
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; Swap Proceeds 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-6
SECTION 3.08. Permitted Withdrawals from the Certificate Account and the Distribution Account.........III-7
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies..............III-9
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements..............................III-10
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans........III-11
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files........................................III-14
SECTION 3.13. Documents Records and Funds in Possession of Servicer to be Held for the Trustee.......III-15
SECTION 3.14. Servicing Compensation.................................................................III-15
SECTION 3.15. Access to Certain Documentation........................................................III-16
SECTION 3.16. Annual Statement as to Compliance......................................................III-16
i
SECTION 3.17. Annual Independent Public Accountants' Servicing Statement; Financial Statements.......III-16
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.........................................III-17
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
SECTION 4.01. Advances.................................................................................IV-1
SECTION 4.02. Priorities of Distribution...............................................................IV-1
SECTION 4.03. [Reserved]...............................................................................IV-6
SECTION 4.04. Allocation of Realized Losses............................................................IV-6
SECTION 4.05. Mandatory Contract Mandatory Auction of the Class 3-A-1 Certificates.....................IV-7
SECTION 4.06. Monthly Statements to Certificateholders.................................................IV-7
SECTION 4.07. [Reserved]...............................................................................IV-9
SECTION 4.08. [Reserved]..............................................................................IV-11
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates..........................................................................V-1
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates...............V-1
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.........................................V-6
SECTION 5.04. Persons Deemed Owners.....................................................................V-6
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.................................V-6
SECTION 5.06. Maintenance of Office or Agency...........................................................V-7
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.................................VI-7
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.................................VI-7
SECTION 6.03. Limitation on Liability of the Depositor, the Seller, the Servicer and Others............VI-7
SECTION 6.04. Limitation on Resignation of Servicer....................................................VI-2
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.......................................................................VII-3
SECTION 7.02. Trustee to Act; Appointment of Successor................................................VII-4
SECTION 7.03. Notification to Certificateholders......................................................VII-5
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee......................................................................VIII-1
ii
SECTION 8.02. Certain Matters Affecting the Trustee..................................................VIII-2
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans..................................VIII-3
SECTION 8.04. Trustee May Own Certificates...........................................................VIII-3
SECTION 8.05. 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-5
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee..........................................VIII-5
SECTION 8.11. Tax Matters............................................................................VIII-7
SECTION 8.12. Periodic Filings.......................................................................VIII-9
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all Mortgage Loans...........................IX-1
SECTION 9.02. Final Distribution on the Certificates...................................................IX-1
SECTION 9.03. Additional Termination Requirements......................................................IX-2
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-5
SECTION 10.11. [Reserved]................................................................................X-6
SECTION 10.12. Protection of Assets......................................................................X-6
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SCHEDULES
Schedule I: Mortgage Loan Schedule.............................................................S-I-1
Schedule II: Representations and Warranties
of the Seller/Servicer............................................................S-II-1
Schedule III: Representations and
Warranties as to the Mortgage Loans..............................................S-III-1
Schedule IV: Principal Balances Schedule [if applicable].......................................S-IV-1
Schedule V: Form of Monthly Servicer Report....................................................S-V-1
EXHIBITS
Exhibit A: Form of Senior Certificate (excluding Notional Amount Certificates)..................A-1
Exhibit B: Form of Subordinated Certificate.....................................................B-1
Exhibit C: Form of Class A-R Certificate........................................................C-1
Exhibit D: [Reserved]...........................................................................D-1
Exhibit E: Form of Reverse of Certificates......................................................E-1
Exhibit F-1: Form of Initial Certification of Trustee.............................................F-1
Exhibit F-2: [Reserved]...........................................................................F-2
Exhibit G-1: [Reserved]...........................................................................G-1
Exhibit G-2: [Reserved]...........................................................................G-2
Exhibit H-1: Form of Final Certification of Trustee...............................................H-1
Exhibit H-2: [Reserved]...........................................................................H-2
Exhibit I: Form of Transfer Affidavit...........................................................I-1
Exhibit J-1: Form of Transferor Certificate (Residual)............................................J-1
Exhibit J-2: Form of Transfer Certificate (Private)...............................................J-2
Exhibit K: Form of Investment Letter [Non-Rule 144A]............................................K-1
Exhibit L: Form of Rule 144A Letter.............................................................L-1
Exhibit M: Form of Request for Release (for Trustee)............................................M-1
Exhibit N: Form of Request for Release (Mortgage Loan)
Paid in Full, Repurchased and Replaced)..............................................N-1
Exhibit O: [Reserved] ..........................................................................O-1
Exhibit P: [Reserved]...........................................................................P-1
Exhibit Q: Form of Transferee Certificate.......................................................Q-1
Exhibit R: Schedule of Recording States.........................................................R-1
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THIS POOLING AND SERVICING AGREEMENT, dated as of July 1, 2001, among
CWMBS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller ( the
"Seller"), WASHINGTON MUTUAL BANK, FA, as servicer (in such capacity, the
"Servicer") and transferor (in such capacity, a "Transferor"), WASHINGTON
MUTUAL HOME LOANS, INC., as transferor (a "Transferor" and with Washington
Mutual Bank, FA, the "Transferors") and THE BANK OF NEW YORK, a banking
corporation organized under the laws of the State of New York, as trustee (the
"Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of a single REMIC. The Certificates will represent
the entire beneficial ownership interest in the Trust Fund. The Regular
Certificates will represent the "regular interest" in the REMIC and the
Residual Certificates will represent the single "residual interest" in the
REMIC. The "latest possible maturity date" for federal income tax purposes of
all interests created hereby will be the Latest Possible Maturity Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess
thereof in which such Classes shall be issuable (except that one Certificate
of each Class of Certificates may be issued in a different amount and, in
addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
Integral
Initial Class Multiples
Certificate Pass-Through Minimum in Excess of
Class Designation Balance Rate Denomination Minimum
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 1-A-1 $ 229,366,000 (3) $25,000.00 $1,000.00
Class 2-A-1 $ 298,712,000 (3) $25,000.00 $1,000.00
Class 3-A-1 $ 65,000,000 (3) $25,000.00 $1,000.00
Class 3-A-2 $ 195,605,000 (3) $25,000.00 $1,000.00
Class A-R $ 100 (3) (1) (1)
Class M $ 8,537,000 (2) $25,000.00 $1,000.00
Class B-1 $ 6,505,000 (2) $25,000.00 $1,000.00
Class B-2 $ 4,472,000 (2) $25,000.00 $1,000.00
Class B-3 $ 1,219,000 (2) $100,000.00 $1,000.00
Class B-4 $ 1,219,000 (2) $100,000.00 $1,000.00
Class B-5 $ 2,440,138.11 (2) $100,000.00 $1,000.00
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(1) The Class A-R Certificates will be issued as two separate certificates,
one with an initial Certificate Balance of $99.95 and the Tax Matters
Person Certificate with an initial Certificate Balance of $0.05.
(2) The Pass-Through Rate for each Class of Subordinated Certificates for
any Distribution Date will be equal to (a) the sum of: (i) the
weighted average Adjusted Net Mortgage Rate on the Mortgage Loans in
Loan Group 1 multiplied by the difference between the aggregate of
the Stated Principal Balances of the Mortgage Loans in Loan Group 1
as of the Due Date in the month preceding the month of that
Distribution Date and the aggregate of the Class Certificate Balances
of the group 1 senior certificates immediately prior to that
Distribution Date, (ii) the weighted average Adjusted Net Mortgage
Rate on the Mortgage Loans in Loan Group 2 multiplied by the
difference between the aggregate of the Stated Principal Balances of
the Mortgage Loans in Loan Group 2 as of the Due Date in the month
preceding the month of that Distribution Date and the aggregate of
the Class Certificate Balances of the group 2 senior certificates
immediately prior to that Distribution Date, and (iii) the weighted
average Adjusted Net Mortgage Rate on the Mortgage Loans in Loan
Group 3 multiplied by the difference between the aggregate of the
Stated Principal Balances of the Mortgage Loans in Loan Group 3 as of
the Due Date in the month preceding the month of that Distribution
Date and the aggregate of the Class Certificate Balances of the group
3 senior certificates immediately prior to that Distribution Date,
divided by (b) the aggregate Class Certificate Balance of the
Subordinated
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Certificates immediately prior to that Distribution Date.
Notwithstanding the foregoing, in no event will the Pass-Through Rate
of the Subordinated Certificates be less than zero. The Pass-Through
Rate for each Class of Subordinated Certificates for the first
Distribution Date will be 6.11986% per annum.
(3) On any Distribution Date the pass-through rate for the Class 1-A-1
Certificates and the Class A-R Certificates will be the weighted
average Adjusted Net Mortgage Rate on the Mortgage Loans in loan
group 1; the pass-through rate for the Class 2-A-1 Certificates will
be the weighted average Adjusted Net Mortgage Rate on the Mortgage
Loans in loan group 2 and the pass-through rate for the Class 3-A-1
and Class 3-A-2 Certificates will be the weighted average Adjusted
Net Mortgage Rate on the Mortgage Loans in loan group 3. The
pass-through rates for the Class 1-A-1, Class A-R, Class 2-A-1 and
the Class 3-A-1 and Class 3-A-2 Certificates for the first
Distribution Date will be 5.98740% per annum, 5.98740% per annum,
6.24010% per annum, 6.09861% per annum and 6.09861% per annum,
respectively.
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Set forth below are designations of Classes of Certificates to the categories
used herein:
Book-Entry Certificates............. All Classes of Certificates other than the Physical Certificates.
Delay Certificates.................. All Classes of Certificates.
ERISA-Restricted
Certificates........................ The Residual Certificates and Private Certificates.
Loan Group 1
Senior Certificates................ Class 1-A-1 and Class A-R Certificates.
Group 1 Certificates................ Loan Group 1 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 1.
Loan Group 2
Senior Certificates................ Class 2-A-1 Certificates.
Group 2 Certificates................ Loan Group 2 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 2.
Loan Group 3
Senior Certificates................ Class 3-A-1 and Class 3-A-2 Certificates.
Group 3 Certificates................ Loan Group 3 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 3.
Offered Certificates................ All Classes of Certificates other than the Private Certificates.
Physical Certificates............... The Residual Certificates.
Private Certificates................ Class B-3, Class B-4 and Class B-5 Certificates.
Rating Agencies..................... ▇▇▇▇▇'▇ and S&P.
Regular Certificates................ All Classes of Certificates, other than the Residual Certificates.
Residual Certificates............... Class A-R Certificates.
Senior Certificate Group............ The Loan Group 1 Senior Certificates, the Loan Group 2 Senior Certificates or
the Loan Group 3 Senior Certificates, as applicable.
Senior Certificates................. Class 1-A-1, Class 2-A-1, Class 3-A-1, Class 3-A-2 and Class A-R Certificates.
Subordinated Certificates .......... Class M, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates.
8
Defined terms and provisions herein relating to statistical rating
agencies not designated above as Rating Agencies shall be of no force or
effect.
9
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Adjusted Net Mortgage Rate: As to each Mortgage Loan and any Distribution
Date, the per annum rate equal to the Mortgage Rate as of the Due Date in the
month preceding the month of such Distribution Date less the related Servicing
Fee Rate.
Advance: As to a Loan Group, the payment required to be made by the
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such payment being equal to the aggregate of payments of
principal and interest (net of the Servicing Fee and net of any net income in
the case of any REO Property) on the Mortgage Loans in such Loan Group that
were due on the related Due Date and not received as of the close of business
on the related Determination Date, less the aggregate amount of any such
delinquent payments that the Servicer has determined would constitute a
Nonrecoverable Advance if advanced.
Aggregate Subordinated Percentage: As to any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is equal to the
aggregate Class Certificate Balance of the Subordinated Certificates
immediately prior to such Distribution Date and the denominator of which is
the aggregate Stated Principal Balance of all the Mortgage Loans as of the Due
Date in the month preceding the month of such Distribution Date.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allocable Share: As to any Distribution Date and any Loan Group and any
Class of Certificates, the ratio that the amount calculated with respect to
such Distribution Date (A) with respect to the Senior Certificates of the
related Senior Certificate Group, pursuant to clause (i) of the definition of
Class Optimal Interest Distribution Amount (without giving effect to any
reduction of such amount pursuant to Section 4.02(d)) and (B) with respect to
the Subordinated Certificates, pursuant to the definition of Assumed Interest
Amount for such Loan Group and Class or after the second Senior Termination
Date, pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amount
pursuant to Section 4.02(d)) bears to the aggregate amount calculated with
respect to such Distribution Date for each such related Class of Certificates
pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amounts
pursuant to Section 4.02(d)) or the definition of Assumed Interest Amount for
such Loan Group and Class, as applicable.
Amount Held for Future Distribution: As to any Distribution Date and
Mortgage Loans in a Loan Group, the aggregate amount held in the Certificate
Account at the close
10
of business on the related Determination Date on account of (i) Principal
Prepayments and Net Liquidation Proceeds received in the month of such
Distribution Date relating to such Loan Group and (ii) all Scheduled Payments
due after the related Due Date relating to such Loan Group.
Applicable Credit Support Percentage: As defined in Section 4.02(e).
Appraised Value: With respect to any Mortgage Loan, the Appraised Value
of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of
the Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan and (ii) with
respect to a Refinancing Mortgage Loan (other than a Streamlined Documentation
Mortgage Loan), the value of the Mortgaged Property based upon the appraisal
made at the time of the origination of such Refinancing Mortgage Loan; and
(iii) with respect to a Streamlined Documentation Mortgage Loan with a
Loan-to-Value Ratio at origination of 95% or less, the value of the Mortgaged
Property based upon the appraisal made at the time of the origination of the
original mortgage loan.
Assumed Balance: With respect to any Distribution Date, Class of
Subordinated Certificates and Loan Group, each such Class' pro rata interest
(based on their respective Class Certificate Balances) in such Loan Group of
an amount equal to the product of the Pro Rata Subordinated Percentage for
such Loan Group as of such Distribution Date and the aggregate of the Stated
Principal Balance of each Mortgage Loan in such Loan Group as of the Due Date
occurring in the month of such Distribution Date; provided that this amount
shall not be less than zero.
Assumed Interest Amount: With respect to any Distribution Date, Loan
Group and Class of Subordinated Certificates, one month's interest accrued
during the related Interest Accrual Period at the weighted average Adjusted
Net Mortgage Rate for the Mortgage Loans in the related Loan Group on the
related Assumed Balance immediately prior to that Distribution Date.
Auction Administrator: The Bank of New York, not in its individual
capacity but solely as Trustee.
Auction Distribution Date: The Distribution Date in April 2006.
Auction Price: The proceeds of the auction conducted by the Auction
Administrator on the fifth Business Day prior to the Auction Distribution
Date, which shall be equal to the sum of (i) the product of (a) the percentage
of par indicated by the winning bidder in the auction conducted by the Auction
Administrator and (b) the Class Certificate Balance of the Class 3-A-1
Certificates on the Auction Distribution Date (after application of all
principal distributions and the allocation of Realized Losses on such Auction
Distribution Date), and (ii) interest accrued at the Pass-Through Rate of such
Class of Certificates for the Distribution Date immediately following the
Auction Distribution Date on such Class Certificate Balance of the Class 3-A-1
Certificates from
11
the first day of the month of such Auction Distribution Date up to, but
excluding, the Auction Distribution Date.
Available Funds: As to any Distribution Date and the Mortgage Loans in a
Loan Group, the sum of (a) the aggregate amount held in the Certificate
Account at the close of business on the related Determination Date in respect
of such Mortgage Loans net of the related Amount Held for Future Distribution
and net of amounts permitted to be withdrawn from the Certificate Account
pursuant to clauses (i) - (viii), inclusive, of Section 3.08(a) in respect of
such Mortgage Loans and amounts permitted to be withdrawn from the
Distribution Account pursuant to clauses (i) - (iii), inclusive, of Section
3.08(b) in respect of such Mortgage Loans, (b) the amount of the related
Advance, (c) in connection with Defective Mortgage Loans in such Loan Group,
as applicable, the aggregate of the Purchase Prices and Substitution
Adjustment Amounts deposited on the related Distribution Account Deposit Date
and (d) the Transfer Payment Received for such Loan Group less the Transfer
Payment Made for such Loan Group; provided, however, that on the second Senior
Termination Date, Available Funds with respect to the Loan Group relating to
the remaining Senior Certificate Group shall include the Available Funds from
the other Loan Groups after all distributions are made on the Senior
Certificates of the other Senior Certificate Groups and on any Distribution
Date thereafter, Available Funds shall be calculated based on all the Mortgage
Loans in the Mortgage Pool, as opposed to the Mortgage Loans in the related
Loan Group.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Bankruptcy Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation
or Debt Service Reduction; provided, however, that a Bankruptcy Loss shall not
be deemed a Bankruptcy Loss hereunder so long as the Servicer has notified the
Trustee in writing that the Servicer is diligently pursuing any remedies that
may exist in connection with the related Mortgage Loan and either (A) the
related Mortgage Loan is not in default with regard to payments due thereunder
or (B) delinquent payments of principal and interest under the related
Mortgage Loan and any related escrow payments in respect of such Mortgage Loan
are being advanced on a current basis by the Servicer, in either case without
giving effect to any Debt Service Reduction or Deficient Valuation.
Bankruptcy Loss Coverage Amount: As of any Determination Date, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated
to the Certificates since the Cut-off Date and (ii) any permissible reductions
in the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee to the effect that any such reduction will not result in
a downgrading of the then current ratings assigned to the Classes of
Certificates rated by it.
Book-Entry Certificates: As specified in the Preliminary Statement.
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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
States of California or Illinois 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 executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account or Accounts created
and maintained by the Servicer pursuant to Section 3.05 with a depository
institution in the name of the Servicer for the benefit of the Trustee on
behalf of Certificateholders and designated "Washington Mutual Bank, FA in
trust for the registered holders of CHL Mortgage Pass-Through Trust 2001-HYB1
Mortgage Pass-Through Certificates, Series 2001-HYB1."
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof minus
the sum of (i) all distributions of principal previously made with respect
thereto and (ii) all Realized Losses allocated thereto and, in the case of any
Subordinated Certificates, all other reductions in Certificate Balance
previously allocated thereto pursuant to Section 4.04, without duplication.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate.
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, 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 Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof (other than the second sentence of Section 10.01 hereof) that requires
the consent of the Holders of Certificates of a particular Class as a
condition to the taking of any action hereunder. The Trustee is entitled to
rely conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set forth
in the Preliminary Statement.
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Class Certificate Balance: With respect to any Class and as to any date
of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the definition of Class
Optimal Interest Distribution Amount for such Class exceeds the amount of
interest actually distributed on such Class on such Distribution Date pursuant
to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and Class, the sum of (i) one month's interest accrued
during the related Interest Accrual Period at the Pass-Through Rate for such
Class on the related Class Certificate Balance immediately prior to such
Distribution Date, subject to reduction as provided in Section 4.02(d) and
(ii) any Class Unpaid Interest Amounts for such Class.
Class Subordination Percentage: With respect to any Distribution Date and
each Class of Subordinated Certificates, the quotient (expressed as a
percentage) of (a) the Class Certificate Balance of such Class of Certificates
immediately prior to such Distribution Date divided by (b) the aggregate of
the Class Certificate Balances immediately prior to such Distribution Date of
all Classes of Certificates.
Class Unpaid Interest Amounts: As to any Distribution Date and Class of
interest bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of the definition of Class Optimal Interest Distribution Amount.
Closing Date: July 24, 2001.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Compensating Interest Cap: As to any Distribution Date, an amount equal
to 1/12th of 0.375% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Due Date in the month prior to the month of such Distribution
Date.
Confirmation And Agreement: The Confirmation and Agreement dated July 24,
2001 evidencing a transaction between the Swap Contract Counterparty and the
Auction Administrator.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Coop Shares: Shares issued by a Cooperative Corporation.
14
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The designated office of the Trustee in the State
of New York at which 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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attn: Mortgage-Backed Securities Group, CWMBS, Inc.
Series 2001-HYB1, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇, and which is the address to
which notices to and correspondence with the Trustee should be directed.
Cut-off Date: July 1, 2001.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on 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 which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation
or any reduction that results in a permanent forgiveness of principal.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.
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 the 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 which is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03(c) hereof.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or,
if not the foregoing, the Percentage Interest appearing on the face thereof.
Depositor: CWMBS, Inc., a Delaware corporation, or its successor in
interest.
15
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as 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 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: As to any Distribution Date, the 15th day of each
month or if such 15th day is not a Business Day the next Business Day;
provided, however, that if such 15th day or such Business Day, whichever is
applicable, is less than two Business Days prior to the related Distribution
Date, the Determination Date shall be the first Business Day which is two
Business Days preceding such Distribution Date.
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 CHL Mortgage Pass-Through Trust 2001-HYB1
Mortgage Pass-Through Certificates, Series 2001-HYB1." 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, the
Business Day immediately preceding such Distribution Date.
Distribution Date: The first Business Day immediately following each
Servicer Advance Date, commencing in August 2001.
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 commencing
on the second day of the month preceding the month in which that Distribution
Date occurs and ending on the first day of the month in which that
Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with
Washington Mutual Bank, FA, or (ii) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
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) have the
highest short-term ratings of each Rating Agency at the time any amounts are
held on deposit therein, or (iii) 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
16
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 (iv) a trust account or
accounts maintained with (a) the trust department of a federal or state
chartered depository institution or (b) a trust company, acting in its
fiduciary capacity or (v) any other account acceptable to each Rating Agency.
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 Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.06(a) hereof, which shall be held in the name
of the Servicer for the benefit of the Trustee on behalf of the
Certificateholders and designated "Washington Mutual Bank, FA in trust for the
registered holders of CHL Mortgage Pass-Through Trust 2001-HYB1 Mortgage
Pass-Through Certificates Series 2001-HYB1."
Event of Default: As defined in Section 7.01 hereof.
Excess Loss: The amount of any (i) Fraud Loss realized after the Fraud
Loss Coverage Termination Date, (ii) Special Hazard Loss realized after the
Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss realized
after the Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the Net Liquidation Proceeds of such Mortgage Loan
received in the calendar month in which such Mortgage Loan became a Liquidated
Mortgage Loan, exceeds (i) the unpaid principal balance of such Liquidated
Mortgage Loan as of the Due Date in the month in which such Mortgage Loan
became a Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage
Rate from the Due Date as to which interest was last paid or advanced (and not
reimbursed) to Certificateholders up to the Due Date applicable to the
Distribution Date immediately following the calendar month during which such
liquidation occurred.
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.
17
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated as a
Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b)
the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance Group,
or such other address as Fitch may hereafter furnish to the Depositor and the
Servicer.
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.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a
loss by reason of the denial of coverage under any related Primary Insurance
Policy because of such fraud, dishonesty or misrepresentation.
Fraud Loss Coverage Amount: As of the Closing Date, $16,261,505 subject
to reduction from time to time, by the amount of Fraud Losses allocated to the
Certificates. In addition, on each anniversary of the Cut-off Date, the Fraud
Loss Coverage Amount will be reduced as follows: (a) on the first, second,
third and fourth anniversaries of the Cut-off Date, to an amount equal to the
lesser of (i) 1% of the then current Pool Stated Principal Balance and (ii)
the excess of the Fraud Loss Coverage Amount as of the preceding anniversary
of the Cut-off Date over the cumulative amount of Fraud Losses allocated to
the Certificates since such preceding anniversary; and (b) on the fifth
anniversary of the Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Bankruptcy Coverage Amount: $100,000.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any Insurance
Policy, 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.
18
Interest Accrual Period: With respect to each Class of Delay Certificates
and any Distribution Date, the calendar month prior to the month of such
Distribution Date.
Interim Representation and Warranty Period: The period of time with
respect to a Mortgage Loan sold to the Seller (i) by Washington Mutual Bank,
FA, from June 25, 2001 to the Closing Date, and (ii) by Washington Mutual Home
Loans, Inc., from June 26, 2001 to the Closing Date.
Latest Possible Maturity Date: The Distribution Date following the third
anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the Servicer has determined (in accordance with this Agreement) that it
has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan, including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted 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.
Loan Group: Any of Loan Group 1, Loan Group 2 or Loan Group 3, as
applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 1 Senior Certificates: As specified in the Preliminary
Statement.
Loan Group 2: All Mortgage Loans identified as Loan Group 2 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 2 Senior Certificates: As specified in the Preliminary
Statement.
Loan Group 3: All Mortgage Loans identified as Loan Group 3 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 3 Senior Certificates: As specified in the Preliminary
Statement.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
19
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at least
51% of the Percentage Interests evidenced by all Certificates of such Class.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.06.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto. If
▇▇▇▇▇'▇ is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Moody's shall be
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Servicer.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest 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 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.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Servicer to reflect the addition of Substitute Mortgage Loans
and the deletion of Deleted Mortgage Loans pursuant to the provisions of this
Agreement)
20
transferred to the Trustee as part of the Trust Fund and from time to time
subject to this Agreement, attached hereto as Schedule I, setting forth the
following information with respect to each Mortgage Loan by Loan Group:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the stated maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the date on which the first payment was due on the Mortgage
Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is either (a)
a detached or attached single family dwelling (b) a condominium
unit, or (c) a two- to four-unit residential property;
(xi) the Mortgage Rate;
(xii) the purpose for the Mortgage Loan;
(xiii) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(xiv) the Servicing Fee Rate for the Mortgage Loan; and
(xv) a code indicating whether the Mortgage Loan is a MERS Mortgage
Loan.
Such schedule shall also set forth the total of the amounts described
under (iv) and (v) 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 Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
21
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property (including REO Property)
the related Liquidation Proceeds net of related unreimbursed Advances, related
unreimbursed Servicing Advances, related unreimbursed Servicing Fees and any
other accrued and unpaid servicing fees received and retained in connection
with the liquidation of such Mortgage Loan or Mortgaged Property.
Net Prepayment Interest Shortfalls: As to any Distribution Date and Loan
Group, the amount of the aggregate of Prepayment Interest Shortfalls for such
Loan Group during the related Prepayment Period less any coverage of such
amounts provided from a portion of the Servicing Fee pursuant to Section 3.14
hereof.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or other amounts received with respect
to the related Mortgage Loan.
Nonrecoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not be ultimately recoverable by the Servicer
from the related Mortgagor, related Liquidation Proceeds or other amounts
received with respect to the related Mortgage Loan.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
OC Condition: As to each Loan Group and any Distribution Date prior to
the Senior Credit Support Depletion Date, an "OC Condition" shall exist if the
aggregate Class Certificate Balance of the Senior Certificates in the related
Senior Certificate Group is reduced to zero and either (i) if such
Distribution Date is prior to the Distribution Date in December 2004 and the
aggregate Class Certificate Balance of the Subordinated Certificates is less
than 50% of the Original Subordinate Principal Balance or (ii) if such
Distribution Date is on or after the Distribution Date in December 2004 and
the aggregate Class Certificate Balance of the Subordinated Certificates is
less than 25% of the Original Subordinate Principal Balance.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by (i) the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Servicer or (ii)
22
a Servicing Officer, as the case may be, and delivered to the Depositor and
the Trustee, as the case may be, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, including, in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Servicer, (ii) not have any
direct financial interest in the Depositor or the Servicer or in any affiliate
of either, and (iii) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the trust created hereunder in
connection with the purchase of the Mortgage Loans pursuant to Section 9.01(a)
hereof.
Original Applicable Credit Support Percentage: With respect to each of
the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
Class M 3.00%
Class B-1 1.95%
Class B-2 1.15%
Class B-3 0.60%
Class B-4 0.45%
Class B-5 0.30%
Original Mortgage Loan: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
Original Subordinate Principal Balance: The aggregate Class Certificate
Balance of the Subordinated Certificates as of the Closing Date.
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 Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero, which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
23
Ownership Interest: As to any Residual 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.
Par Price: With respect to the Auction Distribution Date, the sum of (i)
the Class Certificate Balance of the Class 3-A-1 Certificates after
application of all principal distributions and allocation of Realized Losses
on such Auction Distribution Date, and (ii) interest accrued on such Class
Certificate Balance from the first day of the month in which the Auction
Distribution Date occurs up to but excluding, the Auction Distribution Date at
the Pass-Through Rate for such Class for the immediately succeeding
Distribution Date.
Pass-Through Rate: For any interest bearing Class of Certificates, the
per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each
Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(iv) 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
24
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 Rating Agency for such securities, or
such lower ratings as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by either
Rating Agency;
(v) 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 (iv) above;
(vi) units of taxable money-market funds (which may be 12B-1 funds,
as contemplated under the rules promulgated by the Securities and
Exchange Commission under the Investment Company Act of 1940) which
funds have the highest rating available for such securities from the
Rating Agencies or which have been designated in writing by the
Rating Agencies as Permitted Investments;
(vii) such other relatively risk free investments 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 either Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency; and
(viii) an interest bearing demand cash account of The Bank of New
York denominated "BNY Cash Reserves", or if such account is no
longer available, obligations of the United States or any agency
thereof, provided such obligations are backed by the full faith and
credit of the United States;
provided, that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument.
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) which 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 Residual 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 created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate or
25
trust 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 trust
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form W-8EC1, or any applicable successor
for, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause the REMIC hereunder to fail to qualify as
a REMIC at any time that the 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, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificate: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances of the Mortgage Loans which were Outstanding
Mortgage Loans on the Due Date in the month preceding the month of such
Distribution Date.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage Loan
and Principal Prepayment received during the month preceding the month of such
Distribution Date, the amount, if any, by which one month's interest at the
related Adjusted Net Mortgage Rate on such Principal Prepayment exceeds the
amount of interest paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the calendar month
preceding the month in which such Distribution Date occurs.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Principal Amount: As to any Distribution Date and Loan Group, the sum of
(a) the principal portion of each Scheduled Payment (without giving effect to
any reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on each Mortgage Loan (other than a Liquidated Mortgage Loan)
in the related Loan Group on the related Due Date, (b) the Stated Principal
Balance of each Mortgage Loan in the related Loan Group that was repurchased
by a Transferor, the Seller or the Servicer pursuant to this Agreement as of
such Distribution Date, (c) the Substitution Adjustment Amount in connection
with any Deleted Mortgage Loan in such Loan Group received
26
with respect to such Distribution Date, (d) any Insurance Proceeds or Net
Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans in
the related Loan Group that are not yet Liquidated Mortgage Loans received
during the calendar month preceding the month of such Distribution Date, (e)
with respect to each Mortgage Loan in a Loan Group that became a Liquidated
Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of the Net Liquidation Proceeds allocable to
principal received during the calendar month preceding the month of such
Distribution Date with respect to such Mortgage Loan, (f) all Principal
Prepayments for such Loan Group received during the related Prepayment Period,
and (g) any Transfer Payments Received for such Loan Group less any Transfer
Payments Made for such Loan Group and Distribution Date.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Servicer in accordance with the
terms of the related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Senior Percentage: As to any Senior Certificate Group and
Distribution Date, the percentage equivalent of a fraction the numerator of
which is the aggregate of the Class Certificate Balances of each Class of
Senior Certificates of such Senior Certificate Group immediately prior to such
Distribution Date and the denominator of which is the aggregate of the Stated
Principal Balance of each Mortgage Loan in the related Loan Group as of the
Due Date in the month preceding the month of such Distribution Date; provided,
however, that on any Distribution Date after the second Senior Termination
Date, the Pro Rata Senior Percentage for the Senior Certificates of the
remaining Senior Certificate Group is the percentage equivalent of a fraction,
the numerator of which is the aggregate of the Class Certificate Balances of
each such Class of Senior Certificates immediately prior to such Distribution
Date and the denominator of which is the aggregate of the Class Certificate
Balances of all Classes of Certificates, immediately prior to such
Distribution Date. In no event will the Pro Rata Senior Percentage be greater
than 100%.
Pro Rata Subordinated Percentage: As to any Distribution Date and Loan
Group, 100% minus the related Pro Rata Senior Percentage for such Distribution
Date.
Pro Rata Share: As to any Distribution Date, the Subordinated Principal
Distribution Amount and any Class of Subordinated Certificates, the portion of
the Subordinated Principal Distribution Amount allocable to such Class, equal
to the product of the Subordinated Principal Distribution Amount on such
Distribution Date and a fraction, the numerator of which is the related Class
Certificate Balance thereof and the
27
denominator of which is the aggregate of the Class Certificate Balances of
the Subordinated Certificates.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
Prospectus Supplement: The Prospectus Supplement dated July 20, 2001
relating to the Offered Certificates.
PUD: Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller, a Transferor or the Servicer pursuant to Section 2.02
or 2.03 hereof or purchased at the option of the Servicer pursuant to Section
3.11, an amount equal to the sum of (i) 100% of the unpaid principal balance
of the Mortgage Loan on the date of such purchase, and (ii) accrued interest
thereon at the applicable Mortgage Rate (or at the applicable Adjusted Net
Mortgage Rate if (x) the purchaser is the Servicer or (y) if the purchaser is
the Seller and the Seller is the Servicer) from the date through which
interest was last paid by the Mortgagor to the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders.
Qualified Insurer: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of business and
each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and
to write the insurance provided by the insurance policy issued by it, approved
as a FNMA-approved mortgage insurer and having a claims paying ability rating
of at least "AA" or equivalent rating by a nationally recognized statistical
rating organization. Any replacement insurer with respect to a Mortgage Loan
must have at least as high a claims paying ability rating as the insurer it
replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is 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 Mortgage 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 the Liquidated Mortgage Loan as of the date of such liquidation,
plus (ii) interest at the Adjusted Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Net Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Net
Liquidation
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Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Adjusted Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan. With respect
to each Mortgage Loan which has become the subject of a Deficient Valuation,
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. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been 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 such
Distribution Date occurs.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month
is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation, revenue
ruling, revenue procedure or other official announcement or interpretation
relating to REMICs and the REMIC Provisions issued after the Closing Date.
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 regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release: The Request for Release submitted by the Servicer to
the Trustee, substantially in the form of Exhibits M and N, as appropriate.
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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.
Residual Certificates: As specified in the Preliminary Statement.
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.
Restricted Classes: As defined in Section 4.02(e).
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
which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due 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.
Senior Certificate Group: As specified in the Preliminary Statement.
Senior Certificates: As specified in the Preliminary Statement.
Senior Credit Support Depletion Date: The date on which the aggregate
Class Certificate Balance of the Subordinated Certificates has been reduced to
zero.
Senior Percentage: As to any Loan Group and Distribution Date occurring
before August 2011, 100%, except as described in the following sentence. As to
any Loan Group and Distribution Date occurring (i) before August 2011 but in
or after July 2004 on which the Two Times Test is satisfied, or (ii) in or
after August 2011, is the related Pro Rata Senior Percentage. If the Two Times
Test is satisfied prior to July 2004, the Senior Percentage for a Loan Group
is the related Pro Rata Senior Percentage plus 50% of the related Pro Rata
Subordinated Percentage.
Senior Prepayment Percentage: As to a Senior Certificate Group and any
Distribution Date during the ten years beginning on the first Distribution
Date, 100%. The related Senior Prepayment Percentage for any Distribution Date
occurring on or after the tenth anniversary of the first Distribution Date
will, except as provided herein, be as follows: for any Distribution Date in
the first year thereafter, the related Senior Percentage plus 70% of the
related Subordinated Percentage for such Distribution Date; for any
Distribution Date in the second year thereafter, the related Senior Percentage
plus 60% of the related Subordinated Percentage for such Distribution Date;
for any
30
Distribution Date in the third year thereafter, the related Senior
Percentage plus 40% of the related Subordinated Percentage for such
Distribution Date; for any Distribution Date in the fourth year thereafter,
the related Senior Percentage plus 20% of the related Subordinated Percentage
for such Distribution Date; and for any Distribution Date thereafter, the
related Senior Percentage for such Distribution Date (unless on any
Distribution Date the related Pro Rata Senior Percentage exceeds the initial
Pro Rata Senior Percentage of such Senior Certificate Group as of the Closing
Date, in which case the related Senior Prepayment Percentage for such
Distribution Date will once again equal 100%). Notwithstanding the foregoing,
no decrease in the Senior Prepayment Percentage will occur unless both of the
Senior Step Down Conditions are satisfied. Notwithstanding the foregoing, if
the Two Times Test is satisfied on a Distribution Date, the Senior Prepayment
Percentage for each Senior Certificate Group will equal the related Senior
Percentage.
Senior Principal Distribution Amount: As to any Distribution Date and
Senior Certificate Group, the sum of (i) the sum, not less than zero, of the
related Senior Percentage of all amounts described in clauses (a) through (d)
of the definition of "Principal Amount" with respect to the related Loan Group
for such Distribution Date, (ii) with respect to any Mortgage Loan in the
related Loan Group that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the lesser of (x) the
related Senior Percentage of the Stated Principal Balance of such Mortgage
Loan as of the Due Date in the month preceding the month of that Distribution
Date and (y) either (A) the related Senior Prepayment Percentage of the amount
of the Net Liquidation Proceeds allocable to principal received on the
Mortgage Loan, or (B) if an Excess Loss was sustained with respect to such
Liquidated Mortgage Loan during such prior calendar month, the related Senior
Percentage, of the amount of the Net Liquidation Proceeds allocable to
principal received with respect to such Mortgage Loan, (iii) the related
Senior Prepayment Percentage of the amounts described in clause (f) of the
definition of "Principal Amount" with respect to the related Loan Group for
such Distribution Date; and (iv) any Transfer Payments Received for that Loan
Group and Distribution Date; provided, however that if a Bankruptcy Loss that
is an Excess Loss is sustained with respect to a Mortgage Loan in the related
Loan Group that is not a Liquidated Mortgage Loan, the Senior Principal
Distribution Amount will be reduced on the related Distribution Date by the
related Senior Percentage of the principal portion of such Bankruptcy Loss;
provided further, however, on any Distribution Date after the second Senior
Termination Date, the Senior Principal Distribution Amount for the remaining
Senior Certificate Group will be calculated pursuant to the above formula
based on all the Mortgage Loans, as opposed to the Mortgage Loans in the
related Loan Group.
Senior Step Down Conditions: With respect to all the Mortgage Loans:
(i) the outstanding principal balance of all Mortgage Loans delinquent 60 days
or more (averaged over the preceding six month period), as a percentage of the
aggregate Class Certificate Balance of the Subordinated Certificates, does not
equal or exceed 50%, and (ii) cumulative Realized Losses on the Mortgage Loans
do not exceed: (a) for the Distribution Date on the tenth anniversary of the
first Distribution Date, 30% of the Original Subordinate Principal Balance,
(b) for the Distribution Date on the eleventh
31
anniversary of the first Distribution Date, 35% of the Original Subordinate
Principal Balance, (c) for the Distribution Date on the twelfth anniversary of
the first Distribution Date, 40% of the Original Subordinate Principal
Balance, (d) for the Distribution Date on the thirteenth anniversary of the
first Distribution Date, 45% of the Original Subordinate Principal Balance,
and (e) for the Distribution Date on the fourteenth anniversary of the first
Distribution Date, 50% of the Original Subordinate Principal Balance.
Senior Termination Date: For Senior Certificate Group 1, the Distribution
Date on which the aggregate Class Certificate Balance of the Loan Group 1
Senior Certificates has been reduced to zero. For Senior Certificate Group 2,
the Distribution Date on which the aggregate Class Certificate Balance of the
Loan Group 2 Senior Certificates has been reduced to zero. For Senior
Certificate Group 3, the Distribution Date on which the aggregate Class
Certificate Balances of the Loan Group 3 Senior Certificates has been reduced
to zero.
Servicer: Washington Mutual Bank, FA, a federally chartered savings
association, and its successors and assigns, in its capacity as servicer
hereunder; provided, that pursuant to pre-existing agreements under which
Washington Mutual Home Loans, Inc. is, as of the Closing Date, acting as
servicer for a portion of the Mortgage Loans, such servicing will be
transferred to Washington Mutual Bank, FA on or before July 31, 2001 and
Washington Mutual Home Loans, Inc. will service those Mortgage Loans on an
interim basis until and including that date.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.09.
Servicer Advance Date: The 18th day of each month, or if such day is not
a Business Day, the next succeeding Business Day, commencing in August 2001.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount payable out of each full payment of interest received on such Mortgage
Loan and equal to one-twelfth of the Servicing Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the Due Date in the month
preceding the month of such Distribution Date, subject to reduction as
provided in Section 3.14.
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Servicing Fee Rate: With respect to each Mortgage Loan, the rate per
annum identified on the Mortgage Loan Schedule; provided, however, that with
respect to those Mortgage Loans for which the servicing fee rate identified on
the Mortgage Loan Schedule is 0.50%, the Servicing Fee Rate shall be 0.50%
prior to the first interest rate adjustment date for such Mortgage Loan and
0.375% thereafter.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished
to the Trustee by the Servicer on the Closing Date pursuant to this Agreement,
as such list may from time to time be amended.
Special Hazard Coverage Termination Date: The point in time at which the
Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged Property
on account of direct physical loss but not including (i) any loss of a type
covered by a hazard insurance policy or a flood insurance policy required to
be maintained with respect to such Mortgaged Property pursuant to Section 3.09
to the extent of the amount of such loss covered thereby, or (ii) any loss
caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Servicer or any of their agents or employees (without regard
to any portion of the loss not covered by any errors and omissions
policy);
(c) errors in design, faulty workmanship or faulty materials, unless
the collapse of the property or a part thereof ensues and then only for
the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled, and
whether such loss be direct or indirect, proximate or remote or be in
whole or in part caused by, contributed to or aggravated by a peril
covered by the definition of the term "Special Hazard Loss;"
(e) hostile or warlike action in time of peace and war, including
action in hindering, combating or defending against an actual, impending
or expected attack:
1. by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air
forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under
quarantine or customs
33
regulations, confiscation by order of any government or public authority
or risks of contraband or illegal transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $17,481,118. With respect to any Distribution Date after
the first Distribution Date, the lesser of (a) the greatest of (i) 1% of the
aggregate of the principal balances of the Mortgage Loans, (ii) twice the
principal balance of the largest Mortgage Loan and (iii) the aggregate of the
principal balances of all Mortgage Loans secured by Mortgaged Properties
located in the single California postal zip code area having the highest
aggregate principal balance of any such zip code area and (b) the Special
Hazard Loss Coverage Amount as of the Closing Date less the amount, if any, of
Special Hazard Losses allocated to the Certificates since the Closing Date.
All principal balances for the purpose of this definition will be calculated
as of the first day of the calendar month preceding the month of such
Distribution Date after giving effect to Scheduled Payments on the Mortgage
Loans then due, whether or not paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
S&P: Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. If S&P is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to S&P
shall be Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Depositor and the Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Net Liquidation Proceeds allocable to principal
(other than with respect to any Liquidated Mortgage Loan) and to the payment
of principal due on such Due Date and irrespective of any delinquency in
payment by the related Mortgagor.
Streamlined Documentation Mortgage Loan: Any Mortgage Loan originated
pursuant to the streamlined documentation program of Washington Mutual Home
Loans, Inc. in effect at the time of such origination.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Percentage: As to any Distribution Date on or prior to the
second Senior Termination Date and Loan Group, 100% minus the Senior
Percentage for the Senior Certificate Group relating to such Loan Group for
such Distribution Date. As to
34
any Distribution Date after the second Senior Termination Date, 100% minus the
Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date and Loan
Group, 100% minus the related Senior Prepayment Percentage for such
Distribution Date.
Subordinated Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount equal to (A) the sum of (i) the
Subordinated Percentage of all amounts described in clauses (a) through (d) of
the definition of "Principal Amount" for such Loan Group and Distribution
Date, (ii) with respect to each Mortgage Loan in the related Loan Group that
became a Liquidated Mortgage Loan during the calendar month preceding the
month of such Distribution Date, the Net Liquidation Proceeds allocated to
principal received with respect thereto remaining after application thereof
pursuant to clause (ii) of the definition of Senior Principal Distribution
Amount, up to the Subordinated Percentage for such Loan Group of the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the month
preceding the month of such Distribution Date and (iii) the Subordinated
Prepayment Percentage of all amounts described in clause (f) of the definition
of "Principal Amount" for such Loan Group and Distribution Date, less (B) any
Transfer Payments Made for such Loan Group, provided, however, that if a
Bankruptcy Loss that is an Excess Loss is sustained on a Mortgage Loan that is
not a Liquidated Mortgage Loan, the Subordinated Principal Distribution Amount
will be reduced on the related Distribution Date by the Subordinated
Percentage of the principal portion of the Bankruptcy Loss; provided, however,
that on any Distribution Date after the second Senior Termination Date, the
Subordinated Principal Distribution Amount will not be calculated by Loan
Group but will equal the amount calculated pursuant to the formula set forth
above based on the applicable Subordinated Percentage and Subordinated
Prepayment Percentage for the Subordinated Certificates for such Distribution
Date with respect to all of the Mortgage Loans as opposed to the Mortgage
Loans in the related Loan Group.
Subservicer: Any person to whom the Servicer has contracted for the
servicing of all or a portion of the Mortgage Loans pursuant to Section 3.02
hereof.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller or
the Transferor 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 M, (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 more than 10% less than the Stated Principal Balance
of the Deleted Mortgage Loan; (ii) be accruing a maximum interest at a rate no
lower than and not more than 1% per annum higher than, that of the Deleted
Mortgage Loan; (iii) have a minimum interest specified in its related mortgage
note not more than 1% per annum higher or lower than the minimum mortgage rate
of the Deleted Mortgage Loan, (iv) have the same mortgage index and periodic
rate cap as the deleted mortgage loan and a gross margin not more than 1% per
annum higher or lower than that of the Deleted Mortgage Loan, (v)have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (vi)
have a remaining term to maturity no
35
greater than (and not more than one year less than that of) the Deleted
Mortgage Loan; (vii) not be a Cooperative Loan unless the Deleted Mortgage
Loan was a Cooperative Loan and (viii) comply with each representation and
warranty set forth in Section 2.03 hereof.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03.
Swap Contract: Collectively, the transactions evidenced by the
Confirmation And Agreement.
Swap Contract Counterparty: Greenwich Capital Derivatives, Inc.
Swap Proceeds Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Class 3-A-1 Certificateholders and designated "The Bank
of New York in trust for registered holders of CHL Mortgage Pass-Through Trust
2001-HYB1 Mortgage Pass-Through Certificates, Series 2001-HYB1, Class 3-A-1."
Funds in the Swap Proceeds Account shall be held in trust for the Class 3-A-1
Certificateholders for the uses and purposes set forth in this Agreement.
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 regulationss. 301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.05.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Payment Made: As to any Distribution Date prior to the Senior
Credit Support Depletion Date (as long as any Class of Senior Certificates is
still outstanding) and (a) a Loan Group with an OC Condition, the Principal
Amount (excluding clause (g) of that definition) for such Loan Group and
Distribution Date; or (b) a Loan Group if any other Loan Group has a UC
Condition, the Subordinated Principal Distribution Amount (excluding clause
(B) of that definition) for such Loan Group, up to the amount necessary to
eliminate the UC Condition in such other Loan Group or Loan Groups or (c) a
Loan Group with an OC Condition and any other Loan Group has a UC Condition,
the Principal Amount (excluding clause (g) of that definition) for such Loan
Group and Distribution Date.
Transfer Payment Received: As to any Distribution Date prior to the
Senior Credit Support Depletion Date (as long as any Class of Senior
Certificates is still outstanding) and (x) a Loan Group with an OC Condition,
zero, and (y) a Loan Group with a UC Condition or a Loan Group, if any other
Loan Group has an OC Condition, the amount of the Transfer Payment Made for
such Distribution Date by such other Loan Group or Loan Groups. If more than
one Loan Group is entitled to receive a transfer
36
payment pursuant to clause (y) of this definition of "Transfer Payment
Received," the related Transfer Payment Made shall be allocated between those
Loan Groups, pro rata, on the basis of the aggregate Class Certificate Balance
of the Class or Classes of Senior Certificates in the respective Senior
Certificate Groups related to those Loan Groups.
Transferor: Washington Mutual Bank, FA or Washington Mutual Home Loans,
Inc., as the context requires; provided, that the obligations and liability of
each Transferor under this Agreement are several and not joint, and neither
Transferor shall be responsible for the obligations of the other Transferor
under this Agreement or any prior or related agreements; and provided,
further,that each representation, warranty, indemnity and covenant made by one
Transferor under the Agreement or any prior or related agreements are made by,
or on behalf of, and with respect to such Transferor and not by the other
Transferor.
Transferor Mortgage Loan Purchase Agreements: The Mortgage Loan Purchase
and Sale Agreements, each dated as of June 1, 2001 between each Transferor and
the Seller.
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 after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Certificate Account, the
Distribution Account 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 Transferor Mortgage Loan Purchase
Agreements, (v) the Swap Contract and (vi) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing.
Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.
Trustee Fee: All income and gain net of any losses realized from any such
investment of funds on deposit in the Distribution Account.
Two Times Test: As to any Distribution Date, if (i) the Aggregate
Subordinated Percentage is at least two times the Aggregate Subordinated
Percentage as of the Closing Date, (ii) the outstanding aggregate Stated
Principal Balance of all Mortgage Loans delinquent 60 days or more (averaged
over the preceding six month period), as a percentage of the aggregate Class
Certificate Balance of the Subordinated Certificates, does not equal or exceed
50%and (ii) the cumulative Realized Losses on all the Mortgage Loans do not
exceed 30% of the Original Subordinate Principal Balance.
UC Condition: As to each Loan Group and any Distribution Date prior to
the Senior Credit Support Depletion Date, a "UC Condition" shall exist if the
aggregate Class Certificate Balance of the Senior Certificates in the related
Senior Certificate Group is greater than the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group.
37
Underwriter's Exemption: Prohibited Transaction Exemption 90-59,
Application No. D-8374, 55 Fed. Reg. 36724 (September 6, 1990) and Prohibited
Transaction Exemption 2000-55, as amended, Exemption Application No. D-10863,
65 Fed. Reg. 67774 (2000) (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of Labor.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, 100% of all Voting Rights shall be allocated among Holders of
the remaining Classes of Certificates in proportion to the Certificate
Balances of their respective Certificates on such date.
38
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans .
(a) The Seller, concurrently with the execution and delivery hereof,
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 (i) the Mortgage Loans, including all interest and principal
received or receivable by the Seller on or with respect to the Mortgage Loans
after the Cut-off Date and all interest and principal payments on the Mortgage
Loans received prior to the Cut-off Date in respect of installments of
interest and principal due thereafter, but not including payments of principal
and interest due and payable on the Mortgage Loans on or before the Cut-off
Date, and (ii) the Seller's rights under the Transferor Mortgage Loan Purchase
Agreement. On or prior to the Closing Date, the Seller shall deliver to the
Depositor or, at the Depositor's direction, to the Trustee or other designee
of the Depositor, the Mortgage File for each Mortgage Loan listed in the
Mortgage Loan Schedule. Such delivery of the Mortgage Files shall be made
against payment by the Depositor of the purchase price, previously agreed to
by the Seller and Depositor, for the Mortgage Loans. With respect to any
Mortgage Loan that does not have a first payment date on or before the Due
Date in the month of the first Distribution Date, the Seller shall deposit
into the Distribution Account on or before the Distribution Account Deposit
Date relating to the applicable Distribution Date, an amount equal to one
month's interest at the related Adjusted Net Mortgage Rate on the Cut-off Date
Principal Balance of such Mortgage Loan. On or prior to the first Distribution
Date, the Seller shall also cause to be deposited into the Distribution
Account the amount of $696,332.15.
(b) Immediately upon the conveyance of the Mortgage Loans referred
to in clause (a), the Depositor sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for the benefit of the Certificateholders,
without recourse, all the right, title and interest of the Depositor in and to
the Trust Fund together with the Depositor's right to require (i) the Seller
to cure any breach of a representation or warranty made herein by the Seller
or to repurchase or substitute for any affected Mortgage Loan in accordance
herewith and (ii) the Transferor to cure any breach of a representation or
warranty made in the Transferor Mortgage Loan Purchase Agreement or to
repurchase for any affected Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth in
clause (b) above, the Depositor has delivered or caused to be delivered to the
Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) (A) the original Mortgage Note endorsed by manual or
facsimile signature (including a xerographic copy of a manual
signature) in blank in the following form: "Pay to the order of
____________ without recourse," with
39
all intervening endorsements showing a complete chain of endorsement
from the originator to the Person endorsing the Mortgage Note (each
such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note); or
(B) with respect to any Lost Mortgage Note, a lost note
affidavit from the Seller stating that the original Mortgage Note
was lost or destroyed, together with a copy of such Mortgage Note;
(ii) except as provided below and for each Mortgage Loan that
is not a MERS Mortgage Loan, the original recorded Mortgage or a
copy of such Mortgage certified by the Seller as being a true and
complete copy of the Mortgage (or, in the case of a Mortgage for
which the related Mortgaged Property is located in the Commonwealth
of Puerto Rico, a true copy of the Mortgage certified as such by the
applicable notary) and in the case of each MERS Mortgage Loan, the
original Mortgage, noting the presence of the MIN of the Mortgage
Loans and either language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Mortgage Loan or if the Mortgage
Loan was not a MOM Mortgage Loan at origination, the original
Mortgage and the assignment thereof to MERS, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by
the public recording office in which such Mortgage has been
recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage (which may
be included in a blanket assignment or assignments), together with,
except as provided below, all interim recorded assignments of such
mortgage (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 the
assignment relates); provided that, if the related Mortgage has not
been returned from the applicable public recording office, such
assignment of the Mortgage may exclude the information to be
provided by the recording office; provided, further, that such
assignment of Mortgage need not be delivered in the case of a
Mortgage for which the related Mortgaged Property is located in the
Commonwealth of Puerto Rico; and
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause (and provide evidence to the
Trustee that it has done so), at the Seller's expense, the MERS(R) System to
indicate that such Mortgage Loans have been assigned by the Seller to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
40
which are repurchased in accordance with this Agreement) in such computer
files the information required by the MERS(R) System to identify the series of
the Certificates issued in connection with such Mortgage Loans. The Seller
further agrees that it will not, and will not permit the Servicer to, and the
Servicer agrees that it will not, alter the information referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the
terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not a MERS
Mortgage Loan the Depositor cannot deliver (a) the original recorded Mortgage
or (b) all interim recorded assignments satisfying the requirements of clause
(ii) or (iii) above, respectively, concurrently with the execution and
delivery hereof because such document or documents have not been returned from
the applicable public recording office in the case of clause (ii) or (iii)
above, the Depositor shall promptly deliver to the Trustee, in the case of
clause (ii) or (iii) above, such original Mortgage or such interim assignment,
as the case may be, with evidence of recording indicated thereon upon receipt
thereof from the public recording office, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery of the original Mortgage and each such interim assignment or a copy
thereof, certified, if appropriate, by the relevant recording office, be made
later than one year following the Closing Date; provided, however, in the
event the Depositor is unable to deliver by such date each Mortgage and each
such 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
such interim assignment, because the related Mortgage has not been returned by
the appropriate recording office, the Depositor shall deliver such documents
to the Trustee as promptly as possible upon receipt thereof and, in any event,
within 720 days following the Closing Date. The Depositor shall 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 Servicer
to the Trustee. In the event that the original Mortgage is not delivered and
in connection with the payment in full of the related Mortgage Loan and the
public recording office requires the presentation of a "lost instruments
affidavit and indemnity" or any equivalent document, because only a copy of
the Mortgage can be delivered with the instrument of satisfaction or
reconveyance, the Servicer shall execute and deliver or cause to be executed
and delivered such a document to the public recording office. In the case
where a public recording office retains the original recorded Mortgage or in
the case where a Mortgage is lost after recordation in a public recording
office, the Seller shall deliver to the Trustee a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the original recorded Mortgage.
As promptly as practicable subsequent to the Closing Date, and in any
event, within 30 days thereafter, the Servicer shall (except for any Mortgage
which has been recorded in the name of MERS or its designee) (I) cause each
Assignment of Mortgage to be in proper form for recording in the appropriate
public office for real property records and (II) at the Seller's expense,
cause to be delivered for recording in the appropriate public office for real
property records the Assignments of the Mortgages to the Trustee, except that,
with respect to any Assignment of a Mortgage as to which the Servicer has
41
not received the information required to prepare such assignment in recordable
form, the Servicer's obligation to do so and to deliver the same for such
recording shall be as soon as practicable after receipt of such information
and in any event within 30 days after the receipt thereof and, no recording of
an Assignment of Mortgage will be required in a state if either (i) the Seller
furnishes to the Trustee an unqualified Opinion of Counsel reasonably
acceptable to the Trustee to the effect that recordation of such assignment is
not necessary under applicable state law to preserve the Trustee's interest in
the related Mortgage Loan against the claim of any subsequent transferee of
such Mortgage Loan or any successor to, or creditor of, the Depositor or the
originator of such Mortgage Loan or (ii) the recordation of an Assignment of
Mortgage in such state is not required by either Rating Agency in order to
obtain the initial ratings on the Certificates on the Closing Date. As set
forth on Exhibit R attached hereto is a list of all states where recordation
is required by either Rating Agency to obtain the initial ratings of the
Certificates. The Trustee may rely and shall be protected in relying upon the
information contained in such Exhibit R.
In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee, will deposit in the Certificate Account the portion of such payment
that is required to be deposited in the Certificate Account pursuant to
Section 3.05 hereof.
(d) The Seller has entered into this Agreement in consideration for
the purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust
Fund not otherwise conveyed to the Trust Fund pursuant to Sections 2.01(a) or
(b).
(e) [Reserved].
(f) [Reserved].
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt of the documents identified in
the Initial Certification in the form annexed hereto as Exhibit F 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 as are included in the Trust Fund, in trust for the exclusive use
and benefit of all present and future Certificateholders. The Trustee
acknowledges that it will maintain possession of the Mortgage Notes in the
State of California, unless otherwise permitted by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Servicer and the Seller an Initial Certification in the form
annexed hereto as Exhibit F. Based on its review and examination, and only as
to the documents identified
42
in such Initial Certification, the Trustee acknowledges that such documents
appear regular on their face and relate to such Mortgage Loan. The Trustee
shall be under no duty or obligation to inspect, review or examine said
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 90 days after the Closing Date, the Trustee shall deliver
to the Depositor, the Servicer and the Seller a Final Certification with
respect to the Mortgage Loans in the form annexed hereto as Exhibit H, with
any applicable exceptions noted thereon.
If, in the course of such review, the Trustee finds any document
constituting a part of a Mortgage File which does not meet the requirements of
Section 2.01, the Trustee shall list such as an exception in the Final
Certification; provided, however that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The Seller shall
promptly correct or cure such defect 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) substitute for the
related Mortgage Loan a Substitute 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, however, that in no event shall such
substitution or purchase occur more than 540 days from the Closing Date,
except that if the substitution or purchase of a Mortgage Loan pursuant to
this provision is required by reason of a delay in delivery of any documents
by the appropriate recording office, and there is a dispute between either the
Servicer or the Seller and the Trustee over the location or status of the
recorded document, then such substitution or purchase shall occur within 720
days from the Closing Date. The Trustee shall deliver written notice to each
Rating Agency within 270 days from the Closing Date indicating each Mortgage
Loan (a) which has not been returned by the appropriate recording office or
(b) as to which there is a dispute as to location or status of such Mortgage
Loan. Such notice shall be delivered every 90 days thereafter until the
related Mortgage Loan is returned to the Trustee. Any such substitution
pursuant to (a) above or purchase 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, if any, 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 is
permitted to 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 on or prior to the Distribution
Account Deposit Date for the Distribution Date in the month following the
month of repurchase 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
43
and shall execute and deliver at the Seller's request such instruments of
transfer or assignment prepared by the Seller, 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. If pursuant to the
foregoing provisions the Seller repurchases an Mortgage Loan that is a MERS
Mortgage Loan, the Servicer shall either (i) cause MERS to execute and deliver
an assignment of the Mortgage in recordable form to transfer the Mortgage from
MERS to the Seller and shall cause such Mortgage to be removed from
registration on the MERS(R) System in accordance with MERS' rules and
regulations or (ii) cause MERS to designate on the MERS(R) System the Seller
as the beneficial holder of such Mortgage Loan.
(b) [Reserved].
(c) 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 Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File as come into the possession of the Servicer
from time to time.
(d) It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 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 Seller,
the Servicer and the Transferors.
(a) Countrywide Home Loans, Inc., as Seller, hereby makes the
representations and warranties set forth in Schedule II-A hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date.
(b) Washington Mutual Bank, FA, as Servicer, hereby makes the
representations and warranties set forth in Schedule II-B hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date.
(c) The Seller hereby makes the representations and warranties set
forth in Schedule III hereto, and by this reference incorporated herein, to
the Depositor and the Trustee, as of the Closing Date.
(d) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(c) or a breach of a
representation 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. The Seller hereby
covenants that within 90 days of the earlier of its discovery or its receipt
of written notice from any party of a breach of any representation or warranty
made pursuant to Section 2.03(b) which breach occurred during the Interim
44
Representation and Warranty Period and which 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 Substitute 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, however, that any
such substitution pursuant to (i) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof, if any, 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 and the Mortgage File for any
such Substitute Mortgage Loan. The Seller shall promptly reimburse the
Servicer and the Trustee for any expenses reasonably incurred by the Servicer
or the Trustee in respect of enforcing the remedies for such breach. With
respect to the representations and warranties described in this Section which
are made to the best of the Seller's knowledge, if it is discovered by either
the Depositor, 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 or the interests of
the Certificateholders therein, notwithstanding the Seller'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 Substitute Mortgage Loan or Loans, the Seller shall
deliver to the Trustee for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related 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 is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of substitution shall not be part of
the Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such month and thereafter the Seller shall be entitled to
retain all amounts received in respect of such Deleted Mortgage Loan. The
Servicer shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the substitution of the Substitute Mortgage Loan or Loans and the Servicer
shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Substitute Mortgage Loan or Loans shall be subject to-the
terms of this Agreement in all respects, and the Seller shall be deemed to
have made with respect to such Substitute Mortgage Loan or Loans, as of the
date of substitution, the representations and warranties made pursuant to
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 the Mortgage File held for the
benefit of the Certificateholders relating to such Deleted Mortgage Loan to
the Seller and shall execute
45
and deliver at the Seller's direction such instruments of transfer or
assignment prepared by the Seller, in each case without recourse, as shall be
necessary to vest title in the Seller, or its designee, 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 Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the month of substitution). The amount of such shortage (the "Substitution
Adjustment Amount") plus an amount equal to the aggregate of any unreimbursed
Advances with respect to such Deleted Mortgage Loans shall be deposited in the
Certificate Account by the Seller on or before the Distribution Account
Deposit Date for the Distribution Date in the month succeeding the calendar
month during which the related Mortgage Loan became required to be purchased
or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.05 on or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which the Seller
became obligated hereunder 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 and 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 Person, and the Trustee
shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Person to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and
is continuing shall constitute the sole remedy against such Persons respecting
such breach available to Certificateholders, the Depositor or the Trustee on
their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
(e) Each Transferor, severally and not jointly, hereby makes the
representations and warranties set forth in the related Transferor Mortgage
Loan Purchase Agreement with respect to the Mortgage Loans that were conveyed
thereunder, and by this reference incorporated herein, to the Depositor and
the Trustee, as of the dates specified in such Transferor Mortgage Loan
Purchase Agreement. Upon discovery by any of the parties hereto of a breach of
a representation or warranty therein 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 Transferor hereby covenants that within 90 days of the earlier of its
discovery or its receipt of written notice from any party of a breach of any
representation or warranty
46
made pursuant to the Transferor Mortgage Loan Purchase Agreement which
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan, it shall cure such breach or substitute for, or repurchase,
the affected Mortgage Loan in the manner set forth in paragraph (d) above.
The representations and warranties made pursuant to the Transferor
Mortgage Loan Purchase Agreements 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 as to the
Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with respect
to each Mortgage Loan as of the date hereof or such other date set forth
herein that 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, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 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 this Section 2.04
(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.
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or Section 2.03 shall be made more than
90 days after the Closing Date unless the Seller delivers to the Trustee an
Opinion of Counsel, which Opinion of Counsel shall not be at the expense of
either the Trustee or the Trust Fund, addressed to the Trustee, to the effect
that such substitution will not (i) result in the imposition of the tax on
"prohibited transactions" on the Trust Fund or contributions after the Startup
Day, as defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively,
or (ii) cause each REMIC created hereunder to fail to qualify as a REMIC at
any time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Servicer, or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering
such fact shall promptly (and in any event within five (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(c) with respect to
substitutions are satisfied, a Substitute Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such
47
discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty made pursuant to 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. Execution 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 and
delivered to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing directly or indirectly 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. REMIC Matters.
The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall
be the Closing Date. The "tax matters person" with respect to each REMIC
hereunder shall be the Trustee and the Trustee shall hold the Tax Matters
Person Certificate. Each REMIC's fiscal year shall be the calendar year.
SECTION 2.08. Covenants of the Servicer.
The Servicer hereby covenants to the Depositor and the Trustee that the
Servicer shall comply in the performance of its obligations under this
Agreement with all reasonable rules and requirements of the insurer under each
Required Insurance Policy.
48
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage
loan servicers. In connection with such servicing and administration, the
Servicer shall have full power and authority, acting alone and/or through
Subservicers as provided in Section 3.02 hereof, subject to the terms hereof
(i) to execute and deliver, on behalf of the Certificateholders and the
Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages (but only in the manner provided in this
Agreement), (iii) to collect any Insurance Proceeds and other Liquidation
Proceeds, and (iv) to effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property securing any Mortgage Loan; provided that
the Servicer shall not take any 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, the Trustee and the
Certificateholders under this Agreement. The Servicer shall represent and
protect the interests of the Trust Fund in the same manner as it protects its
own interests 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 Mortgage Loan which would cause any
REMIC created hereunder to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Servicer, in its own
name or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of
the Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of
the Certificateholders. The Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery
by either or both of them as are necessary or appropriate to enable the
Servicer to service and administer the Mortgage Loans to the extent that the
Servicer is not permitted to execute and deliver such documents pursuant to
the preceding sentence. Upon receipt of such documents, the Depositor and/or
the Trustee shall execute such documents and deliver them to the Servicer. The
Servicer further is authorized and empowered by the Trustee, on behalf of the
Certificateholders and the Trustee, in its own name or in the name of the
Subservicer, when the Servicer or the Subservicer, as the case may be,
believes it appropriate in its best judgment to register any Mortgage Loan on
the MERS(R) System, or cause the removal from the registration of any Mortgage
Loan on the MERS(R) System, to execute and deliver, on behalf of the Trustee
and the Certificateholders or any of them, any and all instruments of
assignment and other
49
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns.
In accordance with the standards of the preceding paragraph, the 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. The costs incurred by the Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balances of the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
SECTION 3.02. Subservicing; Enforcement of the Obligations of Servicers.
(a) The Servicer may arrange for the subservicing of any Mortgage
Loan by a Subservicer; provided, however, that such subservicing arrangement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Unless the context
otherwise requires, references in this Agreement to actions taken or to be
taken by the Servicer in servicing the Mortgage Loans include actions taken or
to be taken by a Subservicer on behalf of the Servicer. Notwithstanding the
provisions of any subservicing arrangement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and liable to the Depositor, the Trustee
and the Certificateholders for the servicing and administration of the
Mortgage Loans in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such subservicing
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. All actions of each
Subservicer performed pursuant to the related subservicing arrangement shall
be performed as an agent of the Servicer with the same force and effect as if
performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to the Servicer.
(c) Pursuant to pre-existing agreements executed in connection with
the Seller's acquisition of the Mortgage Loans pursuant to the Transferor
Mortgage Loan Purchase Agreements, Washington Mutual Home Loans, Inc. is, as
of the Closing Date, acting as servicer for a portion of the Mortgage Loans.
Such servicing will be transferred to Washington Mutual Bank, FA on or before
July 31, 2001. Such portion of Mortgage Loans will be serviced on an interim
basis by Washington Mutual Home Loans, Inc. until and including that date.
50
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.
The Depositor may, but is not obligated to, enforce the obligations of
the Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights
of the Servicer hereunder; provided that the Servicer shall not be relieved of
any of its obligations hereunder by virtue of such performance by the
Depositor or its designee. Neither the Trustee nor the Depositor shall have
any responsibility or liability for any action or failure to act by the
Servicer nor shall the Trustee or the Depositor be obligated to supervise the
performance of the Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee
or its successor shall thereupon assume all of the rights and obligations of
the Servicer hereunder arising thereafter (except that the Trustee shall not
be (i) liable for losses of the Servicer pursuant to Section 3.09 hereof or
any acts or omissions of the predecessor Servicer hereunder), (ii) obligated
to make Advances if it is prohibited from doing so by applicable law, (iii)
obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder including, but not limited to, repurchases or substitutions of
Mortgage Loans pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for
expenses of the Servicer pursuant to Section 2.03 or (v) deemed to have made
any representations and warranties of the Servicer hereunder). Any such
assumption shall be subject to Section 7.02 hereof. If the Servicer shall for
any reason no longer be the Servicer (including by reason of any Event of
Default), the Trustee or its successor shall succeed to any rights and
obligations of the Servicer under each subservicing agreement.
The Servicer shall, upon request of the Trustee, but at the expense of
the Servicer, deliver to the assuming party all documents and records relating
to each subservicing agreement or substitute subservicing agreement and the
Mortgage Loans then being serviced thereunder and an accounting of amounts
collected or held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the substitute subservicing agreement to the
assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; Swap Proceeds Account.
(a) The Servicer shall make reasonable efforts in accordance with the
customary and usual standards of practice of prudent mortgage servicers to
collect all payments called for under the terms and provisions of the Mortgage
Loans to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Servicer may in its discretion (i) waive
any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due
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dates for payments due on a Mortgage Note for a period not greater than 180
days; provided, however, that the Servicer cannot extend the maturity of any
such Mortgage Loan past the date on which the final payment is due on the
latest maturing Mortgage Loan as of the Cut-off Date. In the event of any such
arrangement, the Servicer shall make Advances on the related Mortgage Loan in
accordance with the provisions of Section 4.01 during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. The Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if
it reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Servicer shall establish and maintain a Certificate Account
into which the Servicer shall deposit or cause to be deposited no later than
two Business Days after 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 on
or before the Cut-off Date) and the following amounts required to be deposited
hereunder:
(i) all payments on account of principal on the Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net of the related Servicing Fee;
(iii) all Insurance Proceeds and Net 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 Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Servicer
pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the Servicer
pursuant to Section 3.09(b), 3.09(d), and in respect of net monthly
rental income from REO Property pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Servicer pursuant to Section
4.01; and
(viii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer 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,
52
if collected, need not be remitted by the Servicer. In the event that the
Servicer shall remit any amount not required to be remitted, 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 Trustee or such other institution
maintaining the Certificate Account which describes the amounts deposited in
error in the Certificate Account. The Servicer shall maintain adequate records
with respect to all withdrawals made pursuant to this Section. All funds
deposited in the Certificate Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08.
(c) [Reserved].
(d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Servicer or the Trustee
pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments; and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required to be
remitted, 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 an Officer's
Certificate to the Trustee which describes the amounts deposited in error in
the Distribution Account. All funds deposited in the Distribution Account
shall be held by the Trustee in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals
from the Distribution Account at the direction of the Servicer.
The Trustee shall also establish and maintain, on behalf of the Holders
of the Class 3-A-1 Certificates on the Auction Distribution Date, the Swap
Proceeds Account. The Trustee shall, promptly upon receipt, deposit in the
Swap Proceeds Account and retain therein the amounts described in Section
4.05.
(e) Each institution at which (i) the Certificate Account is
maintained shall invest the funds therein as directed in writing by the
Servicer in Permitted Investments, which shall mature not later than 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 account, then such Permitted Investment shall
mature not later than the Business Day next preceding such Distribution
53
Account Deposit Date) and (ii) the Distribution Account is maintained shall
invest the funds therein as directed in writing by the Trustee in Permitted
Investments, which mature not later than the Business Day next preceding the
Distribution Date (except that if such Permitted Investment is an obligation
of the institution that maintains such fund or account, 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; provided,
however, that so long as The Bank of New York is acting as trustee hereunder,
the Distribution Account shall be invested in the Permitted Investments
described in subsection (viii) of the definition of Permitted Investments. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income and gain net of any losses
realized from any such investment of funds on deposit in the Certificate
Account shall be for the benefit of the Servicer as servicing compensation and
shall be remitted to it monthly as provided herein, and all income and gain
net of any losses realized from any such investment of funds deposited in the
Distribution Account shall be for the benefit of the Trustee and shall be
remitted to it monthly as provided herein. The amount of any realized losses
in the Certificate Account or the Distribution Account incurred in any such
account in respect of any such investments shall promptly be deposited by the
Servicer in the Certificate Account or deposited by the Trustee in the
Distribution Account, as applicable.
(f) The Servicer shall give notice to the Trustee, the Seller, each
Rating Agency and the Depositor of any proposed change of the location of the
Certificate Account prior to any change thereof. The Trustee shall give notice
to the Servicer, the Seller, each Rating Agency and the Depositor of any
proposed change of the location of the Distribution Account prior to any
change thereof.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Servicer shall establish and maintain one or
more accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances by the Servicer) for the payment
of taxes, assessments, hazard insurance premiums or comparable items for the
account of the Mortgagors. Nothing herein shall require the Servicer to compel
a Mortgagor to establish an Escrow Account in violation of applicable law.
(b) 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 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 3.09 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums 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
54
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.
(c) The Servicer shall advance any payments referred to in Section
3.06(a) that are not timely paid by the Mortgagors on the date when the tax,
premium or other cost for which such payment is intended is due, but the
Servicer shall be required so to advance only to the extent that such advances
will not be Nonrecoverable Servicing Advances.
SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Servicer shall afford the Depositor and the Trustee reasonable access
to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information 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 office designated by the Servicer.
Upon reasonable advance notice in writing, the Servicer will provide to
each Certificateholder which 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 Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Servicer in providing
such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate Account and the
Distribution Account.
(a) The Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously
retained by the Servicer) the servicing compensation to which it is
entitled pursuant to Section 3.14, and to pay to the Servicer, as
additional servicing compensation, earnings on or investment income
with respect to funds in or credited to the Certificate Account;
(ii) to reimburse the Servicer for unreimbursed Advances made
by it, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on the Mortgage Loan(s) in respect
of which any such Advance was made;
(iii) to reimburse the Servicer for any Nonrecoverable Advance
or Nonrecoverable Servicing Advance previously made;
55
(iv) to reimburse the Servicer for Insured Expenses from the
related Insurance Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed Servicing
Advances, the Servicer's right to reimbursement pursuant to this
clause (a) with respect to any Mortgage Loan being limited to
amounts received on such Mortgage Loan(s) which represent late
recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.06 and (b) for unpaid
Servicing Fees as provided in Section 3.11 hereof;
(vi) to pay to the purchaser, with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received thereon
after the date of such purchase;
(vii) to reimburse the Seller, the Servicer or the Depositor
for expenses incurred by any of them and reimbursable pursuant to
Section 6.03 hereof;
(viii) to withdraw any amount deposited in the Certificate
Account and not required to be deposited therein;
(ix) on the Distribution Account Deposit Date, to withdraw an
amount equal to the related Available Funds for such Distribution
Date and wire at or before 11:00 AM Pacific time such amount to the
Trustee for deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Certificate Account pursuant to such subclauses (i), (ii), (iv), (v) and
(vi). Prior to making any withdrawal from the Certificate Account pursuant to
subclause (iii), the Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous
Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loans(s), and their respective portions of
such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account
for distributions to 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 withhold 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 itself earnings on or investment income with respect
to funds in the Distribution Account for the related Distribution Date;
56
(ii) to withdraw and return to the Servicer 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) [Reserved].
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The 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 or (ii) the greater of (y) the outstanding
principal balance of the Mortgage Loan and (z) 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. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. Any amounts collected by the Servicer under any
such policies (other than the amounts to be applied to the restoration or
repair of the related Mortgaged Property or amounts released to the Mortgagor
in accordance with the Servicer's normal servicing procedures) shall be
deposited in the Certificate Account. Any cost incurred by the Servicer in
maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
3.08 hereof. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special
flood hazard area and such area is participating in the national flood
insurance program, the Servicer shall cause flood insurance to be maintained
with respect to such Mortgage Loan. Such flood insurance shall be in an amount
equal to the least of (i) the original principal balance of the related
Mortgage Loan, (ii) the replacement value of the improvements which are part
of such Mortgaged Property, and (iii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood
insurance program.
(b) In the event that the 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, 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 Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a
policy
57
complying with the first sentence of this Section, 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 Servicer of the
Mortgage Loans, the 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.
(c) The Servicer shall not take any action which would result in
non-coverage under any applicable Primary Insurance Policy of any loss which,
but for the actions of the Servicer, would have been covered thereunder. The
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
that is in effect at the date of the initial issuance of the Certificates and
is required to be kept in force hereunder unless the replacement Primary
Insurance Policy for such canceled or non-renewed policy is maintained with a
Qualified Insurer.
The Servicer shall not be required to maintain any Primary Insurance
Policy (i) with respect to any Mortgage Loan with a Loan-to-Value Ratio less
than or equal to 80% as of any date of determination or, based on a new
appraisal, the principal balance of such Mortgage Loan represents 80% or less
of the new appraised value or (ii) if maintaining such Primary Insurance
Policy is prohibited by applicable law.
The Servicer agrees to effect the timely payment of the premiums on each
Primary Insurance Policy, and such costs not otherwise recoverable shall be
recoverable by the Servicer from the related Liquidation Proceeds.
(d) In connection with its activities as Servicer of the Mortgage
Loans, the Servicer agrees to present on behalf of itself, the Trustee and
Certificateholders, claims to the insurer under any Primary Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Insurance Policies respecting defaulted
Mortgage Loans. Any amounts collected by the Servicer under any Primary
Insurance Policies shall be deposited in the Certificate Account.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Servicer shall
to the extent that it has knowledge of such conveyance, enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the
Servicer is not required to exercise such rights with respect to a Mortgage
Loan if the Person to whom the related Mortgaged Property has been conveyed or
is proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that
the Servicer is
58
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.10(b), to take or enter into an assumption and
modification agreement from or with the person to whom such property has been
or is about to be conveyed, pursuant to which such person becomes liable under
the Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan shall
continue to be covered (if so covered before the Servicer enters such
agreement) by the applicable Required Insurance Policies. The Servicer,
subject to Section 3.10(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
Servicer shall not be deemed to be in default under this Section by reason of
any transfer or assumption which the Servicer reasonably believes it is
restricted by law from preventing, for any reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.10(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Servicer
shall prepare and deliver or cause to be prepared and delivered to the Trustee
for signature and shall direct, in writing, the Trustee to execute the
assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In connection with any such assumption, no material
term of the Mortgage Note may be changed. In addition, the substitute
Mortgagor and the Mortgaged Property must be acceptable to the Servicer in
accordance with its underwriting standards as then in effect. Together with
each such substitution, assumption or other agreement or instrument delivered
to the Trustee for execution by it, the Servicer shall deliver an Officer's
Certificate signed by a Servicing Officer stating that the requirements of
this subsection have been met in connection therewith. The Servicer shall
notify the Trustee that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original of such substitution or
assumption agreement, which in the case of the original shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Servicer for entering
into an assumption or substitution of liability agreement will be retained by
the Servicer as additional servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.
59
The Servicer shall use reasonable efforts to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall
be normal and usual in its general mortgage servicing activities and meet the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement
to itself of such expenses and (ii) that such expenses will be recoverable to
it through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate Account). The Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the Liquidation Proceeds with respect to the related Mortgaged
Property, as provided in the definition of Liquidation Proceeds. If the
Servicer has knowledge that a Mortgaged Property which the Servicer is
contemplating acquiring in foreclosure or by deed in lieu of foreclosure is
located within a 1 mile radius of any site listed in the Expenditure Plan for
the Hazardous Substance Clean Up Bond Act of 1984 or other site with
environmental or hazardous waste risks known to the Servicer, the Servicer
will, prior to acquiring the Mortgaged Property, consider such risks and only
take action in accordance with its established environmental review
procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's name shall
be placed on the title to such REO Property solely as the Trustee hereunder
and not in its individual capacity. The Servicer shall ensure that the title
to such REO Property references the Pooling and Servicing Agreement and the
Trustee's capacity thereunder. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems
to be in the best interest of the Certificateholders for the period prior to
the sale of such REO Property. The Servicer shall prepare for and deliver to
the Trustee a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the maintenance of such REO Property at such times as is
necessary to enable the Trustee to comply with the reporting requirements of
the REMIC Provisions. The net monthly rental income, if any, from such REO
Property shall be deposited in the Certificate Account no later than the close
of business on each Determination Date. The Servicer shall perform the tax
reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by
Section 6050H of the Code with respect to the receipt of mortgage interest
from individuals and any tax reporting required by Section 6050P of the Code
with
60
respect to the cancellation of indebtedness by certain financial
entities, by preparing such tax and information returns as may be required, in
the form required, and delivering the same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property as soon
as practicable in a manner that maximizes the Liquidation Proceeds thereof,
but in no event later than three years after its acquisition by the Trust
Fund. In that event, the Trustee shall have been supplied with an Opinion of
Counsel to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to a three-year period, if applicable, will not result in
the imposition of taxes on "prohibited transactions" of any REMIC hereunder as
defined in section 860F of the Code or cause any REMIC hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding, the
Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel) after the expiration of such
three-year period. Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC
hereunder to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under Section 860G(c) of the Code
or otherwise, unless the Servicer has agreed to indemnify and hold harmless
the Trust Fund with respect to the imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of whose obligor
is not a United States Person, as that term is defined in Section 7701(a)(30)
of the Code, in connection with any foreclosure or acquisition of a deed in
lieu of foreclosure (together, "foreclosure") in respect of such Mortgage
Loan, the Servicer will cause compliance with the provisions of Treasury
Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary to
assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on such Mortgage Loan.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any REO Properties, net of
reimbursement to the Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of unreimbursed
Servicing Fees, Advances and Servicing Advances, shall be deposited into the
Certificate Account. To the extent the net income received during any calendar
month is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related Mortgage Loan for
such calendar month, such excess shall be considered to be a partial
prepayment of principal of the related Mortgage Loan.
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The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and Servicing Fees; second, to reimburse the Servicer for
any unreimbursed Advances; third, to reimburse the Certificate Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn
by the Servicer pursuant to Section 3.08(a)(iii) that related to such Mortgage
Loan; fourth, to accrued and unpaid interest (to the extent no Advance has
been made for such amount or any such Advance has been reimbursed) on the
Mortgage Loan or related REO Property, at the Adjusted Net Mortgage Rate to
the Due Date occurring in the month in which such amounts are required to be
distributed; and fifth, as a recovery of principal of the Mortgage Loan.
Excess Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan
will be retained by the Servicer as additional servicing compensation pursuant
to Section 3.14.
The Servicer, in its sole discretion, shall have the right to purchase
for its own account from the Trust Fund any Mortgage Loan which is 91 days or
more delinquent at a price equal to the Purchase Price; provided, that such
right to repurchase shall expire as of the last day of the calendar quarter
during which such Mortgage Loan became 91 days delinquent. The Purchase Price
for any Mortgage Loan purchased hereunder shall be deposited in the
Certificate Account and the Trustee, upon receipt of a certificate from the
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 3.12. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee
by delivering, or causing to be delivered a "Request for Release"
substantially in the form of Exhibit N. Upon receipt of such request, the
Trustee shall promptly release the related Mortgage File to the Servicer, and
the Trustee shall at the Servicer's written direction execute and deliver to
the Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. The Servicer is authorized to cause
the removal from the registration on the MERS System of such Mortgage and to
execute and deliver, on behalf of the Trustee and the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation or of
partial or full release. Expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the related
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Mortgagor. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose, collection under
any policy of flood insurance, any fidelity bond or errors or omissions
policy, or for the purposes of effecting a partial release of any Mortgaged
Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the Trustee shall, upon delivery to the Trustee of a Request
for Release in the form of Exhibit M signed by a Servicing Officer, release
the Mortgage File to the Servicer. Subject to the further limitations set
forth below, the Servicer shall cause the Mortgage File or documents so
released to be returned to the Trustee when the need therefor by the Servicer
no longer exists, unless the Mortgage Loan is liquidated and the proceeds
thereof are deposited in the Certificate Account, in which case the Servicer
shall deliver to the Trustee a Request for Release in the form of Exhibit N,
signed by a Servicing Officer.
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the
Servicer shall deliver or cause to be delivered to the Trustee, for signature,
as appropriate, any court pleadings, requests for trustee's sale or other
documents necessary to effectuate such foreclosure or any legal action brought
to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage
or to obtain a deficiency judgment or to enforce any other remedies or rights
provided by the Mortgage Note or the Mortgage or otherwise available at law or
in equity.
SECTION 3.13. Documents Records and Funds in Possession of Servicer to be
Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Servicer from time to time and shall account fully to the Trustee for any
funds received by the Servicer or which otherwise are collected by the
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 Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Certificate Account,
shall be held by the Servicer for and on behalf of the Trustee and shall be
and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. The Servicer also agrees that it
shall not create, incur or subject any Mortgage File or any funds that are
deposited in the Certificate Account, Distribution Account or any Escrow
Account, 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 setoff against any
Mortgage File or any funds collected on, or in connection with, a Mortgage
Loan, except, however, that the Servicer shall be entitled to set off against
and deduct from any such funds any amounts that are properly due and payable
to the Servicer under this Agreement.
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SECTION 3.14. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Certificate Account an amount equal to
the Servicing Fee for each Mortgage Loan, provided that the aggregate
Servicing Fee with respect to any Distribution Date shall be reduced by an
amount equal to the lesser of (i) the aggregate of the Prepayment Interest
Shortfalls, if any, with respect to such Distribution Date, and (ii) that
portion of the aggregate Servicing Fee equal to the Compensating Interest Cap.
Additional servicing compensation in the form of Excess Proceeds,
prepayment penalties, assumption fees, late payment charges and all income and
gain net of any losses realized from Permitted Investments of Funds in the
Certificate Account shall be retained by the Servicer to the extent not
required to be deposited in the Certificate Account pursuant to Section 3.05
hereof. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including payment of any
premiums for hazard insurance and any Primary Insurance Policy and maintenance
of the other forms of insurance coverage required by this Agreement) and shall
not be entitled to reimbursement therefor except as specifically provided in
this Agreement.
SECTION 3.15. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinated 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 designated by the Servicer.
Nothing in this Section shall limit the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
SECTION 3.16. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor and the Trustee on or before
120 days after the end of the Servicer's fiscal year, commencing with its 2002
fiscal year, an Officer's Certificate stating, as to the signer thereof, that
(i) a review of the activities of the Servicer during the preceding calendar
year and of the performance of the Servicer under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. The Trustee
shall forward a copy of each such statement to each Rating Agency.
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SECTION 3.17. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
On or before 120 days after the end of the Servicer's fiscal year,
commencing with its 2002 fiscal year, the Servicer at its expense shall cause
a nationally or regionally recognized firm of independent public accountants
(who may also render other services to the Servicer, the Seller or any
affiliate thereof) which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee and the Depositor to
the effect that such firm has examined certain documents and records relating
to the servicing of the Mortgage Loans under this Agreement or of mortgage
loans under pooling and servicing agreements substantially similar to this
Agreement (such statement to have attached thereto a schedule setting forth
the pooling and servicing agreements covered thereby) and that, on the basis
of such examination, conducted substantially in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FNMA and FHLMC, such servicing has been conducted in
compliance with such pooling and servicing agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FNMA and FHLMC requires it to report. In
rendering such statement, such firm may rely, as to matters relating to direct
servicing of mortgage loans by Subservicers, upon comparable statements for
examinations conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FNMA and FHLMC (rendered within one year of such statement) of
independent public accountants with respect to the related Subservicer. Copies
of such statement shall be provided by the Trustee to any Certificateholder
upon request at the Servicer's expense, provided that such statement is
delivered by the Servicer to the Trustee.
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as
Servicer hereunder and (b) a fidelity bond in respect of its 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 Servicer shall
obtain a comparable replacement policy or bond from an insurer or issuer,
meeting the requirements set forth above as of the date of such replacement.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01. Advances.
The Servicer shall determine on or before each Servicer Advance Date
whether it is required to make an Advance pursuant to the definition thereof.
If the Servicer determines it is required to make an Advance, it shall, on or
before the Servicer Advance Date, either (i) deposit into the Certificate
Account an amount equal to the Advance or (ii) make an appropriate entry in
its records relating to the Certificate Account that any Amount Held for
Future Distribution has been used by the Servicer in discharge of its
obligation to make any such Advance. Any funds so applied shall be replaced by
the Servicer by deposit in the Certificate Account no later than the close of
business on the next Servicer Advance Date. The Servicer shall be entitled to
be reimbursed from the Certificate Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue if such
Mortgage Loan has been foreclosed or otherwise terminated and the related
Mortgaged Property has not been liquidated.
The Servicer shall deliver to the Trustee on the related Servicer Advance
Date an Officer's Certificate of a Servicing Officer indicating the amount of
any proposed Advance determined by the Servicer to be a Nonrecoverable
Advance.
SECTION 4.02. Priorities of Distribution.
(a) (1) With respect to the Available Funds for Loan Group 1, on each
Distribution Date, the Trustee shall withdraw such Available Funds from the
Distribution Account and apply such funds to distributions on the specified
Classes of Loan Group 1 Senior Certificates in the following order and
priority and, in each case, to the extent of such funds remaining:
(i) [Reserved];
(ii) to each Class of Loan Group 1 Senior Certificates, an
amount allocable to interest equal to the related Class Optimal
Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal
Interest Distribution Amount that would have been distributed in the
absence of such shortfall;
(iii) [Reserved];
(iv) to each Class of Loan Group 1 Senior Certificates,
concurrently as follows:
(x) [reserved]; and
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(y) the related Principal Amount, up
to the amount of the Senior Principal
Distribution Amount for Loan Group 1 for such
Distribution Date will be distributed, in the
following order of priority:
(1) to the Class A-R Certificates, until its Class Certificate
Balance is reduced to zero; and
(2) to the Class 1-A-1 Certificates, until its Class Certificate
Balance is reduced to zero;
(v) [reserved];
(2) With respect to the Available Funds for Loan Group 2, on each
Distribution Date, the Trustee shall withdraw such Available Funds from the
Distribution Account and apply such funds to distributions on the specified
Classes of Loan Group 2 Senior Certificates in the following order and
priority and, in each case, to the extent of such funds remaining:
(i) [Reserved];
(ii) to each Class of Loan Group 2 Senior Certificates, an
amount allocable to interest equal to the related Class Optimal
Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal
Interest Distribution Amount that would have been distributed in the
absence of such shortfall;
(iii) [Reserved];
(iv) to each Class of Loan Group 2 Senior Certificates,
concurrently as follows:
(x) [reserved]; and
(y) the related Principal Amount, up
to the amount of the Senior Principal
Distribution Amount for Loan Group 2 for such
Distribution Date, will be distributed, to the
Class 2-A-1 Certificates, until its Class
Certificate Balance is reduced to zero;
(v) [reserved];
(3) With respect to the Available Funds for Loan Group 3, on each
Distribution Date, the Trustee shall withdraw such Available Funds from
the Distribution Account and apply such funds to distributions on the
specified Classes of Loan Group 3 Senior Certificates in the following
order and priority and, in each case, to the extent of such funds
remaining:
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(i) [Reserved];
(ii) to each Class of Loan Group 3 Senior Certificates, an
amount allocable to interest equal to the related Class Optimal
Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal
Interest Distribution Amount that would have been distributed in the
absence of such shortfall;
(iii) [Reserved];
(iv) to each Class of Loan Group 3 Senior Certificates,
concurrently as follows:
(x) [Reserved]; and
(y) the related Principal Amount, up
to the amount of the Senior Principal
Distribution Amount for Loan Group 3 for such
Distribution Date, will be distributed, to the
Class 3-A-1 and Class 3-A-2 Certificates, pro
rata (based on their respective Class
Certificate Balances), until their respective
Class Certificate Balances are reduced to zero;
(4) On each Distribution Date, Available Funds from all Loan Groups
remaining after making the distributions described in 4.02(a)(1),
4.02(a)(2) and 4.02(a)(3) above, will be distributed to the Senior
Certificates to the extent of any shortfalls remaining in the amounts
to be distributed pursuant to 4.02(a)(1), 4.02(a)(2) and 4.02(a)(3).
(5) On each Distribution Date, Available Funds from all Loan Groups
remaining after making the distributions described in 4.02(a)(1),
4.02(a)(2), 4.02(a)(3) and 4.02(a)(4) above, will be distributed to
the Subordinated Certificates and the Class A-R Certificates in the
following order and priority and, in each case, to the extent of such
funds remaining:
(A) to the Class M Certificates, an
amount allocable to interest equal to the Class
Optimal Interest Distribution Amount for such
Class for such Distribution Date;
(B) to the Class M Certificates, an
amount allocable to principal equal to its Pro
Rata Share for such Distribution Date until the
Class Certificate Balance thereof is reduced to
zero;
(C) to the Class B-1 Certificates, an
amount allocable to interest equal to the Class
Optimal Interest Distribution Amount for such
Class for such Distribution Date;
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(D) to the Class B-1 Certificates, an
amount allocable to principal equal to its Pro
Rata Share for such Distribution Date until the
Class Certificate Balance thereof is reduced to
zero;
(E) to the Class B-2 Certificates, an
amount allocable to interest equal to the Class
Optimal Interest Distribution Amount for such
Class for such Distribution Date;
(F) to the Class B-2 Certificates, an
amount allocable to principal equal to its Pro
Rata Share for such Distribution Date until the
Class Certificate Balance thereof is reduced to
zero;
(G) to the Class B-3 Certificates, an
amount allocable to interest equal to the amount
of the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(H) to the Class B-3 Certificates, an
amount allocable to principal equal to its Pro
Rata Share for such Distribution Date until the
Class Certificate Balance thereof is reduced to
zero;
(I) to the Class B-4 Certificates, an
amount allocable to interest equal to the amount
of the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(J) to the Class B-4 Certificates, an
amount allocable to principal equal to its Pro
Rata Share for such Distribution Date until the
Class Certificate Balance thereof is reduced to
zero;
(K) to the Class B-5 Certificates, an
amount allocable to interest equal to the Class
Optimal Interest Distribution Amount for such
Class for such Distribution Date; and
(L) to the Class B-5 Certificates, an
amount allocable to principal equal to its Pro
Rata Share for such Distribution Date until the
Class Certificate Balance thereof is reduced to
zero;
(6) [Reserved]; and
(7) to the Class A-R Certificates, any remaining funds.
(b) [Reserved].
(c) [Reserved].
(d) On each Distribution Date, the amount referred to in clause
(i) of the definition of Class Optimal Interest Distribution Amount for
each Class of Certificates for such Distribution Date shall be reduced
for each Class of Senior Certificates of a Senior Certificate Group and
each Class of Subordinated Certificates for
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such Distribution Date shall be reduced with respect to each related Loan
Group by (i) the related Class' pro rata share of Net Prepayment Interest
Shortfalls for such Loan Group based (x) with respect to a Class of Senior
Certificates, the related Class Optimal Interest Distribution Amount and (y)
with respect to a Class of Subordinated Certificates on and prior to the
second Senior Termination Date, the Assumed Interest Amount or after such
second Senior Termination Date, the related Class Optimal Interest
Distribution Amount and (ii) the related Class' Allocable Share of (A) after
the Special Hazard Coverage Termination Date, with respect to each Mortgage
Loan in the related Loan Group (or after the Senior Credit Support Depletion
Date, any Mortgage Loan) that became a Special Hazard Mortgage Loan during the
calendar month preceding the month of such Distribution Date, the excess of
one month's interest at the related Adjusted Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date in such month over
the amount of Net Liquidation Proceeds applied as interest on such Mortgage
Loan with respect to such month, (B) after the Bankruptcy Coverage Termination
Date, with respect to each Mortgage Loan in the related Loan Group (or after
the Senior Credit Support Depletion Date, any Mortgage Loan) that became
subject to a Bankruptcy Loss during the calendar month preceding the month of
such Distribution Date, the interest portion of the related Debt Service
Reduction or Deficient Valuation, (C) each Relief Act Reduction for the
Mortgage Loans in the related Loan Group (or after the Senior Credit Support
Depletion Date, any Mortgage Loan) incurred during the calendar month
preceding the month of such Distribution Date and (D) after the Fraud Coverage
Termination Date, with respect to each Mortgage Loan in the related Loan Group
(or after the Senior Credit Support Depletion Date, any Mortgage Loan) that
became a Fraud Loan during the calendar month preceding the month of such
Distribution Date, the excess of one month's interest at the related Adjusted
Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of
the Due Date in such month over the amount of Net Liquidation Proceeds applied
as interest on such Mortgage Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in Section
4.02(a)(5), if with respect to any Class of Subordinated Certificates on any
Distribution Date the sum of the related Class Subordination Percentages of
such Class and of all Classes of Subordinated Certificates which have a higher
numerical Class designation than such Class (the "Applicable Credit Support
Percentage") is less than the Original Applicable Credit Support Percentage
for such Class, no distribution of Principal Prepayments will be made to any
such Classes (the "Restricted Classes") and the amount of such Principal
Prepayments otherwise distributable to the Restricted Classes shall be
distributed to any Classes of Subordinated Certificates having lower numerical
Class designations than such Class, pro rata, based on their respective Class
Certificate Balances immediately prior to such Distribution Date and shall be
distributed in the sequential order provided in Section 4.02(a)(5). For
purposes of this Agreement, the Class M Certificates will be deemed to have
the lowest numerical Class designation of any Class of Subordinated
Certificates.
SECTION 4.03. [Reserved].
SECTION 4.04. Allocation of Realized Losses.
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(a) On or prior to each Determination Date, the Trustee shall
determine the total amount of Realized Losses, including Excess Losses, with
respect to the related Distribution Date. For purposes of allocating losses to
the Subordinated Certificates, the Class M Certificates will be deemed to have
a lower numerical class designation, and to be of a higher relative payment
priority, than each other Class of Subordinated Certificates.
Realized Losses with respect to any Distribution Date shall be allocated
as follows:
(i) [reserved]; and
(ii) (1) any Realized Loss (other than an Excess Loss) in a
Loan Group shall be allocated first to the Subordinated Certificates
in reverse order of their respective numerical Class designations
(beginning with the Class of Subordinated Certificates then
outstanding with the highest numerical Class designation) until the
respective Class Certificate Balance of each such Class is reduced
to zero, and second to the Senior Certificates related to such Loan
Group, pro rata, on the basis of their respective Class Certificate
Balances immediately prior to the related Distribution Date until
the respective Class Certificate Balance of each such Class has been
reduced to zero; and
(2) any Excess Losses on the Mortgage Loans in a Loan Group
shall be allocated to the Classes of Senior Certificates of the
related Senior Certificate Group and the Subordinated Certificates
then outstanding, pro rata, on the basis of, with respect to such
Senior Certificates, their respective Class Certificate Balances
immediately prior to the related Distribution Date and, with respect
to each Class of Subordinated Certificates, the applicable Assumed
Balance immediately prior to the related Distribution Date for each
such Class relating to the Loan Group in which such Excess Loss
occurs; provided, however, on any Distribution Date after the second
Senior Termination Date for a Senior Certificate Group, such Excess
Losses on the Mortgage Loans in the related Loan Group will be
allocated to the Senior Certificates and the Subordinated
Certificates on the basis of their respective Class Certificate
Balances immediately prior to the related Distribution Date.
(b) The Class Certificate Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class designation
shall be reduced on each Distribution Date by the amount, if any, by which the
aggregate of the Class Certificate Balances of all outstanding Classes of
Certificates (after giving effect to the distribution of principal and the
allocation of Realized Losses on such Distribution Date) exceeds the aggregate
Stated Principal Balance of the Mortgage Loans as of the Due Date in the month
of such Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Certificate Balance of a Class of Certificates pursuant
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to Section 4.04(a) or 4.04(b) above shall be allocated among the Certificates
of such Class in proportion to their respective Certificate Balances.
(d) Any allocation of Realized Losses to a Certificate or any
reduction in the Certificate Balance of a Certificate, pursuant to Section
4.04(a) or 4.04(b) above shall be accomplished by reducing the Certificate
Balance thereof, as applicable, immediately following the distributions made
on the related Distribution Date in accordance with the definition of
"Certificate Balance".
(e) [Reserved]
SECTION 4.05. Swap Agreement; Mandatory Auction of the Class 3-A-1
Certificates.
On or before the Closing Date, the Trustee and the Swap Contract
Counterparty entered into the Swap Contract. The Swap Contract and any
proceeds thereof will be an asset of the Trust Fund but neither will be an
asset of any REMIC. The Trustee shall deposit any amounts received with
respect to the Swap Contract, but not more than the excess, if any, of the Par
Price over the Auction Price, into the Swap Proceeds Account to be held for
the benefit of the Class 3-A-1 Certificateholders.
On the fifth Business Day preceding the Auction Distribution Date, the
Trustee (in such capacity, the "Auction Administrator") will contact at least
three nationally recognized broker-dealers, including the Underwriters, and
will solicit bids for the purchase of the Class 3-A-1 Certificates. The
Auction Administrator will sell the Class 3-A-1 Certificates to the investor
which presents the highest bid. On the Auction Distribution Date, the Holders
of the Class 3-A-1 Certificates will tender their Certificates to the Auction
Administrator, and the Auction Administrator will distribute the Par Price (to
the extent received from the winning bidder and the Swap Contract
Counterparty) to the Holders of the Class 3-A-1 Certificates. On the Auction
Distribution Date, pursuant to the Swap Contract the Auction Administrator
will distribute to the Swap Contract Counterparty the excess, if any, of the
Auction Price over the Par Price.
SECTION 4.06. 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
Certificateholder, the Servicer, the Depositor and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Net Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Class Unpaid
Interest Amounts included in such distribution and any remaining
Class Unpaid Interest Amounts after giving effect to such
distribution;
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(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall and the allocation
thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of principal on
such Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the Senior Percentage and Subordinated Percentage for the
following Distribution Date;
(vii) the amount of the Servicing Fees paid to or retained by
the Servicer with respect to such Distribution Date;
(viii) the Pass-Through Rate for each such Class of
Certificates with respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on
such Distribution Date and the aggregate amount of Advances
outstanding as of the close of business on such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage
Loans (A) delinquent (exclusive of Mortgage Loans in foreclosure)
(1) 1 to 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) 1 to 30 days (2)
31 to 60 days (3) 61 to 90 days and (4) 91 or more days, as of the
close of business on the last day of the calendar month preceding
such Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan as of the close of
business on the Determination Date preceding such Distribution Date
and the date of acquisition thereof;
(xii) the total number and principal balance of any REO
Properties (and market value, if available) as of the close of
business on the Determination Date preceding such Distribution Date;
(xiii) the Senior Prepayment Percentage and Subordinated
Prepayment Percentage for the following Distribution Date;
(xiv) the aggregate amount of Realized Losses incurred during
the preceding calendar month;
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(xv) the Special Hazard Loss Coverage Amount, the Fraud Loss
Coverage Amount and the Bankruptcy Loss Coverage Amount, in each
case as of the related Determination Date; and
(xvi) [reserved].
The Trustee may make the above information available to Certificateholders via
the Trustee's website at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇.▇▇▇.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information provided by the Servicer.
(c) On or before the fifth Business Day following the end of each
Prepayment Period (but in no event later than the third Business Day prior to
the related Distribution Date), the Servicer shall deliver to the Trustee
(which delivery may be by electronic data transmission) a report in
substantially the form set forth as Schedule V hereto. The Trustee shall
deliver such report monthly to Bloomberg Financial Markets, Inc. and Mortgage
Information Corporation in a format acceptable to such parties.
(d) 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)(vii)
of this Section 4.06 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.
SECTION 4.07. [Reserved].
SECTION 4.08. [Reserved].
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 9.02 hereof respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) 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 five Business Days prior to the
related Record Date and (ii) such Holder shall hold (A) 100% of the Class
Certificate Balance of any Class of Certificates or (B) Certificates of any
Class with aggregate principal Denominations of not less than $1,000,000 or
(y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
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 countersignature and delivery of such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be
issued at the 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 5.06 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such
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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 execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and 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 which 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 cancelled by the Trustee in accordance with the Trustee's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said 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 (i) deliver
a letter in substantially the form of Exhibit L (the "Rule 144A Letter");
provided, however, that if such transfer is purportedly being made in reliance
upon Rule 144A under the Securities Act, without the requisite written
certification from the Certificateholder's prospective transferee, such
prospective transferee will be deemed to have made the representations and
warranties contained in Exhibit L hereto or (ii) there shall be delivered to
the Trustee at the expense of the transferor an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding
the related Certificates and the Mortgage Loans and such other information as
shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by
Rule 144A. The Trustee and the Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably
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request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor, the Seller and the Servicer
against any liability that may result if the transfer is not so exempt or is
not made in accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee (in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
L, or in the event such Certificate is a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I or Exhibit
Q), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan or arrangement subject
to Section 4975 of the Code, or a person acting on behalf of any such plan or
arrangement nor using the assets of any such plan or arrangement to effect
such transfer, (ii) in the case of a Certificate that is an ERISA-Restricted
Certificate and that has been the subject of an ERISA Qualifying Underwriting,
if the purchaser is an insurance company, a representation that the purchaser
is an insurance company which is purchasing such Certificates with funds
contained in an "insurance company general account" (as such term is defined
in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and 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 or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion of
Counsel shall not be an expense of either the Trustee or the Trust Fund,
addressed to the Trustee, to the effect that the purchase and holding of such
ERISA-Restricted Certificate will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, 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 to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. For purposes of the preceding sentence,
with respect to an ERISA-Restricted Certificate that is not a Residual
Certificate, in the event the representation letter referred to in the
preceding sentence is not so furnished, such representation shall be deemed to
have been made to the Trustee by the transferee's (including an initial
acquiror's) acceptance of the ERISA-Restricted Certificates. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to ERISA or to the Code without the delivery to the Trustee of an
Opinion of Counsel satisfactory to the Trustee as described above shall be
void and of no effect.
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To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual 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 Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual 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 Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual 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 Residual 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 Residual 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 Residual Certificate and (C) not to Transfer its Ownership
Interest in a Residual Certificate or to cause the Transfer of an
Ownership Interest in a Residual 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 Residual 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 Residual 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 Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a
Residual 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
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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 Residual 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 Residual Certificate
at and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the
Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted
Transferee.
The restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Seller or the Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC
at any time that the Certificates are outstanding or result in the imposition
of any tax on the Trust Fund, a Certificateholder or another Person. Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
hereby consents to any amendment of this Agreement which, 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 Residual
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 Residual Certificate which 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 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such
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representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Trustee may rely and
shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and
persons shown on the books of such indirect participating firms as direct or
indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (z) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate
Balance of the Book-Entry Certificates together advise the Trustee and the
Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same.
Upon surrender to the Trustee of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Servicer, the Depositor nor the Trustee shall be liable for any delay in
delivery of such instruction and each may conclusively rely on, and shall be
protected in relying on, such instructions. The Servicer shall provide the
Trustee with an adequate inventory of certificates to facilitate the issuance
and transfer of Definitive Certificates. Upon the issuance of 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 the Definitive
Certificates as Certificateholders hereunder; provided that the Trustee shall
not by virtue of its assumption of such obligations become liable to any party
for any act or failure to act of the Depository.
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 (b) there is delivered to the Servicer and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated,
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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, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the Trustee and any agent of the Servicer or the Trustee
may treat the Person in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions as provided in
this Agreement and for all other purposes whatsoever, regardless of whether
the Servicer, the Trustee or any agent of the Servicer or the Trustee receives
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 which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders
at such recipients' expense the most recent list of the Certificateholders of
such 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. 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 Corporate Trust Office for such purposes. The Trustee
will give prompt written notice to the Certificateholders of any change in
such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer 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 or the Servicer.
The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or a savings association
under the laws of the United States or under the laws of one of the states
thereof as the case may be 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 or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to
which the Depositor or the Servicer shall be a party, or any person succeeding
to the business of the Depositor or the Servicer, shall be the successor of
the Depositor or the Servicer, 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,
however, that the successor or surviving Person to the 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
Servicer and Others.
None of the Depositor, the Seller, the Servicer or any of the directors,
officers, employees or agents of the Depositor, the Seller or the Servicer
shall be under any liability to the 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, however, that this provision
shall not protect the Depositor, the Seller, the Servicer or any such Person
against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, the Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Depositor, the
Seller, the Servicer and any director, officer, employee or agent of the
Depositor, the Seller or the Servicer may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Seller, the
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Servicer shall be
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indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense related to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant
to this Agreement) and any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Seller or the Servicer shall be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that any of the
Depositor, the Seller or the Servicer may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Depositor, the Seller and the
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account.
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor servicer and receipt
by the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates or (b) upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination under clause (b)
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor Servicer shall have assumed
the Servicer's responsibilities, duties, liabilities and obligations
hereunder.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to deposit in the Certificate
Account or remit to the Trustee any payment required to be made under the
terms of this Agreement, which failure shall continue unremedied for five
days after the date upon which written notice of such failure shall have
been given to the Servicer by the Trustee or the Depositor or to the
Servicer and the Trustee by the Holders of Certificates having not less
than 25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in this Agreement, which failure materially
affects the rights of Certificateholders, that failure continues
unremedied for a period of 60 days after the date on which written notice
of such failure shall have been given to the Servicer by the Trustee or
the Depositor, or to the Servicer and the Trustee by the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced
by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Servicer shall consent to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Servicer or
all or substantially all of the property of the Servicer; or
(v) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of,
or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations.
If an Event of Default described in clauses (i) to (v) of this
Section shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 66 2/3% of
the Voting Rights evidenced by the Certificates, the
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Trustee shall by notice in writing to the Servicer (with a copy to each Rating
Agency), terminate all of the rights and obligations of the Servicer under
this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On and after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. The Trustee shall thereupon make
any Advance which the Servicer failed to make subject to Section 4.01 hereof
whether or not the obligations of the Servicer have been terminated pursuant
to this Section. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any
obligation of the Servicer to pay amounts owed pursuant to Article VIII. The
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Certificate Account, or thereafter be received with
respect to the Mortgage Loans and to which the Servicer is not otherwise
entitled under this Agreement.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due prior to
the notice terminating such Servicer's rights and obligations as Servicer
hereunder and received after such notice, that portion thereof to which such
Servicer would have been entitled pursuant to Sections 3.08(a)(i) through
(viii),and any other amounts payable to such Servicer hereunder the
entitlement to which arose prior to the termination of its activities
hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, subject to and to the
extent provided in Section 3.04, be the successor to the Servicer in its
capacity as Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof and applicable law including the obligation to make Advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Certificate Account or Distribution
Account if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in
accordance with Section 7.01 hereof, the Trustee may, if it shall be unwilling
to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Section 4.01 hereof or if it is otherwise unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each
Rating Agency as the successor to the Servicer
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hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. Any successor to the Servicer shall
be an institution which is a FNMA and FHLMC approved seller/servicer in good
standing, which has a net worth of at least $15,000,000, and which is willing
to service the Mortgage Loans and executes and delivers to the Depositor and
the Trustee an agreement accepting such delegation and assignment, which
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer (other than
liabilities of the Servicer under Section 6.03 hereof incurred prior to
termination of the Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; and provided further that each
Rating Agency acknowledges that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation. Pending appointment of
a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.04 hereof, act
in such capacity as hereinabove provided. In connection with such appointment
and assumption, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess
of the Servicing Fee permitted the Servicer hereunder. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Trustee nor any other
successor Servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Servicer to deliver or provide, or any delay in delivering or providing,
any cash, information, documents or records to it.
Any successor to the Servicer as Servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its
service as Servicer maintain in force the policy or policies that the Servicer
is required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the Servicer
hereunder, either (i) the successor Servicer, including the Trustee if the
Trustee is acting as successor Servicer, shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS, or (ii) the
predecessor Servicer shall cooperate with the successor Servicer either (x) in
causing MERS to execute and deliver an assignment of Mortgage in recordable
form to transfer the Mortgage from MERS to the Trustee and to execute and
deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Servicer or (y)
in causing MERS to designate on the MERS(R) System the successor Servicer as
the servicer of such Mortgage Loan. The predecessor Servicer shall file or
cause to be filed any such assignment in the appropriate recording office. The
successor Servicer shall cause such assignment to be delivered to the Trustee
promptly upon receipt of the original with evidence of recording thereon or a
copy certified by the public recording office in which such assignment was
recorded.
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SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct; provided, however, that:
(i) unless an Event of Default known to the Trustee shall have
occurred and be continuing, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement,
(ii) the Trustee shall not be liable 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
(iii) 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
(iv) the Trustee and conforming to the requirements of this
Agreement which it believed in good faith to be genuine and to have
been duly executed by the proper authorities respecting any matters
arising hereunder;
(v) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be finally proven that the Trustee
was negligent in ascertaining the pertinent facts; and
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(vi) the Trustee shall not be liable 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 Certificates evidencing
not less than 25% of the Voting Rights of Certificates 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.
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,
Officers' 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 and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any
signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers
or accountants of its selection and the advice of any such counsel,
financial advisers or accountants 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 advice or Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(iv) the 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 Certificates evidencing not less
than 25% of the Voting Rights allocated to each Class of
Certificates;
(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 risk or expend its
own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not assured to it;
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(vii) the Trustee shall not be liable 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, rights or powers vested in it by this Agreement 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 satisfactory to the Trustee against
the costs, expenses and liabilities which may be incurred therein or
thereby.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor or the Seller, 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 the
Certificates or of any Mortgage Loan or related document or of MERS or the
MERS System other than with respect to the Trustee's execution and
counter-signature of the Certificates. The Trustee shall not be accountable
for the use or application by the Depositor or the Servicer of any funds paid
to the Depositor or the Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Certificate Account by the Depositor or the Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights as it would have if it were
not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Distribution Account on each Distribution Date
the amount specified in Section 3.08(b)(i). The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Seller
and held harmless against any loss, liability or expense (including reasonable
attorney's fees and expenses) (i) incurred in connection with any claim or
legal action relating to (a) this Agreement (including, but not limited to,
the enforcement of this Section 8.05), (b) the Certificates or (c) 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 incurred by reason of any action of the Trustee
taken at the direction of the Certificateholders and (ii) resulting from any
error in any tax or information return prepared by the Servicer. Such
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee
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hereunder. Without limiting the foregoing, the Servicer covenants and agrees,
except as otherwise agreed upon in writing by the Depositor and the Trustee,
and except for any such expense, disbursement or advance as may arise from the
Trustee's negligence, bad faith or willful misconduct, to pay or reimburse the
Trustee, for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance
of the Certificates, (B) the reasonable compensation, expenses and
disbursements of any accountant, engineer or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage such
persons to perform acts or services hereunder and (C) printing and engraving
expenses in connection with preparing any Definitive Certificates. Except as
otherwise provided herein, the Trustee shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by the Trustee in the
ordinary course of its duties as Trustee, Registrar, Tax Matters Person or
Paying Agent hereunder or for any other expenses.
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 which
would not cause either of the Rating Agencies to reduce their respective then
current ratings of the Certificates (or having provided such security from
time to time as is sufficient to avoid such reduction) as evidenced in writing
by each Rating Agency. 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 entity serving as Trustee may
have normal banking and trust relationships with the Depositor and its
affiliates or the Servicer and its affiliates; provided, however, that such
entity cannot be an affiliate of the Servicer other than the Trustee in its
role as successor to the Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Servicer 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 acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice
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or resignation, the resigning Trustee may, at the expense of the Seller,
petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time 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, or if at any time 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 a
tax is imposed with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund is located and the imposition of such tax would be
avoided by the appointment of a different trustee, then the Depositor or the
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Servicer and one copy
to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. Notice
of any removal of the Trustee shall be given to each Rating Agency by the
successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer an instrument accepting such appointment hereunder
and thereupon the resignation or removal of the predecessor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The Depositor, the Servicer and the
predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties, and obligations.
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.
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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 10 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 the business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such corporation shall be eligible
under the provisions of Section 8.06 hereof without the execution or filing of
any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for
the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by
it of a request to do so, or in the case an Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred
or imposed upon the Trustee, except for the obligation of the
Trustee under this Agreement to advance funds on behalf of the
Servicer, shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are
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to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the
applicable 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
such appointment shall not, and shall not be deemed to, constitute
any such separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Servicer, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and
indemnification to any such 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 separate trustees and co-trustees, when and
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 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 assets with respect to which any REMIC election
is to be made, as set forth in the Preliminary Statement, shall constitute,
and that the conduct of matters relating to such assets shall be such as to
qualify such assets 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 any such REMIC
and that in such capacity it shall: (a) prepare and file, or cause to be
prepared
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and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
Income Tax Return (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 any
such REMIC, 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; (c) make or cause to be made elections that such assets
be treated as a REMIC on the federal tax return 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 Residual 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
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status 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; (h) pay, from
the sources specified in the last paragraph of this Section 8.11, the amount
of any federal or state tax, including prohibited transaction taxes as
described below, imposed on any such REMIC prior to its termination 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) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other person as may
be required to sign such returns by the Code or state or local laws,
regulations or rules; (j) maintain records relating to any such REMIC,
including but not limited to the income, expenses, assets and liabilities
thereof and the fair market value and adjusted basis of the assets 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 any such REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any such REMIC, enter into settlement agreements with any
governmental taxing
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agency, extend any statute of limitations relating to any tax item of any such
REMIC, and otherwise act on behalf of any such REMIC in relation to any tax
matter or controversy involving it.
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
ten (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,
reasonably 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 any
REMIC hereunder as defined in Section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of such REMIC as defined in Section 860G(c)
of the Code, on any contribution to any REMIC hereunder after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including, without limitation, any minimum tax imposed upon any REMIC
hereunder pursuant to Sections 23153 and 24874 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) the
Servicer, in the case of any such minimum tax, or if such tax arises out of or
results from a breach by the Servicer of any of their obligations under this
Agreement, (iii) the Seller, if any such tax arises out of or results from the
Seller's obligation to repurchase a Mortgage Loan pursuant to Section 2.02 or
2.03 or (iv) in all other cases, or in the event that the Trustee, the
Servicer or the Seller fails to honor its obligations under the preceding
clauses (i),(ii) or (iii), any such tax will be paid with amounts otherwise to
be distributed to the Certificateholders, as provided in Section 3.08(b).
SECTION 8.12. Periodic Filings.
Pursuant to written instructions from the Depositor, the Trustee shall
prepare, execute and file all periodic reports required under the Securities
Exchange Act of 1934 in conformity with the terms of the relief granted to the
Depositor in CWMBS, Inc. (February 3, 1994), a copy of which has been supplied
to the Trustee by the Depositor. In connection with the preparation and filing
of such periodic reports, the Depositor and the Servicer shall timely provide
to the Trustee all material information available to them which is required to
be included in such reports and not known to them to be in the possession of
the Trustee and such other information as the Trustee reasonably may request
from either of them and otherwise reasonably shall cooperate with the Trustee.
The Trustee shall have no liability with respect to any failure to properly
prepare or file
96
such periodic reports resulting from or relating to the Trustee's inability or
failure to obtain any information not resulting from its own negligence or
willful misconduct.
97
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all Mortgage
Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Seller, the Transferors, the Servicer and the Trustee created
hereby with respect to the Trust Fund shall terminate upon the earlier of (a)
the purchase by the Servicer of all Mortgage Loans (and REO Properties)
remaining in the Trust Fund at the price equal to the sum of (i) 100% of the
Stated Principal Balance of each Mortgage Loan plus one month's accrued
interest thereon at the applicable Adjusted Net Mortgage Rate and (ii) the
lesser of (x) the appraised value of any REO Property as determined by the
higher of two appraisals completed by two independent appraisers selected by
the Servicer at the expense of the Servicer and (y) the Stated Principal
Balance of each Mortgage Loan related to any REO Property, in each case plus
accrued and unpaid interest thereon at the applicable Adjusted Net Mortgage
Rate and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to this Agreement. In no event shall the trusts created hereby continue beyond
the earlier of (i) the expiration of 21 years from the death of the survivor
of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United
States to the Court of St. James's, living on the date hereof and (ii) the
Latest Possible Maturity Date. The right to purchase all Mortgage Loans and
REO Properties pursuant to clause (a) above shall be conditioned upon the
aggregate Stated Principal Balance of the Mortgage Loans as of the Due Date in
the month of such purchase aggregating one percent or less of the aggregate
Cut-off Date Principal Balance of the Mortgage Loans.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Servicer determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Certificate Account, the Servicer shall direct the
Trustee promptly to send a final distribution notice to each
Certificateholder. If the 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, the Servicer shall notify the
Depositor and the Trustee of the date the Servicer 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 next 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
98
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 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 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 Servicer the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case
on the final Distribution Date and in the order set forth in Section 4.02, in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class
of Regular Certificates, the Certificate Balance thereof plus accrued interest
thereon in the case of an interest bearing Certificate and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
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 which 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 A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Trust Fund which remain subject
hereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option 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 Servicer, to the
effect that the failure to comply with the requirements of this Section 9.03
will not (i) result in the imposition of taxes on "prohibited transactions" on
any REMIC as defined in section 860F of the Code, or
99
(ii) cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) Within 90 days prior to the final Distribution
Date set forth in the notice given by the Servicer under Section
9.02, the Servicer shall prepare and the Trustee, at the expense of
the "tax matters person," shall adopt a plan of complete liquidation
within the meaning of section 860F(a)(4) of the Code which, as
evidenced by an Opinion of Counsel (which opinion shall not be an
expense of the Trustee or the Tax Matters Person), meets the
requirements of a qualified liquidation; and
(2) Within 90 days after the time of adoption of
such a plan of complete liquidation, the Trustee shall sell all of
the assets of the Trust Fund to the Servicer for cash in accordance
with Section 9.01.
(b) The Trustee as agent for any REMIC hereby agrees to adopt and
sign such a plan of complete liquidation upon the written request of the
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 Servicer.
(c) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Servicer to prepare and the Trustee to adopt and sign a
plan of complete liquidation.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Seller, the Transferors, the Servicer and the Trustee without the consent of
any of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to
correct any defective provision herein or to supplement any provision herein
which may be inconsistent with any other provision herein, (iii) to add to the
duties of the Depositor, the Seller or the Servicer, (iv) to add any other
provisions with respect to matters or questions arising hereunder or (v) to
modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement; provided that any action pursuant to clauses (iv)
or (v) above shall not, as evidenced by an Opinion of Counsel (which Opinion
of Counsel shall not be an expense of the Trustee or the Trust Fund),
adversely affect in any material respect the interests of any
Certificateholder; provided, however, that the amendment shall not be deemed
to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of a Majority in Interest of each
Class of Certificates affected by such amendment. The Trustee, the Depositor,
the Seller, the Transferors and the Servicer also may at any time and from
time to time amend this Agreement without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of any REMIC as a REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on any REMIC pursuant to the Code that would be a claim
at any time prior to the final redemption of the Certificates or (iii) comply
with any other requirements of the Code, provided that the Trustee has 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
or the Trust Fund, to the effect that such action is necessary or helpful to,
as applicable, (i) maintain such qualification, (ii) avoid or minimize the
risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the Depositor,
the Seller, the Transferors, the Servicer and the Trustee with the consent of
the Holders of a Majority in Interest of each Class of Certificates affected
thereby 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, however, 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
101
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, as to such Class, Percentage Interests aggregating
66%, 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 not be an expense of
the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or
cause any REMIC 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 or a copy 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 (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material
respect the interests of any Certificateholder or (B) the conclusion set forth
in the immediately preceding clause (A) is not required to be reached pursuant
to this Section 10.01.
SECTION 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Servicer at its expense, but
only upon direction by any party to this Agreement to the Servicer accompanied
by an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
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
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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.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of the
(i) of the Mortgage Loans by the Seller to the Depositor and (ii) Trust Fund
by the Depositor to the Trustee each be, and be construed as, an absolute sale
thereof to the Trustee. It is, further, not the intention of the parties that
such conveyances be deemed a pledge thereof. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Seller or Depositor, as the case may be, or if for any other
reason this Agreement is held or deemed to create a security interest in
either such assets, then (i) this Agreement shall be deemed to be a security
agreement (within the meaning of the Uniform Commercial Code of the State of
New York) with respect to all such assets and security interests and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant pursuant to the terms of this Agreement (i) by the Seller to the
Depositor or (ii) 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 Seller and 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 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:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
103
3. The resignation or termination of the Servicer or the Trustee and the
appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to Section
2.03; and
5. The final payment to Certificateholders;
6. Any rating action involving the long-term credit rating of the
Servicer , which notice shall be made by first-class mail within two Business
Days after the Trustee gains actual knowledge thereof.
In addition, the Trustee shall, upon receipt, promptly furnish to each
Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 4.06;
2. Each annual statement as to compliance described in Section 3.16;
3. Each annual independent public accountants' servicing report described
in Section 3.17; and
4. Any notice of a purchase of a Mortgage Loan pursuant to Section 2.02,
2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered by first
class mail, by courier or by facsimile transmission to (a) in the case of the
Depositor, CWMBS, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, (b) in the case
of the Servicer, Washington Mutual Bank, FA, 19850 ▇▇▇▇▇▇▇ Street, N070205,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President - Investor Reporting,
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may be hereafter
furnished to the Depositor and the Trustee by the Servicer in writing, (c) in
the case of the Trustee, The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
Mortgage-Backed Securities Group, CWMBS, Inc. Series 2001-HYB1, or such other
address as the Trustee may hereafter furnish to the Depositor or Servicer and
(d) in the case of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency. 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
104
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 in Section 6.02, this Agreement may not be assigned by the 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 created hereby, 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 created hereby, 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
herein provided, and unless 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.
105
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit and
will cause each Subservicer to permit any representative of the Depositor, the
Seller or the Trustee during the Servicer's normal business hours, to examine
all the books of account, records, reports and other papers of the Servicer
relating to the Mortgage Loans, to make copies and extracts therefrom, to
cause such books to be audited by independent certified public accountants
selected by the Depositor, the Seller or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its
officers, employees and independent public accountants (and by this provision
the Servicer hereby authorizes said accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor, the Seller or the Trustee of any
right under this Section 10.09 shall be borne by the party requesting such
inspection; all other such expenses shall be borne by the Servicer or the
related Subservicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificate-holders 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.
SECTION 10.11. [Reserved].
SECTION 10.12. Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust Fund created by this Agreement is not authorized and has no power to:
(i) borrow money or issue debt;
(ii) merge with another entity, reorganize, liquidate or sell
assets; or
(iii) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file
an involuntary bankruptcy petition against the Trustee or the Trust
Fund or initiate any other form of insolvency proceeding until after
the Certificates have been paid.
* * * * * *
106
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and the
Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CWMBS, INC.,
as Depositor
By: /s/
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: /s/
---------------------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: /s/
---------------------------------------
Name:
Title:
WASHINGTON MUTUAL BANK, FA,
as Servicer and Transferor
By: /s/
---------------------------------------
Name:
Title:
WASHINGTON MUTUAL HOME LOANS, INC.,
as Transferor
By: /s/
---------------------------------------
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
S-I-1
SCHEDULE II-A
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 2001-HYB1
Representations and Warranties of the Seller
Countrywide Home Loans, Inc. ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule II-A to the
Depositor and the Trustee, as of the Closing Date, or if so specified herein,
as of the Cut-off Date. Capitalized terms used but not otherwise defined in
this Schedule II-A shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series.
(1) Countrywide 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 the Pooling and Servicing Agreement to be
conducted by Countrywide 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 perform any of its
other obligations under the Pooling and Servicing Agreement in accordance
with the terms thereof.
(2) Countrywide 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 the Pooling and
Servicing Agreement and has duly authorized by all necessary corporate
action on the part of Countrywide the execution, delivery and performance
of the Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery thereof
by the other parties thereto, constitutes a legal, valid and binding
obligation of Countrywide, enforceable against Countrywide in accordance
with its terms, 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.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Countrywide, the sale of the Mortgage Loans by Countrywide
under the Pooling and Servicing Agreement, the consummation of any other
of the transactions contemplated by the Pooling and Servicing Agreement,
and the fulfillment of or compliance with the terms thereof are in the
ordinary course of business of Countrywide and will not (A) result in a
material breach of any term or provision of the charter or by-laws of
Countrywide 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 Countrywide
is a party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to Countrywide
of any court, regulatory body, administrative agency or governmental body
having jurisdiction over
S-II-A-1
Countrywide; and Countrywide 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 Countrywide's ability
to perform or meet any of its obligations under the Pooling and Servicing
Agreement.
(4) No litigation is pending or, to the best of Countrywide's
knowledge, threatened, against Countrywide that would materially and
adversely affect the execution, delivery or enforceability of the Pooling
and Servicing Agreement or the ability of Countrywide to sell the
Mortgage Loans or to perform any of its other obligations under the
Pooling and Servicing Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Countrywide of, or compliance by Countrywide with, the
Pooling and Servicing Agreement or the consummation of the transactions
contemplated thereby, or if any such consent, approval, authorization or
order is required, Countrywide has obtained the same.
(6) Countrywide intends to treat the transfer of the Mortgage Loans
to the Depositor as a sale of the Mortgage Loans for all tax, accounting
and regulatory purposes.
S-II-A-2
S-II-B-2
SCHEDULE II-B
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 2001-HYB1
Representations and Warranties of the Servicer
Washington Mutual Bank, FA ("Washington Mutual") hereby makes the
representations and warranties set forth in this Schedule II-B to the
Depositor and the Trustee, as of the Closing Date, or if so specified herein,
as of the Cut-off Date. Capitalized terms used but not otherwise defined in
this Schedule II-B shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series.
(1) Washington Mutual is duly organized as a federally
chartered savings association and is validly existing and in good
standing under the laws of the United States of America and is duly
authorized and qualified to transact any and all business contemplated by
the Pooling and Servicing Agreement to be conducted by Washington Mutual
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 the
Pooling and Servicing Agreement and to perform any of its other
obligations under the Pooling and Servicing Agreement in accordance with
the terms thereof.
(2) Washington Mutual has the full corporate power and
authority to service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by the Pooling and Servicing Agreement and has duly authorized by all
necessary corporate action on the part of Washington Mutual the
execution, delivery and performance of the Pooling and Servicing
Agreement; and the Pooling and Servicing Agreement, assuming the due
authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of Washington
Mutual, enforceable against Washington Mutual in accordance with its
terms, 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.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Washington Mutual, the servicing of the Mortgage Loans by
Washington Mutual under the Pooling and Servicing Agreement, the
consummation of any other of the transactions contemplated by the Pooling
and Servicing Agreement, and the fulfillment of or compliance with the
terms thereof are in the ordinary course of business of Washington Mutual
and will not (A) result in a material breach of any term or provision of
the charter or by-laws of Washington Mutual 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 Washington Mutual is a
S-II-B-1
party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to Washington Mutual of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over Washington Mututal; and Washington Mututal 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 Washington Mutual's ability to perform or meet any
of its obligations under the Pooling and Servicing Agreement.
(4) Washington Mutual 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.
(5) No litigation is pending or, to the best of Washington
Mutual's knowledge, threatened, against Washington Mutual that would
materially and adversely affect the execution, delivery or enforceability
of the Pooling and Servicing Agreement or the ability of Washington
Mutual to service the Mortgage Loans or to perform any of its other
obligations under the Pooling and Servicing Agreement in accordance with
the terms thereof.
(6) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Washington Mutual of, or compliance by Washington
Mutual with, the Pooling and Servicing Agreement or the consummation of
the transactions contemplated thereby, or if any such consent, approval,
authorization or order is required, Washington Mutual has obtained the
same.
(7) The Servicer is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the MERS Mortgage Loans for as long as
such Mortgage Loans are registered with MERS.
S-II-B-2
SCHEDULE III
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 2001-HYB1
Representations and Warranties as to the Mortgage Loans
Countrywide Home Loans, Inc. ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule III to the Depositor
and the Trustee, as of the Closing Date. Capitalized terms used but not
otherwise defined in this Schedule III shall have the meanings ascribed
thereto in (i) the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") relating to the above-referenced Series, among Countrywide, as
seller, CWMBS, Inc., as depositor, Washington Mutual Bank, FA, as servicer and
transferor, Washington Mutual Home Loans, Inc., as transferor and The Bank of
New York, as trustee or (ii) the Mortgage Loan Purchase and Sale Agreements,
each dated as June 1, 2001 between Countrywide and each of Washington Mutual
Bank, FA and Washington Mutual Home Loans, Inc.
(1) The information with respect to such Mortgage Loan set
forth on the Mortgage Loan Schedule is complete, true and correct.
(2) The Mortgage and the Mortgage Note is not assigned or
pledged to any Person and, immediately prior to the transfer thereof
to the Trustee pursuant to Section 2.01, the Seller had good and
marketable title thereto. The Seller is the sole owner and holder of
such Mortgage Loan free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges,
or security interests of any nature and has full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign such Mortgage Loan
pursuant to this Agreement. Upon the transfer thereof to the Trustee
pursuant to Section 2.01, the Seller will have taken all actions
necessary on its part to be taken so that the Trustee will have good
indefeasible title to, and will be sole owner of, the Mortgage and
the Mortgage Note, free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges,
or security interests of any nature.
(3) With respect to each Mortgage Loan, (i) the Mortgage is a
valid, subsisting and enforceable first lien on the Mortgaged
Property, including all buildings, fixtures, installations and
improvements to the Mortgaged Property, and the Mortgaged Property
is free and clear of all encumbrances and liens having parity with
or priority over the first lien of the Mortgage except for (A) the
lien of current real property taxes and assessments not yet due and
payable, (B) covenants, conditions and restrictions, rights of way,
easements, mineral right reservations and other matters of public
record as of the date of recording of such Mortgage, such exceptions
generally being acceptable under prudent mortgage lending standards
and specifically reflected in the appraisal made
S-III-1
in connection with the origination of such Mortgage Loan or
specifically referred to in the mortgagee's policy of title
insurance and (C) other matters to which like properties are
commonly subject that do not materially interfere with the value (as
determined by the Appraised Value), use, enjoyment or marketability
of the Mortgaged Property and (ii) there are no security agreements,
pledged accounts, chattel mortgages, or equivalent documents related
to the Mortgage.
(4) The terms of the Mortgage and the Mortgage Note have not
been impaired, waived, altered, or modified in any respect, except
by a written instrument (i) which has been recorded, if necessary,
to protect the interest of the Purchaser; (ii) the substance of
which has been approved, if necessary, by the issuer of any related
Primary Mortgage Insurance Policy, and (iii) each of which is a part
of the Mortgage File and which has been delivered to the Trustee.
The substance of any such alteration or modification is reflected on
the Mortgage Loan Schedule.
(5) No instrument of release, waiver, alteration, or
modification has been executed in connection with such Mortgage
Loan, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, which is part of
the Collateral File and has been delivered to the Custodian, and the
terms of which are reflected in the Mortgage Loan Schedule.
(6) Other than with respect to the Mortgage Loans which are
identified on the Mortgage Loan Schedule as being delinquent 30-59
days, there is no default, breach, violation, or event of
acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute such a
default, breach, violation, or event of acceleration, and neither
the Seller, nor to the best of the Seller's knowledge, any seller or
servicer, has waived any such default, breach, violation, or event
of acceleration. All taxes, governmental assessments (including
assessments payable in future installments), insurance premiums,
leasehold payments, or ground rents which previously became due and
owing in respect of or affecting the related Mortgaged Property have
been paid, or an escrow of funds has been established for the items
identified in the Mortgage Loan Schedule in an amount sufficient to
pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Seller 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 or the
Mortgage Note. No foreclosure action has been commenced with respect
to any Mortgage Loan.
(7) The Mortgaged Property is free of material damage or waste
and is in good repair. There is no proceeding pending or, to the
best of the Seller's knowledge, threatened for the total or partial
condemnation of the Mortgaged Property and no notice of any such
pending or threatened proceeding has been received so as to
adversely impair the value or marketability of the Mortgaged
Property.
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(8) There are no mechanics' or similar liens or claims which
have been filed for work, labor, or material (and no rights are
outstanding that under law could give rise to such lien) which are,
or may be, liens prior or equal to the lien of the related Mortgage,
which are not insured against by the related mortgagee's policy of
title insurance.
(9) Unless such Mortgage Loan is an Escrow Holdback Mortgage
Loans, all of the improvements which were included for the purpose
of determining the Appraised Value of the Mortgaged Property were
completed at the time that such Mortgage Loan was originated and lie
wholly within the boundaries and building restriction lines of such
Mortgaged Property. No improvements on adjoining properties encroach
upon the Mortgaged Property. No improvement located on or being part
of the Mortgaged Property is in violation of any applicable zoning
law or regulation, subdivision law or ordinance.
(10) Each party that has had any interest in the Mortgage Loan
is, and during the period in which it held and disposed of such
interest, was: (i) in compliance with any and all applicable
licensing requirements of the laws of the state wherein the
Mortgaged Property is located and (ii)(A) organized under the laws
of such state, (B) qualified to do business in such state, (C) a
federal savings and loan association or national bank having
principal offices in such state, (D) not doing business in such
state, or (E) not required to qualify to do business in such state.
(11) Other than with respect to 0.89% of the Mortgage Loans as
of July 1, 2001 (which are delinquent 30-59 days), no Monthly
Payment is delinquent as of the Cut-off Date. For purposes of the
prior sentence, delinquent means that a scheduled Monthly Payment
was not received by the time the next Monthly Payment was due and
that it remains unpaid. Other than with respect to 0.89% of the
Mortgage Loans as of July 1, 2001 (which are delinquent 30-59 days),
all payments required to be made under the related Mortgage and
Mortgage Note prior to the Cut-off Date, have been made. Not more
than one payment required to be made under the related Mortgage and
Mortgage Note has been late and has remained unpaid through its next
Due Date (excluding any applicable grace period) during the twelve
months immediately preceding the month prior to the Cut-off Date.
(12) Each Mortgage Note, Mortgage, Assignment of Mortgage and
other document required by the Pooling and Servicing Agreement to be
delivered by the Seller has been so delivered to the Trustee. There
are no custodial agreements in effect adversely affecting the right
or ability of the Seller to make the deliveries specified in Section
2.01. Each of the documents with respect to such Mortgage Loan
specified in Section 2.01 or in the Mortgage File, is genuine, true,
correct and complete and has not been altered or modified in any way
except as noted in the Mortgage File and reflected on the Mortgage
Loan Schedule, and each is duly executed and in due and proper form.
Each of the documents with respect to such Mortgage Loan is genuine,
true, correct and
S-III-3
complete and has not been altered or modified in any way except as
noted in the Mortgage File and as reflected on the Mortgage Loan
Schedule.
(13) The Mortgage Note and the Mortgage are genuine, and each
is the legal, valid and binding obligation of the maker thereof and
each party assuming liability therefor, enforceable in accordance
with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws affecting the enforcement of creditors' rights generally and
except that the equitable remedy of specific performance and other
equitable remedies are subject to the discretion of the courts. All
parties to the Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage and convey the estate
therein purported to be conveyed, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties or
pursuant to a valid power-of-attorney that has been recorded with
the Mortgage. The Collateral Documents are on forms acceptable to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
(14) The transfer of the Mortgage Note and the Mortgage as and
in the manner contemplated by this Agreement is sufficient fully to
transfer to the Purchaser all right, title and interest of the
Seller thereto as note holder and mortgagee or trust deed
beneficiary. The Mortgage has been duly assigned and the Mortgage
Note has been duly endorsed as provided in Section 2.2(a). The
assignment of mortgage delivered to the Trustee pursuant to Section
2.01(c)(iii) is in recordable form except for the insertion of the
name of the assignee and recording information and is acceptable for
recording under the laws of the applicable jurisdiction.
(15) Any and all requirements of any federal, state, or local
law including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal
credit opportunity, or disclosure laws applicable to such Mortgage
Loan have been complied with. The consummation of the transactions
contemplated by this Agreement will not cause the violation of any
such laws.
(16) Unless such Mortgage Loan is an Escrow Holdback Mortgage
Loan, the proceeds of such Mortgage Loan have been fully disbursed.
There is no requirement for, and the Seller shall not make any,
future advances under the terms of the Mortgage Loan. Any future
advances made prior to the applicable Cut-off Date have been
consolidated with the principal balance secured by the Mortgage, and
such principal balance, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan
Schedule. Unless such Mortgage Loan is subject to negative
amortization, the Unpaid Principal Balance as of the applicable
Cut-off Date does not exceed the original principal amount of such
Mortgage Loan. Unless such Mortgage Loan is an Escrow Holdback
Mortgage Loan, 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, and certificates of
completion with respect thereto are contained in the related
Mortgage File. All costs, fees and expenses incurred in making,
S-III-4
or closing or recording such Mortgage Loan have been paid or will be
paid in the ordinary course of business.
(17) Such Mortgage Loan is covered by an ALTA mortgage title
insurance policy acceptable to Seller, with, in the case of an ARM
Loan, an adjustable rate mortgage endorsement, substantially in the
form of ALTA Form 6.1 or 6.2, or such other generally used and
acceptable form of policy and applicable endorsements acceptable
under the Seller's underwriting guidelines. Each such policy
affirmatively insures ingress and egress and insures against
encroachments by or upon the Mortgaged Property. Each such policy
was issued on the date of the origination of each related Mortgaged
Loan by a title insurer acceptable under the originator's
underwriting guidelines and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the
originator, and its successors and assigns, as to the first priority
lien of the Mortgage in the original principal amount of such
Mortgage Loan. Each such policy has been duly and validly endorsed
to the Trustee or the assignment to the Trustee of the Seller's
interest does not require the consent of or notification to the
insurer, and such mortgage title insurance policy is in full force
and effect. Where required by law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required
mortgage title insurance. No claims have been made under such policy
and the Seller has taken no action that would impair the
enforceability of such policy.
(18) All buildings and other improvements upon the Mortgaged
Property are insured against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, pursuant to insurance policies
conforming to the requirements of Section 2.10 of the Servicing
Agreement and issued by an insurer acceptable under Seller's
underwriting guidelines. Such insurance is in an amount which is at
least equal to the lesser of (i) 100% of the replacement value of
the improvements securing the Mortgage Loan or (ii) the Unpaid
Principal Balance of the Mortgage Loan (so long as it equals 80% of
the insurable value of the improvements); provided that in any case
such amount is sufficient to prevent the Mortgagor and/or Mortgagee
from becoming a co-insurer. If the Mortgaged Property is in an area
then identified on a flood hazard boundary map or flood insurance
rate map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance is available), a
flood insurance policy is in effect meeting the requirements of the
current guidelines of the Federal Insurance Administration with an
insurance carrier acceptable to Seller. Such flood insurance is in
an amount representing coverage not less than the least of (i) the
outstanding principal balance of the Mortgage Loan, (ii) the full
insurable value of the improvements securing such Mortgage Loan, and
(iii) the maximum amount of insurance available under the National
Flood Insurance Act of 1968 and the Flood Disaster Protection Act of
1973, each as amended. Each individual insurance policy has been
validly issued and is in full force and effect. Each individual
insurance policy contains a standard mortgagee clause naming the
related Transferor, and its successors and assigns, as mortgagee and
loss payee and provides for at least 30 days' prior written notice
of any cancellation, reduction in amount, or material change in
S-III-5
coverage. All premiums due thereon have been paid. The Mortgage
obligates the Mortgagor to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the servicer or the owner of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and
to seek reimbursement therefor from the Mortgagor. No claims have
been made under such policies since origination of the Mortgage
Loan, and the Seller has taken no action that would impair the
coverage of any such insurance policy, the benefits of any
endorsement or the validity, binding effect and enforceability of
the foregoing.
(19) There is no valid offset, defense, counterclaim or right
of rescission as to the related Mortgage Note or Mortgage, including
the obligation of the Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note. Any applicable right of rescission
has expired, nor will the operation of any of the terms of such
Mortgage Note or Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable, in
whole or in part, or subject to any right of rescission, set-off,
recoupment, counterclaim or defense, including, without limitation,
the defense of usury, and no such right of rescission, set-off,
recoupment, counterclaim or defense has been asserted with respect
thereto. No Mortgage Loan is subject to any pending bankruptcy,
insolvency, reorganization or moratorium. If such Mortgage Loan is
an ARM Loan, all the applicable terms of the Mortgage Note
pertaining to adjustments of the Mortgage Interest Rate and the
Monthly Payments and payment adjustments in connection therewith are
enforceable and will not affect the priority of the Mortgage lien.
If such Mortgage Loan is an ARM Loan, the related Mortgage Note has
been timely and appropriately adjusted, if such adjustment is
required, and the respective Mortgagor timely and appropriately
advised. All such adjustments have been made in compliance with
applicable law and in accordance with the terms of the Mortgage Loan
documents.
(20) Such Mortgage Loan was originated by (i) the related
Transferor, (ii) a savings and loan association, savings bank,
commercial bank, credit union, insurance company or similar
institution that is supervised and examined by a Federal or state
authority or (iii) a mortgage banker approved by the Secretary of
Housing and Urban Development.
(21) Principal payments on such Mortgage Loan commenced or are
required to commence no more than two months after funds were
disbursed in connection with such Mortgage Loan. Unless such
Mortgage Loan is subject to negative amortization as indicated on
the Mortgage Loan Schedule, the Mortgage Note requires a Monthly
Payment which is sufficient to fully amortize the original principal
balance over the remaining term thereof and to pay interest at the
Mortgage Rate.
(22) Such Mortgage Loan is a residential mortgage loan having
an original term to maturity as set forth on the Mortgage Loan
Schedule, and if no such term is specified in the Mortgage Loan
Schedule, the term to maturity does not exceed forty
S-III-6
years, with interest payable in arrears on the first day of each
month (or such other day of the month as may be noted on the
Mortgage Loan Schedule). On the Closing Date, and if such Mortgage
Loan is an ARM Loan, until the next Interest Rate Adjustment Date,
the Mortgage Interest Rate is as set forth on the Mortgage Loan
Schedule. If such Mortgage Loan is an ARM Loan, the Mortgage
Interest Rate is subject to adjustment periodically on each Interest
Rate Adjustment Date to a new Mortgage Interest Rate (rounded as
provided in the related Mortgage Note) equal to the then current
Index plus the Gross Margin as specified on the related Mortgage
Note, subject to the Maximum Mortgage Interest Rate, the Minimum
Mortgage Interest Rate, the Interest Rate Increase Maximum and the
Interest Rate Decrease Maximum, in each case if and to the extent
specified in the Mortgage Loan Schedule.
(23) The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security, except the lien of
the Mortgage.
(24) The Mortgage contains customary and enforceable provisions
which render the rights and remedies of the Trustee 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. There is no homestead, dower, curtesy or other
exemption or right available to the Mortgagor or any other Person
which would interfere with the right to sell the Mortgaged Property
at a trustee's sale or the right to foreclose the Mortgage. The
Mortgage or Mortgage Note contains a provision that is, to the
extent not prohibited by federal or state law, enforceable and that
provides for the acceleration of the payment of the unpaid principal
balance of the Mortgage Loan in the event that the Mortgaged
Property is sold or transferred without the prior written consent of
the mortgagee thereunder. The Mortgagor has not notified the Seller
and the Seller has no knowledge of any relief requested or allowed
to the Mortgagor under the Soldiers and Sailors Civil Relief Act of
1940.
(25) If the Mortgage constitutes 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
Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(26) The Mortgaged Property consists of a single parcel of real
property separately assessed for tax purposes, upon which is erected
a detached or an attached one-to-four-family residence, an
individual condominium or an individual unit in a planned unit
development that is in compliance with the originator's underwriting
guidelines. Such Mortgaged Property is not (i) a property held in
trust (other than a revocable inter vivos trust that is in
compliance with ▇▇▇▇▇▇ Mae's requirements applicable to the related
Transferor, or, if the Mortgaged Property is located in Illinois, an
Illinois land trust), (ii) a mobile home or manufactured home or
(iii) a recreational
S-III-7
vehicle. None of the Mortgage Loans are considered agricultural
loans. No Mortgaged Property consists of a log home, earthen home,
underground home or a home which is situated on more than ten acres
of property. No Mortgaged Property (and no portion of a Mortgaged
Property) is being used for commercial purposes.
(27) The Loan-to-Value Ratio of such Mortgage Loan at the time
of origination was not greater than the Loan to Value Ratio set
forth in the Mortgage Loan Schedule, and if no such percentage is
specified, not greater than 95%. If such Mortgage Loan had at the
time of origination a Loan-to-Value Ratio in excess of 80%, unless
otherwise specified in the Commitment Letter, such Mortgage Loan is
subject to a Primary Mortgage Insurance Policy issued by an insurer
acceptable to FNMA or FHLMC which provides coverage in an amount at
least equal to that which would be required by FNMA or FHLMC if such
Mortgage Loan was being delivered for sale to, and/or securitization
by, FNMA or FHLMC. All provisions of such Primary Mortgage Insurance
Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No
Mortgage Loan requires payment of such premiums, in whole or in
part, by the Purchaser. No action has been taken and no event has
occurred that has, or will result in the exclusion from, denial of,
or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor to maintain the
Primary Mortgage Insurance Policy and to pay all related premiums
and charges. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance
premium. None of the Mortgage Loans are covered by a "lender-paid"
Primary Mortgage Insurance Policy.
(28) Such Mortgage Loan was underwritten in accordance with the
underwriting guidelines of the related Transferor in effect at the
time such Mortgage Loan was originated.
(29) 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 or which the
Seller expects not to be cured, and no escrow deposits or payments
of other charges or payments due the Seller have been capitalized
under the Mortgage or the Mortgage Note.
(30) Such Mortgage Loan does not have a shared appreciation
feature or other contingent interest feature, and such Mortgage Loan
does not involve buydowns, balloons, timeshares or graduated
payments. If such Mortgage Loan is an ARM Loan, it is not
convertible to a Mortgage Loan with a fixed Mortgage Interest Rate,
unless otherwise indicated in the Mortgage Loan Schedule.
(31) No statement, tape, diskette, form, report or other
document furnished by Seller pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement
contains any statement that is inaccurate in any material respect.
S-III-8
(32) The origination, servicing and collection practices used
with respect to such Mortgage Loan (including without limitation,
the establishment, maintenance and servicing of the Escrow Accounts,
if any), have been in all material respects in accordance with
applicable laws and regulations, the terms of the Mortgage Loan
documents, and Acceptable Servicing Procedures. With respect to
Escrow Accounts and escrow payments that the servicer is entitled to
collect, there are no deficiencies for which customary arrangements
for repayment have not been made. All escrow payments have been
collected in all material respects in compliance with applicable
law, Acceptable Servicing Procedures and the provisions of the
Mortgage Loan documents. If such Mortgage Loan is the subject of an
escrow, escrow of funds is not prohibited by applicable law and has
been established in an amount sufficient to pay for every escrowed
item that remains unpaid and has been assessed but is not yet due
and payable. Any Escrow Account interest required to be paid
pursuant to applicable law has been properly paid and credited.
(33) If such Mortgage Loan is an ARM Loan, the Mortgagor has
received and has executed, where applicable, prior to origination of
the Mortgage Loan, any disclosure and rescission materials required
by applicable law with respect to the making of the Mortgage Loan.
(34) [reserved].
(35) The appraisal report with respect to the Mortgaged
Property contained in the Mortgage File was signed by a qualified
appraiser, who met the requirements of the related Transferor's
appraisal policies and procedures, 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 such application and who otherwise meets
the requirements of the related Transferor. Such appraisal was made
in accordance with the relevant provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as in
effect on the date such Mortgage Loan was originated. The appraisal
is on a form acceptable to FNMA or FHLMC.
(36) Such Mortgage Loan does not meet the definition of
mortgage set forth in Section 1602(aa) of the Truth-in-Lending Act.
The disclosures required under the Home Ownership and Equity
Protection Act of 1994 do not apply to such Mortgage Loan.
(37) Unless otherwise stated in the Mortgage Loan Schedule, if
such Mortgage Loan is an ARM Loan, it does not have an interest rate
step-down feature or similar feature that would result in a
downwards adjustment to the Mortgage Interest Rate, the Gross Margin
or the Index as a result of the related Mortgagor's payment method
or payment history (e.g., no downwards adjustment in return for
allowing the automatic withdrawal of funds from the related
Mortgagor's bank account to make the
S-III-9
Monthly Payments on such Mortgage Loan, or for making payments when
due on such Mortgage Loan).
(38) The Seller is not aware of any fact that would reasonably
lead the Seller to believe that any misrepresentation, negligence or
fraud has taken place on the part of any other Person, including
without limitation the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to
such Mortgage Loan.
(39) The Mortgaged Property is lawfully occupied under
applicable law; 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, have
been made or obtained from the appropriate authorities.
(40) The Seller has no knowledge of any circumstances or
condition existing as of the Closing Date with respect to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's
credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment as of such Closing
Date.
(41) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards
including, without limitation, asbestos, and neither the Seller nor,
to the Seller's knowledge, the related Mortgagor, has received any
notice of any violation or potential violation of such law.
(42) [reserved]
(43) Interest on each Mortgage Loan is calculated on the basis
of a 360-day year consisting of twelve 30-day months.
(44) [reserved].
(45) [reserved].
(46) [reserved].
(47) [reserved].
(48) No Mortgage Loan is a Cooperative Loan or an Escrow
Holdback Mortgage Loan.
(49) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property; and
S-III-10
(50) No Mortgage Loan constitutes an "extension of credit"
within the meaning of Tex. Const. Art. XVIss.50(a)(6) (2000) or an
"equity loan" within the meaning of the notice required pursuant to
Tex. Const. Art. XVIss.50(g) (2000).
S-III-11
EXHIBIT A
[FORM OF SENIOR CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : July 1, 2001
First Distribution Date : August 21, 2001
Initial Certificate Balance
of this Certificate
("Denomination") : $[ ]
Initial Certificate Balances
of all Certificates of
this Class : $[ ]
CUSIP : [ ]
Interest Rate : Variable
Maturity Date : [ ]
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 2001-HYB1
Class [ ]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a Trust
Fund consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by first liens on one- to four-family
residential properties
CWMBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Servicer, the Transferors or the Trustee referred
to below or any of their respective affiliates. Neither this Certificate nor
the Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination
of this Certificate by the aggregate Initial Certificate Balances of all
Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by CWMBS, Inc. (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement") among the Depositor, Countrywide Home
Loans, Inc., as seller (the "Seller"), Washington Mutual Bank, FA, as servicer
(in such capacity, the "Servicer) and as a transferor (in such capacity, a
"Transferor"), Washington Mutual Home Loans, Inc., as a transferor (in such
capacity, a "Transferor" and together with Washington Mutual Bank, FA, the
"Transferors"), and The Bank of New York, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
* * *
A-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [ ]
THE BANK OF NEW YORK,
as Trustee
By ______________________
Countersigned:
By ____________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
A-3
EXHIBIT B
[FORM OF SUBORDINATED CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
Certificate No. : 1
Cut-off Date : July 1, 2001
First Distribution Date : August 21, 2001
Initial Certificate Balance
of this Certificate
("Denomination") : $[ ]
Initial Certificate Balances
of all Certificates of
this Class : $[ ]
CUSIP : [ ]
Interest Rate : Variable
Maturity Date : [ ]
B-1
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 2001-HYB1
Class [ ]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class with respect
to a Trust Fund consisting primarily of a pool of conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one- to
four-family residential properties
CWMBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Servicer, the Transferors or the Trustee referred
to below or any of their respective affiliates. Neither this Certificate nor
the Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination
of this Certificate by the aggregate Initial Certificate Balances of all
Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by CWMBS, Inc. (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement") among the Depositor, Countrywide Home
Loans, Inc., as seller (the "Seller"), Washington Mutual Bank, FA, as servicer
(in such capacity, the "Servicer) and as a transferor (in such capacity, a
"Transferor"), Washington Mutual Home Loans, Inc., as a transferor (in such
capacity, a "Transferor" and together with Washington Mutual Bank, FA, the
"Transferors"), and The Bank of New York, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
* * *
B-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [ ]
THE BANK OF NEW YORK,
as Trustee
By ______________________
Countersigned:
By ________________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
B-3
EXHIBIT C
[FORM OF RESIDUAL CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST" ISSUED
UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO BELOW AND MAY NOT BE
TRANSFERRED TO ANY PERSON EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE
TRANSFEREE OF THE DUTIES OF THE SERVICER UNDER SUCH AGREEMENT.]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH
IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY
GENERAL ACCOUNTS" 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 section i and iii of ptce 95-60
OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
C-1
Certificate No. : [ ]
Cut-off Date : July 1, 2001
Initial Certificate Balance
of this Certificate
("Denomination") : $[ ]
Initial Certificate Balances
of all Certificates of
this Class : $100.00
CUSIP : [ ]
Interest Rate : Variable
Maturity Date : [ ]
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 2001-HYB1
evidencing the distributions allocable to the Class
A-R Certificates with respect to a Trust Fund consisting primarily of
a pool of conventional loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties
CWMBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Servicer, the Transferors or the Trustee referred
to below or any of their respective affiliates. Neither this Certificate nor
the Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [ ] is the registered owner of the Percentage
Interest (obtained by dividing the Denomination of this Certificate by the
aggregate Initial Certificate Balances of all Certificates of the Class to
which this Certificate belongs) in certain monthly distributions with respect
to a Trust Fund consisting of the Mortgage Loans deposited by CWMBS, Inc. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Countrywide Home Loans, Inc., as seller ( the "Seller"),
Washington Mutual Bank, FA, as servicer (in such capacity, the "Servicer) and
as a transferor (in such capacity, a "Transferor"), Washington Mutual Home
Loans, Inc., as a transferor (in such capacity, a "Transferor" and together
with Washington Mutual Bank, FA, the "Transferors"), and The Bank of New
C-2
York, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class A-R
Certificate at the Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York.
No transfer of a Class A-R Certificate shall be made unless the Trustee
shall have received either (i) a representation letter 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 Section 4975 of the Code, nor a person
acting on behalf of any such plan, which representation letter shall not be an
expense of the Trustee or the Servicer, or (ii) in the case of any such Class
A-R Certificate presented for registration in the name of an employee benefit
plan subject to ERISA, or 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 Servicer to the effect that the purchase or holding of
such Class A-R Certificate will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, 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 Servicer to any obligation in addition to those undertaken
in this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee or the Servicer. Notwithstanding anything else to the contrary herein,
any purported transfer of a Class A-R Certificate to or on behalf of an
employee benefit plan subject to ERISA or to the Code without the opinion of
counsel satisfactory to the Trustee as described above shall be void and of no
effect.
Each Holder of this Class A-R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class A-R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class A-R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor, each of such documents to be
in the form described in the Agreement, (iii) each person holding or acquiring
any Ownership Interest in this Class A-R Certificate must agree to require a
transfer affidavit and to deliver a transfer certificate to the Trustee as
required pursuant to the Agreement, (iv) each person holding or acquiring an
Ownership Interest in this Class A-R Certificate must agree not to transfer an
Ownership Interest in this Class A-R Certificate if it has actual knowledge
that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class A-R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
C-3
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [ ]
THE BANK OF NEW YORK,
as Trustee
By ______________________
Countersigned:
By ___________________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
C-4
EXHIBIT D
[RESERVED]
D-1
EXHIBIT E
[Form of Reverse of Certificates]
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 2001-HYB1
This Certificate is one of a duly authorized issue of Certificates
designated as CWMBS, Inc. Mortgage Pass-Through Certificates, of the Series
specified on the face hereof (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the business day immediately following the servicer remittance date, (the
"Distribution Date"), commencing on the first Distribution Date specified on
the face hereof, to the Person in whose name this Certificate is registered at
the close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement. The Record Date applicable to each Distribution Date is the last
Business Day of the month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
[Five Business Days prior to the Distribution Date in April 2006, The
Bank of New York, in its capacity as Aucution Administrator, will auction the
Class 3-A-1 Certificates to third party investors. On the Distribution Date in
April 2006, the Holders of the Class 3-A-1 Certificates will be obligated to
tender their Certificates to the Auction Administrator, in return for a
distribution of the Par Price.]
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Servicer, the Transferors and the Trustee with the
consent of
E-1
the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent is made upon this Certificate. The
Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Seller, the Servicer, the Transferors and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Depositor, the Trustee, nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the Pool Stated Principal Balance is
less than 1% of the Cut-off Date Pool Principal Balance, the Seller will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and all property acquired in respect of the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by
the Agreement will terminate upon the later of the maturity or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund or the disposition of all property in respect
thereof and the distribution to Certificateholders of all amounts required to
be distributed pursuant to the Agreement. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
E-2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________
Dated:
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to, _____________________________________________
______________________________________________________________________________
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ___________________, or, if mailed by check, to ______________.
Applicable statements should be mailed to ___________________________________,
______________________________________________________________________________
______________________________________________________________________________
This information is provided by ________________________________________,
the assignee named above, or_________________________________________________,
as its agent.
E-3
STATE OF )
) ss.:
COUNTY OF )
On the _____day of ___________________, 20__ before me, a notary public
in and for said State, personally appeared __________________________________,
known to me who, being by me duly sworn, did depose and say that he executed
the foregoing instrument.
______________________________________
Notary Public
[Notarial Seal]
E-4
EXHIBIT F-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Seller]
Re: Pooling and Servicing Agreement among CWMBS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, Washington
Mutual Bank, FA, as Servicer and Transferor, Washington Mutual
Home Loans, Inc., as Transferor and The Bank of New York, as
Trustee Mortgage Pass-Through Certificates, Series 200_-
--------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "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 schedule) it has received:
(i) (a) the original Mortgage Note endorsed in the following form: "Pay
to the order of __________, without recourse" or (b) with respect to any Lost
Mortgage Note, a lost note affidavit from the Seller stating that the original
Mortgage Note was lost or destroyed; and
(ii) a duly executed assignment of the Mortgage (which may be included in
a blanket assignment or assignments).
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
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
F-1-1
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 Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By: __________________________________
Name:
Title:
F-1-2
EXHIBIT F-2
[Reserved]
F-2-1
EXHIBIT G-1
[Reserved]
G-2-1
EXHIBIT G-2
[Reserved]
G-2-1
EXHIBIT H-1
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Seller]
___________________________
___________________________
Re: Pooling and Servicing Agreement among CWMBS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller,
Washington Mutual Bank, FA, as Servicer and Transferor,
Washington Mutual Home Loans, Inc., as Transferor and The
Bank of New York, as Trustee , Mortgage Pass-Through
Certificates, Series 200_-
----------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "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, or, if the original Mortgage Note
has been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original Mortgage Note
was lost or destroyed, together with a copy of the related Mortgage
Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage Loan,
the original recorded Mortgage, [and in the case of each Mortgage
Loan that is a MERS Mortgage Loan, the original Mortgage, noting
thereon the presence of the MIN of the Mortgage Loan and language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan
is a MOM Loan, with evidence of recording
H-1-1
indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded];
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage Loan,
a duly executed assignment of the Mortgage to "The Bank of New York,
as trustee under the Pooling and Servicing Agreement dated as of
[month] 1, 2001, without recourse", or, in the case of each Mortgage
Loan with respect to property located in the State of California
that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage in blank (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect the
assignment of and transfer to the assignee thereof, under the
Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage
[(noting the presence of a MIN in the case of each Mortgage Loan
that is a MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of
recording thereon if recordation thereof is permissible under
applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or, in
the event such original title policy has not been received from the
insurer, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company, with the original policy of
title insurance to be delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a MERS
Mortgage Loan the Seller cannot deliver the original recorded Mortgage or all
interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v),
(vi), (viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule"
in Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
H-1-2
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][Loan Number
and Borrower Identification Mortgage Loan Schedule] or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By :________________________________
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[Reserved]
H-2-1
EXHIBIT I
TRANSFER AFFIDAVIT
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 200_-_
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, by and among CWMBS,
Inc., as depositor (the "Depositor"), Countrywide Home Loans, Inc., as seller,
Washington Mutual Bank, FA, as transferor and servicer, Washington Mutual Home
Loans, Inc., as transfeor 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 for its own account 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
I-1
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 J 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
Certificate.
8. The Transferee's taxpayer identification number is ____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" 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.
11. The Transferee anticipates that it will, so long as it holders the
Class A-R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class A-R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class A-R Certificates that
the Transferee intends to pay taxes associated with holding such Class A-R
Certificates as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class A-R
Certificates. The Transferee has provided financial statements or other
financial information requested by the Transferor in connection
I-2
with the transfer of the Class A-R Certificates to permit the Transferor to
assess the financial capability of the Transferee to pay such taxes. The
Transferee is not an employee benefit plan that is subject to ERISA or a plan
that is subject to Section 4975 of the Code, and the Transferee is not acting
on behalf of such a plan.
* * *
I-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ___ day of _______________, 20__.
______________________________________
PRINT 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 _____________, 20__.
______________________________________
NOTARY PUBLIC
My Commission expires the
___ day of ________________, 20__
I-4
EXHIBIT 1
to EXHIBIT I
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 Code Section
521) which is exempt from tax imposed by Chapter 1 of the Code (including the
tax imposed by Code Section 511 on unrelated business taxable income) on any
excess inclusions (as defined in Code Section 860E(c)(1)) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives
described in Code Section 1381(a)(2)(c), (v) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
created or organized in or under the laws of the United States or any
political subdivision thereof, 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 the authority to control all
substantial decisions of the trust, (v) an "electing large partnership" within
the meaning of Section 775 of the Code, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class A-R Certificate to such Person may cause
the Trust Fund to fail to qualify as a REMIC at any time that certain
Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in Code Section
7701 or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof if all of its activities are subject to tax, and, with the exception
of the FHLMC, a majority of its board of directors is not selected by such
governmental 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.
I-5
EXHIBIT 2
to EXHIBIT I
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class A-R Certificate unless, in
addition to the 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 A-R Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Class A-R Certificate and (C)
not to Transfer its Ownership Interest in a Class A-R Certificate or to
cause the Transfer of an Ownership Interest in a Class A-R Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Class A-R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Class A-R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class A-R
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this 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.
I-6
The Trustee shall be entitled but not obligated to recover from any
Holder of a Class A-R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as
it became other than a Permitted Transferee, all payments made on such
Class A-R Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of
a Transfer of an Ownership Interest in a Class A-R Certificate to any
Holder who is not a Permitted Transferee.
I-7
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE
___________________________
Date
CWMBS, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage-Backed Securities Group
Series 200_-_
Re: CWMBS, Inc. Mortgage Pass-Through Certificates, Series
200_-_, Class
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that to the extent we are disposing of a Class A-R Certificate, we
have no knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
______________________________________
Print Name of Transferor
By: __________________________________
Authorized Officer
J-1-1
EXHIBIT J-2
FORM OF TRANSFEROR CERTIFICATE
_____________________________
Date
CWMBS, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage-Backed Securities Group
Series 200_-_
Re: CWMBS, Inc. Mortgage Pass-Through Certificates, Series 200_-_,
Class
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act.
Very truly yours,
______________________________________
Print Name of Transferor
J-2-1
By: _________________________________
Authorized Officer
J-2-2
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
____________________________
Date
CWMBS, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage-Backed Securities Group
Series 200_-_
Re: CWMBS, Inc. Mortgage Pass-Through Certificates,
Series 200_-_, Class
------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if the Certificates have been
the subject of an ERISA-Qualifying Underwriting and we are an insurance
company, a representation that we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general
account" (as such term is defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of
such Certificates are
K-1
covered under Sections I and III of PTCE 95-60, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with
clause (g) below), (f) we have not offered or sold any Certificates to, or
solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, or taken any
other action which would result in a violation of Section 5 of the Act, and
(g) we will not sell, transfer or otherwise dispose of any Certificates unless
(1) such sale, transfer or other disposition is made pursuant to an effective
registration statement under the Act or is exempt from such registration
requirements, and if requested, we will at our expense provide an opinion of
counsel satisfactory to the addressees of this Certificate that such sale,
transfer or other disposition may be made pursuant to an exemption from the
Act, (2) the purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with
any conditions for transfer set forth in the Pooling and Servicing Agreement.
Very truly yours,
______________________________________
Print Name of Transferee
By: __________________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
___________________________
Date
CWMBS, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage-Backed Securities Group
Series 200_-_
Re: CWMBS, Inc. Mortgage Pass-Through Certificates,
Series 200_-_, Class
-----------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if the Certificates have been
the subject of an ERISA-Qualifying Underwriting and we are an insurance
company, a representation that we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general
account" (as such term is defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of
such Certificates are covered under Sections I and III of PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Certificates, any
L-1
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,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in
securities or, if Buyer is a dealer, Buyer must own and/or invest on a
discretionary basis at least $10,000,000 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
----------------
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
----
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
----------------
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto. ------------------
---------------
___ Broker-dealer. The Buyer is a dealer registered pursuant to
-------------
Section 15 of the Securities Exchange Act of 1934.
L-3
___ Insurance Company. The Buyer is an insurance company whose
-----------------
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
-------------------
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
----------
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
------------------
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
---------------------------------
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
----------------------------
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
---------- ----------------
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated 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
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continue to rely on the statements made herein because one or more sales to
the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.
______________________________________
Print Name of Buyer
By: __________________________________
Name:
Title:
Date: ________________________________
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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
L-6
Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
______________________________________
Print Name of Buyer or Adviser
By: _________________________________
Name:
Title:
IF AN ADVISER:
______________________________________
Print Name of Buyer
Date: ________________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 200_-_
Loan Information
Name of Mortgagor: ______________________________________
Servicer Loan No.: ______________________________________
Trustee
Name: ______________________________________
Address: ______________________________________
______________________________________
______________________________________
Trustee
Mortgage File No.: ______________________________________
The undersigned Servicer hereby acknowledges that it has received from
The Bank of New York, as Trustee for the Holders of Mortgage Pass-Through
Certificates, of the above-referenced Series, 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 (the "Pooling and Servicing Agreement") relating to the
above-referenced Series among CWMBS, Inc., as Depositor, Countrywide Home
Loans, Inc., as Seller, Washington Mutual Bank, FA, as Servicer and
Transferor, Washington Mutual Home Loans, Inc., as Transferor and The Bank of
New York, as Trustee.
-------
( ) Mortgage Note dated _______________, 20__, 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
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_________________________ 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 Servicer hereby acknowledges and agrees as follows:
(1) The 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 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
Servicer assert or seek to assert any claims or rights of setoff to or
against the Documents or any proceeds thereof.
(3) The 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 Servicer shall
at all times be earmarked for the account of the Trustee, and the
Servicer shall keep the Documents and
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any proceeds separate and distinct from all other property in the
Servicer's possession, custody or control.
COUNTRYWIDE HOME LOANS, INC.
By __________________________________
Its _________________________________
Date:_________________, 20__
M-3
EXHIBIT N
REQUEST FOR RELEASE OF DOCUMENTS
To: The Bank of New York Attn: Mortgage Custody
Services
Re: The Pooling & Servicing Agreement dated [month] 1, 2001 among CWMBS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Washington Mutual Bank, FA, as Servicer and Transferor, Washington
Mutual Home Loans, Inc., as Transferor and The Bank of New York, as
Trustee
-------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee for CWMBS, Inc., we request the release of the Mortgage Loan File
for the Mortgage Loan(s) described below, for the reason indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
1. Mortgage Loan paid in full (Countrywide Home Loans, Inc. hereby
certifies that all amounts have been received).
2. Mortgage Loan Liquidated (Countrywide Home Loans, Inc. hereby
certifies that all proceeds of foreclosure, insurance, or other
liquidation have been finally received).
3. Mortgage Loan in Foreclosure.
4. Other (explain):
If item 1 or 2 above is checked, and if all or part of the Mortgage File
was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Mortgage Loan. If item 3 or 4 is checked, upon return
of all of the above documents to you as Trustee, please acknowledge your
receipt by signing in the space indicated below, and returning this form.
N-1
COUNTRYWIDE HOME LOANS, INC.
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: __________________________________
Name: ________________________________
Title: _______________________________
Date: _______________________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By: __________________________________
Name: ________________________________
Title: _______________________________
Date: _______________________________
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EXHIBIT O
[Reserved]
O-1
EXHIBIT P
[Reserved]
P-1
EXHIBIT Q
FORM OF TRANSFEREE CERTIFICATE
CWMBS, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Bank of New York
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage-Backed Securities Group
Series 200_-_, Class A-R
Re: CWMBS, Inc. Mortgage Pass-Through Certificates, Series 200_-_,
Class A-R
---------------------------------------------------------------
Ladies and Gentlemen:
In Connection with our acquisition of the above Certificates, we
certify that we are not an employee benefit plan subject to Section 406 of
ERISA or Section 4975 of the Code, nor a person acting on behalf of any such
plan or using the assets of such plan, or, alternatively, in the case of an
insurance company, the assets of any separate accounts to effect such
acquisition, or alternatively, the source of funds for the purchase of such
Transferred Certificate is an "insurance company general account" within the
meaning of Prohibited Transaction Class Exemption 95-60 (PTCE 95-60"), 60 Fed.
Reg. 35925 (July 12, 1995), and the terms and conditions of Section III of
PTCE 95-60 applicable to the acquisition and holding of such Transferred
Certificate.
Very truly yours,
______________________________________
Print Name of Transferee
By: __________________________________
Authorized Officer
Q-1
EXHIBIT R
SCHEDULE OF RECORDING STATES
Florida
Mississippi
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