EXHIBIT 99.1
EXECUTION COPY
CWMBS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2002
----------------------------------
CHL MORTGAGE PASS-THROUGH TRUST 2002-7
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2002-7
Table of Contents
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans .....................................................32
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans. .....................................39
SECTION 2.03. Representations, Warranties and Covenants of the Seller and Master
Servicer. ........................................................................43
SECTION 2.04. Representations and Warranties of the Depositor as to the Mortgage Loans. ........45
SECTION 2.05. Delivery of Opinion of Counsel in Connection with Substitutions. .................45
SECTION 2.06. Execution and Delivery of Certificates. ..........................................46
SECTION 2.07. REMIC Matters. ...................................................................46
SECTION 2.08. Covenants of the Master Servicer. ................................................46
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. Master Servicer to Service Mortgage Loans. .......................................47
SECTION 3.02. Subservicing; Enforcement of the Obligations of Servicers. .......................48
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Master
Servicer. ........................................................................48
SECTION 3.04. Trustee to Act as Master Servicer. ...............................................49
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate Account; Distribution
Account; Supplemental Loan Account; Capitalized Interest Account. ................49
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts. .............52
SECTION 3.07. Access to Certain Documentation and Information Regarding the Mortgage
Loans. ...........................................................................53
SECTION 3.08. Permitted Withdrawals from the Certificate Account and the Distribution
Account. .........................................................................53
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies. ........................................................................55
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements. .......................56
i
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans. ...........................................................................57
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files. .................................60
SECTION 3.13. Documents Records and Funds in Possession of Master Servicer to be Held
for the Trustee. .................................................................61
SECTION 3.14. Servicing Compensation. ..........................................................61
SECTION 3.15. Access to Certain Documentation. .................................................62
SECTION 3.16. Annual Statement as to Compliance. ...............................................62
SECTION 3.17. Annual Independent Public Accountants' Servicing Statement; Financial
Statements. ......................................................................62
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds. ..................................63
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances. ........................................................................64
SECTION 4.02. Priorities of Distribution. ......................................................64
SECTION 4.03. [Reserved]. ......................................................................69
SECTION 4.04. Allocation of Realized Losses. ...................................................69
SECTION 4.05. [Reserved] .......................................................................70
SECTION 4.06. Monthly Statements to Certificateholders. ........................................71
SECTION 4.07. [Reserved] .......................................................................73
SECTION 4.08. [Reserved] .......................................................................73
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates. ................................................................74
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of
Certificates. ....................................................................74
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates. ...............................79
SECTION 5.04. Persons Deemed Owners. ...........................................................79
SECTION 5.05. Access to List of Certificateholders' Names and Addresses. .......................79
SECTION 5.06. Maintenance of Office or Agency. .................................................79
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Master Servicer...................81
SECTION 6.02. Merger or Consolidation of the Depositor or the Master Servicer. .................81
SECTION 6.03. Limitation on Liability of the Depositor, the Seller, the Master Servicer
and Others. ......................................................................81
SECTION 6.04. Limitation on Resignation of Master Servicer. ....................................82
ii
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default. ...............................................................83
SECTION 7.02. Trustee to Act; Appointment of Successor. ........................................84
SECTION 7.03. Notification to Certificateholders. ..............................................85
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee. ...............................................................87
SECTION 8.02. Certain Matters Affecting the Trustee. ...........................................88
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans. ...........................89
SECTION 8.04. Trustee May Own Certificates. ....................................................89
SECTION 8.05. Trustee's Fees and Expenses. .....................................................89
SECTION 8.06. Eligibility Requirements for Trustee. ............................................90
SECTION 8.07. Resignation and Removal of Trustee. ..............................................90
SECTION 8.08. Successor Trustee. ...............................................................91
SECTION 8.09. Merger or Consolidation of Trustee. ..............................................91
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee. ...................................91
SECTION 8.11. Tax Matters. .....................................................................93
SECTION 8.12. Periodic Filings. ................................................................95
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all Mortgage Loans. ..................96
SECTION 9.02. Final Distribution on the Certificates. ..........................................96
SECTION 9.03. Additional Termination Requirements. .............................................97
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment. .......................................................................99
SECTION 10.02. Recordation of Agreement; Counterparts. .........................................100
SECTION 10.03. Governing Law. ..................................................................100
SECTION 10.04. Intention of Parties. ...........................................................101
SECTION 10.05. Notices. ........................................................................101
SECTION 10.06. Severability of Provisions. .....................................................102
SECTION 10.07. Assignment. .....................................................................102
SECTION 10.08. Limitation on Rights of Certificateholders. .....................................102
SECTION 10.09. Inspection and Audit Rights. ....................................................103
iii
SECTION 10.10. Certificates Nonassessable and Fully Paid. ......................................104
SECTION 10.11. [Reserved]. .....................................................................104
SECTION 10.12. Protection of Assets. ...........................................................104
iv
SCHEDULES
Schedule I: Mortgage Loan Schedule.............................................................S-I-1
Schedule II: Representations and Warranties of the Seller......................................S-II-1
Schedule III: Representations and Warranties of the Master Servicer............................S-III-1
Schedule IV: Representations and Warranties as to the Mortgage Loans...........................S-IV-1
Schedule V: Principal Balances Schedule [if applicable]........................................S-V-1
Schedule VI: Form of Monthly Master Servicer Report............................................S-VI-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: Form of Notional Certificate.........................................................D-1
Exhibit E: Form of Reverse of Certificates......................................................E-1
Exhibit F-1: Form of Initial Certification of Trustee (Initial Mortgage Loans)....................F-1
Exhibit F-2: Form of Initial Certification of Trustee (Supplemental Mortgage Loans)...............F-2
Exhibit G-1: Form of Delay Delivery Certification of Trustee (Initial Mortgage Loans).............G-1
Exhibit G-2: Form of Delay Delivery Certification of Trustee (Supplemental Mortgage Loans)........G-2
Exhibit H-1: Form of Final Certification of Trustee (Initial Mortgage Loans)......................H-1
Exhibit H-2: Form of Final Certification of Trustee (Supplemental Mortgage Loans).................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 Transferor 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: Form of Supplemental Transfer Agreement..............................................P-1
Exhibit Q: Form of Transferee Certificate.......................................................Q-1
v
THIS POOLING AND SERVICING AGREEMENT, dated as of March 1, 2002,
among CWMBS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (in such
capacity, the "Seller"), COUNTRYWIDE HOME LOANS SERVICING LP, as master
servicer (in such capacity, the "Master Servicer"), 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. As provided herein, the Trustee
will elect that the Trust Fund (except for the Supplemental Loan and
Capitalized Interest Account) be treated for federal income tax purposes as
comprising two real estate mortgage investment conduits (each a "REMIC" or, in
the alternative, the "Subsidiary REMIC" and the "Master REMIC," respectively).
The Subsidiary REMIC will hold as assets all property of the Trust Fund (other
than the Supplemental Loan Account and Capitalized Interest Account) and will
be evidenced by (i) the Subsidiary REMIC Regular Interests, which will be
uncertificated and will represent the "REMIC regular interests" in the
Subsidiary REMIC, and (ii) the Class SR-SR Interest, which will represent the
single uncertificated "REMIC residual interest" in the Subsidiary REMIC. The
Master REMIC will consist of the Subsidiary REMIC Regular Interests and will
be evidenced by the Regular Certificates, each of which (other than the Class
A-R Certificate) will represent ownership of one or more "REMIC regular
interests" in the Master REMIC. The Class A-R Certificate will represent
ownership of the sole class of "REMIC residual interest" in each of the
Subsidiary REMIC and the Master REMIC. The latest possible maturity date of
all REMIC regular interests created herein shall be the Latest Possible
Maturity Date.
The following table sets forth characteristics of the Certificates,
together with minimum denominations and integral multiples in excess thereof
in which such Classes shall be issued (except that one Certificate of each
Class of Certificates may be issuable in a different amount and, in addition,
one Residual Certificate representing the Tax Matters Person Certificate may
be issued in a different amount for each class of Master REMIC Interest):
===================== ========================== ===================== ========================= =====================
Integral
Initial Class Pass-Through Multiples
Certificate Rate Minimum in Excess of
Class Designation Balance (per annum) Denomination Minimum
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 1-A-1 $92,328,000.00 (1) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 2-A-1 $23,584,000.00 (1) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 3-A-1 $100,000,000.00 (2) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 3-A-2 $146,250,000.00 (3) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 3-A-3 $44,750,000.00 (4) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 4-A-1 $66,563,000.00 (5) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 5-A-1 $33,958,000.00 (1) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class 1-X (6) (7) $25,000.00(8) $1,000.00(8)
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class A-R $100.00 (9) (10) (10)
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class M $4,968,000.00 (11) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class B-1 $4,184,000.00 (11) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class B-2 $2,615,000.00 (11) $25,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class B-3 $1,569,000.00 (11) $100,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class B-4 $784,000.00 (11) $100,000.00 $1,000.00
--------------------- -------------------------- --------------------- ------------------------- ---------------------
Class B-5 $1,562,448.02 (11) $100,000.00 $1,000.00
===================== ========================== ===================== ========================= =====================
------------------------------------------
(1) The Pass-Through Rate for the Class 1-A-1, Class 2-A-1 and Class
5-A-1 Certificates for any Distribution Date will be the Weighted
Average Adjusted Net Mortgage Rate of the Mortgage Loans in the
related Loan Group.
(2) The Pass-Through Rate for the Class 3-A-1 Certificates for any
Distribution Date will be equal to the Weighted Average Adjusted Net
Mortgage Rate of the Group 3 Mortgage Loans minus the Component Rate
for Component 1. The initial Component Rate for Component 1 is
0.44700%. After the Distribution Date in March 2007, the Component
Rate for Component 1 will equal zero.
(3) The Pass-Through Rate for the Class 3-A-2 Certificates for any
Distribution Date will be equal to the Weighted Average Adjusted Net
Mortgage Rate of the Group 3 Mortgage Loans minus the Component Rate
for Component 2. The initial Component Rate for Component 2 is
0.51900%. After the Distribution Date in March 2007, the Component
Rate for Component 2 will equal zero.
(4) The Pass-Through Rate for the Class 3-A-3 Certificates for any
Distribution Date will be equal to the Weighted Average Adjusted Net
Mortgage Rate of the Group 3 Mortgage Loans minus the Component Rate
for Component 2. The initial Component Rate for Component 2 is
0.51900%. After the Distribution Date in March 2007, the Component
Rate for Component 2 will equal zero.
(5) The Pass-Through Rate for the Class 4-A-1 Certificates for any
Distribution Date will be equal to the Weighted Average Adjusted Net
Mortgage Rate of the Group 4 Mortgage Loans minus the Component Rate
for Component 3. The initial Component Rate for Component 3 is
0.43467%. After the Distribution Date in January 2007, the Component
Rate for Component 3 will equal zero.
(6) The Class 1-X Certificates will be Notional Amount Certificates, will
have no Class Certificate Balance and will bear interest on its
Notional Amount (initially $368,610,577.00). On each Distribution
Date after the March 2007 Distribution Date, the Class 1-X
Certificates will have a Notional Amount of zero.
(7) The Pass-Through Rate for the Class 1-X Certificates for any
Distribution Date will be equal to the quotient of (a) the sum of the
Component Balances of each of Component 1, Component 2 and Component
3 for that Distribution Date, each multiplied by the related
Component Rate; divided by (b) the sum of the
2
Component Balances of each of Component 1, Component 2 and Component
3 for that Distribution Date. The initial Component Rate for each of
Component 1, Component 2, and Component 3 is 0.44700%, 0.51900%, and
.43467%, respectively. After the Distribution Date in March 2007, the
Component Rate for each of Component 1 and Component 2 will equal
zero. After the Distribution Date in January 2007, the Component Rate
for Component 3 will equal zero. Component 1 will equal (a) for each
Distribution Date to and including the March 2007 Distribution Date,
the product of 0.343642611684 and the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 3 as of the first day of
the related Due Period, and (b) for each Distribution Date following
the March 2007 Distribution Date, zero. Component 2 will equal (a)
for each Distribution Date to and including the March 2007
Distribution Date, the product of 0.656357388316 and the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 3 as of
the first day of the related Due Period, and (b) for each
Distribution Date following the March 2007 Distribution Date, zero.
Component 3 will equal (a) for each Distribution Date to and
including the January 2007 Distribution Date ,the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 4 as of the
first day of the related Due Period, and (b) for each Distribution
Date following the January 2007 Distribution Date, zero.
(8) Minimum Denomination is based on the Notional Amount of the Class.
(9) The Class A-R Certificates will not bear interest and will have no
Pass-Through Rate.
(10) The Class A-R Certificate 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 $.05.
(11) The Pass-Through Rate for each Class of Subordinated Certificates for
any Distribution Date will be a per annum rate equal to (a) the sum
of: (i) the Weighted Average Adjusted Net Mortgage Rate of Loan Group
1 multiplied by the excess of 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 over the
aggregate Class Certificate Balance of the Class 1-A-1 and Class A-R
Certificates immediately prior to that Distribution Date, (ii) the
Weighted Average Adjusted Net Mortgage Rate of Loan Group 2
multiplied by the excess of 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 over the
Class Certificate Balance of the Class 2-A-1 Certificates immediately
prior to that Distribution Date, (iii) the Weighted Average Adjusted
Net Mortgage Rate of Loan Group 3 minus the sum of (a) the product of
(0) 0.000000000000 and (2) the Component Rate for Component 1 and (b)
the product of (0) 0.000000000000 and (2) the Component Rate for
Component 2, multiplied by, the excess of 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
over the aggregate Class Certificate Balance of the Class 3-A-1,
Class 3-A-2 and Class 3-A-3 Certificates immediately prior to that
Distribution Date, (iv) the Weighted Average Adjusted Net Mortgage
Rate of Loan Group 4 minus the Component Rate for Component 3,
multiplied by the excess of the aggregate of the Stated Principal
Balances of the Mortgage Loans in Loan Group 4 as of the Due Date in
the month preceding the month of that Distribution Date over the
Class Certificate Balances of the Class 4-A-1 Certificates
immediately prior to that Distribution Date and (v) the Weighted
Average Adjusted Net Mortgage Rate of Loan Group 5 multiplied by the
excess of the aggregate of the Stated Principal Balances of the
Mortgage Loans in Loan Group 5 as of the Due Date in the month
preceding the month of that Distribution Date over the Class
Certificate Balance of the Class 5-A-1 Certificates immediately prior
to that Distribution Date, divided by (b) the aggregate of the Class
Certificate Balances of the Subordinated 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 5.538% per
annum.
3
The following table specifies the class designation, interest rate,
and principal amounts for each class of Subsidiary REMIC Interest:
============================ ============================== ====================== =============================
Subsidiary REMIC Interest Initial Interest Rate Corresponding
Principal Balance (per annum) Certificates
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-1-A-1 $92,328,000.00 (1) 1-A-1
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-2-A-1 $23,584,000.00 (1) 2-A-1
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-3-A-1 $100,000,000.00 (2) 3-A-1
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-3-A-2 $146,250,000.00 (3) 3-A-2
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-3-A-3 $44,750,000.00 (4) 3-A-3
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-4-A-1 $66,563,000.00 (5) 4-A-1
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-5-A-1 $33,958,000.00 (1) 5-A-1
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-M $4,968,000.00 (6) M
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-B-1 $4,184,000.00 (6) B-1
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-B-2 $2,615,000.00 (6) B-2
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-B-3 $1,569,000.00 (6) B-3
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-B-4 $784,000.00 (6) B-4
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-B-5 $1,562,448.02 (6) B-5
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-1-X (7) (8) 1-X
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-A-R $100.00 (9) A-R
---------------------------- ------------------------------ ---------------------- -----------------------------
SR-SR (10) (10)
============================ ============================== ====================== =============================
------------------------------------------
(1) The Pass-Through Rate for the XX-0-X-0, XX-0-X-0 and SR-5-A-1
Interest for any Distribution Date will be the Weighted Average
Adjusted Net Mortgage Rate of the Mortgage Loans in the related Loan
Group.
(2) The Pass-Through Rate for the SR-3-A-1 Interest for any Distribution
Date will be equal to the Weighted Average Adjusted Net Mortgage Rate
of the Group 3 Mortgage Loans minus the Component Rate for Component
1. The initial Component Rate for Component 1 is 0.44700%. After the
Distribution Date in March 2007, the Component Rate for Component 1
will equal zero.
(3) The Pass-Through Rate for the SR-3-A-2 Interest for any Distribution
Date will be equal to the Weighted Average Adjusted Net Mortgage Rate
of the Group 3 Mortgage Loans minus the Component Rate for Component
2. The initial Component Rate for Component 2 is 0.51900%. After the
Distribution Date in March 2007, the Component Rate for Component 2
will equal zero.
(4) The Pass-Through Rate for the SR-3-A-3 Interest for any Distribution
Date will be equal to the Weighted Average Adjusted Net Mortgage Rate
of the Group 3 Mortgage Loans minus the Component Rate for Component
2. The initial Component Rate for Component 2 is 0.51900%. After the
Distribution Date in March 2007, the Component Rate for Component 2
will equal zero.
(5) The Pass-Through Rate for the SR-4-A-1 Interest for any Distribution
Date will be equal to the Weighted Average Adjusted Net Mortgage Rate
of the Group 4 Mortgage Loans minus the Component Rate for Component
3. The initial Component Rate for Component 3 is 0.43467%. After the
Distribution Date in January 2007, the Component Rate for Component 3
will equal zero.
(6) The Pass-Through Rate for each Subordinated Interest for any
Distribution Date will be a per annum rate equal to (a) the sum of:
(i) the Weighted Average Adjusted Net Mortgage Rate of Loan Group 1
multiplied by the excess of 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 over the
aggregate Principal
4
Balance of the SR-1-A-1 and SR-A-R Interests immediately prior to
that Distribution Date, (ii) the Weighted Average Adjusted Net
Mortgage Rate of Loan Group 2 multiplied by the excess of 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 over the Principal Balance of the SR-2-A-1
Interest immediately prior to that Distribution Date, (iii) the
Weighted Average Adjusted Net Mortgage Rate of Loan Group 3 minus the
sum of (a) the product of (0) 0.000000000000 and (2) the Component
Rate for Component 1 and (b) the product of (0) 0.000000000000 and
(2) the Component Rate for Component 2, multiplied by, the excess of
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 over the aggregate Principal Balances of
the XX-0-X-0, XX-0-X-0 and SR-3-A-3 Interests immediately prior to
that Distribution Date, (iv) the Weighted Average Adjusted Net
Mortgage Rate of Loan Group 4 minus the Component Rate for Component
3, multiplied by the excess of the aggregate of the Stated Principal
Balances of the Mortgage Loans in Loan Group 4 as of the Due Date in
the month preceding the month of that Distribution Date over the
Principal Balance of the SR-4-A-1 Interest immediately prior to that
Distribution Date and (v) the Weighted Average Adjusted Net Mortgage
Rate of Loan Group 5 multiplied by the excess of the aggregate of the
Stated Principal Balances of the Mortgage Loans in Loan Group 5 as of
the Due Date in the month preceding the month of that Distribution
Date over the Principal Balance of the SR-5-A-1 Interest immediately
prior to that Distribution Date, divided by (b) the aggregate of the
Principal Balances of the Subordinated Interests immediately prior to
that Distribution Date. Notwithstanding the foregoing, in no event
will the Pass-Through Rate of the Subordinated Interests be less than
zero. The Pass-Through Rate for each Subordinated Interest for the
first Distribution Date will be 5.538% per annum.
(7) This Interest will be an interest only Interest and will not pay
principal.
(8) The Pass-Through Rate for the SR-1-X Interest for any Distribution
Date will be equal to the quotient of (1) the sum of the Component
Balances of each of Component 1, Component 2 and Component 3 for that
Distribution Date, each multiplied by the related Component Rate,
divided by (2) the sum of the Component Balances of each of Component
1, Component 2 and Component 3 for that Distribution Date.
(9) The SR-A-R Interest will not bear interest and will have no
Pass-Though Rate.
(10) SR-SR is the sole class of residual interest in the Subsidiary REMIC.
It pays no interest or principal.
On each Distribution Date, the Available Funds shall be distributed
with respect to the Subsidiary REMIC interests in the following manner:
(1) Interest is to be distributed on each Subsidiary REMIC Interest at
the rate described above to the same extent that interest is
distributed on each Subsidiary REMIC Interest's Corresponding Class
or Classes of Certificates;
(2) Losses with respect to Loan Group 1 are to be allocated first to the
Subordinated Interests, then to the SR-A-R Interest, and then to the
SR-1-A-1 Interest;
(3) Losses with respect to Loan Group 2 are to be allocated first to the
Subordinated Interests and then to the SR-2-A-1 Interest;
(4) Losses with respect to Loan Group 3 are to be allocated first to the
Subordinated Interests, then to the SR-3-A-1 Interest, then to the
SR-3-A-2 Interest, and then to the SR-3-A-3 Interest;
(5) Losses with respect to Loan Group 4 are to be allocated first to the
Subordinated Interests and then to the SR-4-A-1 Interest;
(6) Losses with respect to Loan Group 5 are to be allocated first to the
Subordinated Interests and then to the SR-5-A-1 Interest; and
(7) Principal is to be distributed on each Subsidiary REMIC Interest in
the same amount as principal is distributed on each Subsidiary REMIC
Interest's Corresponding Class of Certificates.
5
Set forth below are designations of Classes or Components of
Certificates to the categories used herein:
Book-Entry Certificates............. All Classes of Certificates other than the Physical Certificates.
COFI Certificates................... None.
Component Certificates.............. Class 1-X Certificates.
Delay Certificates.................. All interest bearing Classes of Certificates other than the Non-Delay
Certificates, if any.
ERISA-Restricted
Certificates........................ The Residual Certificates and Private Certificates; the Class 1-X
Certificates until an ERISA Qualifying Underwriting has occurred with
respect to such Class; and any Certificate that does not or no longer
satisfies the applicable rating requirement under the Underwriter's
Exemption.
Group 1
Senior Certificates................. Class 1-A-1 and Class A-R Certificates.
Group 1 Certificates................ Group 1 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 1.
Group 2
Senior Certificates................. Class 2-A-1 Certificates.
Group 2 Certificates................ Group 2 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 2.
Group 3
Senior Certificates................. Class 3-A-1, Class 3-A-2, Class 3-A-3 Certificates and Component 1
and Component 2.
Group 3 Certificates................ Group 3 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 3.
Group 4
Senior Certificates................. Class 4-A-1 Certificates and Component 3.
Group 4 Certificates................ Group 4 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 4.
Group 5
Senior Certificates................. Class 5-A-1 Certificates.
6
Group 5 Certificates................ Group 5 Senior Certificates and the portions of the Subordinated
Certificates related to Loan Group 5.
LIBOR Certificates.................. None.
Non-Delay Certificates.............. None.
Notional Amount
Certificates........................ Class 1-X Certificates.
Components.......................... For purposes of calculating distributions of principal and/or
interest, the Component Certificates, if any, will be comprised of
multiple payment components having the designations, Initial
Component Balances of Notional Amounts and Pass-Through Rates set
forth below:
Initial
Component Initial
Designation Notional Amount Pass-Through Rate
----------- ------------------ -----------------
Component 1 $103,092,783.51 0.446700%
Component 2 $196,907,216.49 0.518900%
Component 3 $68,621,946.00 0.430467%
Offered Certificates................ All Classes of Certificates other than the Private Certificates.
Physical Certificates............... Private Certificates and the Residual Certificates.
Private Certificates................ Class B-3, Class B-4 and Class B-5 Certificates.
Rating Agencies..................... S&P and Xxxxx'x.
Regular Certificates................ All Classes of Certificates, other than the Residual Certificates.
Residual Certificates............... Class A-R Certificates.
Senior Certificate Group............ Group 1 Senior Certificates, the Group 2 Senior Certificates, the
Group 3 Senior Certificates, the Group 4 Senior Certificates and the
Group 5 Senior Certificates, as applicable.
7
Senior Certificates................. Class 1-A-1, Class 2-A-1, Class 3-A-1, Class 3-A-2, Class 3-A-3,
Class 4-A-1, Class 5-A-1, Class 1-X 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.
Support Classes..................... None.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
If the aggregate Stated Principal Balance of the Initial Mortgage
Loans in Loan Group 1 or Loan Group 3 on the Closing Date is equal to or
greater than the aggregate Class Certificate Balances of the Certificates in
the related Certificate Group as of such date, all references herein to
"Conveyance Period", "Conveyance Period Distribution Date", "Supplemental
Amount", "Supplemental Loan Account", "Supplemental Mortgage Loan",
"Supplemental Transfer Agreement" and "Supplemental Transfer Date" with
respect to that Loan Group shall be of no force or effect and all provisions
herein related thereto shall similarly be of no force or effect.
8
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: With respect to any Class of Accrual Certificates and
any Distribution Date prior to the Accrual Termination Date, the amount
allocable to interest on such Class of Accrual Certificates with respect to
such Distribution Date pursuant to Section 4.02(a).
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Adjusted Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the Master Servicing Fee
Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, with respect to
any Distribution Date, the per annum rate equal to the Mortgage Rate (as of
the Due Date in the month preceding the month in which such Distribution Date
occurs) less the related Expense Rate.
Adjustment Date: A date specified in each Mortgage Note as a date on
which the Mortgage Rate on the related Mortgage Loan will be adjusted.
Advance: As to a Loan Group, the payment required to be made by the
Master 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 Master 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 Master 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.
Aggregate Supplemental Purchase Amount: With respect to any
Supplemental Transfer Date and Loan Group 1 or Loan Group 3, the applicable
"Aggregate Supplemental Purchase Amount" identified in the related
Supplemental Transfer Agreement for such Loan Group, which
shall be an estimate of the aggregate Stated Principal Balances of the
Supplemental Mortgage Loans to be included in such Loan Group identified in
such Supplemental Transfer Agreement.
Aggregate Supplemental Transfer Amount: With respect to any
Supplemental Transfer Date and Loan Group 1 or Loan Group 3, the aggregate
Stated Principal Balances as of the related Supplemental Cut-off Dates of the
Supplemental Mortgage Loans conveyed on such Supplemental Transfer Date for
Loan Group 1 or Loan Group 3, as listed on the revised Mortgage Loan Schedule
delivered pursuant to Section 2.01(f); provided, however, that such amount
shall not exceed the amount on deposit in the Supplemental Loan Account
allocated to that Loan Group.
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 or Component of Certificates, the ratio that the amount calculated
with respect to such Distribution Date (A) with respect to the Senior
Certificates or Component 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 Class or after the fourth
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
or Component 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 of business on the related Determination Date on account
of (i) Principal Prepayments received after the related Prepayment Period and
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; (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, (a) if the
loan-to-value ratio with respect to the Original Mortgage Loan at the time of
the origination thereof was 90% or less, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of the Original
Mortgage Loan and (b) if the
2
loan-to-value ratio with respect to the Original Mortgage Loan at the time of
the origination thereof was greater than 90%, the value of the Mortgaged
Property based upon the appraisal (which may be a drive-by appraisal) made at
the time of the origination of such Streamlined Documentation 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
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 and
Class of Subordinated Certificates, one month's interest accrued during the
related Interest Accrual Period at the Pass-Through Rate on the related
Assumed Balance immediately prior to that 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,
(d) with respect to Loan Group 1 or Loan Group 3, on each Conveyance Period
Distribution Date, the amount, if any, transferred from the Capitalized
Interest Account in respect of the applicable Capitalized Interest
Requirement, with respect to the Mortgage Loans in Loan Group 1 or Loan Group
3, (e) with respect to Loan Group 1 or Loan Group 3, on the last Conveyance
Period Distribution Date, the amount, if any, transferred from the
Supplemental Loan Account and (f) the Transfer Payment Received plus interest
thereon as provided in Section 4.05 for such Loan Group less the Transfer
Payment Made plus interest thereon as provided in Section 4.05 for such Loan
Group; provided, however, that on the fourth 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
3
Loss hereunder so long as the Master Servicer has notified the Trustee in
writing that the Master 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 Master 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.
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 Texas 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.
Capitalized Interest Account: The separate Eligible Account
designated as such and created and maintained by the Trustee pursuant to
Section 3.05(h) hereof. The Capitalized Interest Account shall be treated as
an "outside reserve fund" under applicable Treasury regulations and shall not
be part of any REMIC created hereunder. Except as provided in Section 3.05(h)
hereof, any investment earnings on the Capitalized Interest Account shall be
treated as owned by the Depositor and will be taxable to the Depositor.
Capitalized Interest Requirement: With respect to each Conveyance
Period Distribution Date and Loan Group 1 or Loan Group 3, the excess, if any,
of (a) the sum of (1) the amount calculated pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount for each Class of
Certificates (including, with respect to the Subordinated Certificates, the
related Assumed Balance of each such Class) in the Certificate Group related
to Loan Group 1 or Loan Group 3 for such Distribution Date, plus (2) the
Trustee Fee for Loan Group 1 or Loan Group 3 for such Distribution Date, over
(b)(i) with respect to each Mortgage Loan in Loan Group 1 or Loan Group 3,
1/12 of the product of the related Adjusted Mortgage Rate and the related
Stated Principal Balance as of the related Due Date (prior to giving effect to
any Scheduled Payment due on such Mortgage Loan on such Due Date) minus (2)
any related reductions required by Section 4.02(d) hereof. On the Closing
Date, the amount deposited in the Capitalized Interest Account shall be $0.00,
of which $0.00 shall be allocated to Loan Group 1 and $0.00 shall be allocated
to Loan Group 3.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
4
Certificate Account: The separate Eligible Account or Accounts
created and maintained by the Master Servicer pursuant to Section 3.05 with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of Certificateholders and designated "Countrywide Home
Loans, Inc. in trust for the registered holders of CHL Mortgage Pass-Through
Trust 2002-7, Mortgage Pass-Through Certificates Series 2002-7."
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 Group: The Group 1, Group 2, Group 3, Group 4 or Group 5
Certificates, as the context requires.
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.
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 or
Component, the amount by which the amount described in clause (i) of the
definition of Class Optimal Interest Distribution Amount for such Class or
Component exceeds the amount of interest actually distributed on such Class or
Component on such Distribution Date pursuant to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest bearing Class or, with respect to any interest
bearing Component, any Component
5
thereof, 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, Component Balance, Notional Amount or Component
Notional Amount 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 or Component.
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
or Component of interest bearing Certificates, the amount by which the
aggregate Class Interest Shortfalls for such Class or Component on prior
Distribution Dates exceeds the amount distributed on such Class or Component
on prior Distribution Dates pursuant to clause (ii) of the definition of Class
Optimal Interest Distribution Amount.
Closing Date: March 28, 2002.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COFI: The Monthly Weighted Average Cost of Funds Index for the
Eleventh District Savings Institutions published by the Federal Home Loan Bank
of San Francisco.
COFI Certificates: As specified in the Preliminary Statement.
Component: Each of Component 1, Component 2 and Component 3.
Component 1 Notional Amount: For each Distribution Date to and
including the March 2007 Distribution Date, the product of (0) 0.000000000000
and (2) the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 3 as of the first day of the related Due Period, and for each
Distribution Date following the March 2007 Distribution Date, zero.
Component 2 Notional Amount: For each Distribution Date to and
including the March 2007 Distribution Date, the product of (0) 0.000000000000
and (2) the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 3 as of the first day of the related Due Period, and for each
Distribution Date following the March 2007 Distribution Date, zero.
Component 3 Notional Amount: For each Distribution Date to and
including the January 2007 Distribution Date, the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 4 as of the first day of the
related Due Period, and for each Distribution Date following the January 2007
Distribution Date, zero.
Component Notional Amount: The Component 1 Notional Amount, Component
2 Notional Amount or Component 3 Notional Amount, as applicable.
6
Component Rate: For each Distribution Date prior to the March 2007
Distribution Date and Component 1, Component 2 and Component 3, 0.44700%,
0.51900% and 0.43467%, respectively. On each Distribution Date after the March
2007 Distribution Date, the Component Rate for each of Component 1 and
Component 2, respectively, will be zero. On each Distribution Date after the
January 2007 Distribution Date, the Component Rate for Component 3 will be
zero.
Conveyance Period: The period from the Closing Date until the
earliest of (i) the date on which the amount on deposit in the Supplemental
Loan Account for Loan Group 1 or Loan Group 3 is equal to or less than
$150,000, or (ii) an Event of Default occurs or (iii) April 30, 2002.
Conveyance Period Distribution Date: Each Distribution Date during
the Conveyance Period and, if the Conveyance Period ends after the
Distribution Date in a month, the immediately succeeding Distribution Date.
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.
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 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (Attn: Mortgage-Backed Securities Group, CWMBS, Inc.
Series 2002-7, facsimile no. (000) 000-0000, and which is the address to which
notices to and correspondence with the Trustee should be directed.
Countrywide Home Loans: Countrywide Home Loans, Inc., a New York
corporation and its successors and assigns.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership and its successors and assigns.
Cut-Off Date: In the case of (i) any Mortgage Loan included in Loan
Group 1 or Loan Group 3, (x) if such Mortgage Loan is an Initial Mortgage
Loan, March 1, 2002 and (y) if such Mortgage Loan is a Supplemental Mortgage
Loan, the later of (a) the date of origination of such Mortgage Loan or (b)
the first day of the month of the conveyance of such Mortgage Loan to the
7
Trust Fund, and (ii) in the case of any Mortgage Loan included in Loan Group
2, Loan Group 4 or Loan Group 5, March 1, 2002.
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).
Delay Certificates: As specified in the Preliminary Statement.
Delay Delivery Certification: As defined in Section 2.02(a) hereof.
Delay Delivery Mortgage Loans: The Mortgage Loans for which all or a
portion of a related Mortgage File is not delivered to Trustee on the Closing
Date or Supplemental Transfer Date, as applicable. With respect to up to 50%
of the Mortgage Loans in Loan Group 2, Loan Group 4 or Loan Group 5, and with
respect to up to 50% of the Initial Mortgage Loans in Loan Group 1 or Loan
Group 3, the Depositor may deliver all or a portion of each related Mortgage
File to the Trustee not later than thirty days after the Closing Date and not
later than twenty days after the relevant Supplemental Transfer Date with
respect to at least 90% of the Supplemental Mortgage Loans in Loan Group 1 or
Loan Group 3 conveyed on such Supplemental Transfer Date. To the extent that
Countrywide Servicing shall be in possession of any Mortgage Files with
respect to any Delay Delivery Mortgage Loan, until delivery of such Mortgage
File to the Trustee as provided in Section 2.01, Countrywide Servicing shall
hold such files as Master Servicer hereunder, as agent and in trust for the
Trustee.
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 the "Initial Notional Amount of this Certificate" or, if neither of the
foregoing, the Percentage Interest appearing on the face thereof.
Depositor: CWMBS, Inc., a Delaware corporation, or its successor in
interest.
8
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 preceding 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 2002-7
Mortgage Pass-Through Certificates, Series 2002-7." 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, 12:30
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The Business Day immediately following the Master
Servicer Remittance Date, commencing in April 2002.
Due Date: With respect to any Distribution Date, the first day of the
month in which the related Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
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 (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC
(to the limits established by the FDIC) and the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with (a) the trust department of a federal or state
chartered depository institution or (b) a trust company, acting in its
fiduciary capacity or (iv) 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.
9
Eligible Repurchase Month: As defined in Section 3.11 hereof.
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.
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 sum of any Liquidation Proceeds of such Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed to the
Master Servicer as Nonrecoverable Advance(s) with respect to such Mortgage
Loan pursuant to Section 3.08(a)(iii), 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.
Expense Rate: As to each Mortgage Loan, the sum of the related Master
Servicing Fee Rate and the Trustee Fee Rate.
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.
Final Certification: As defined in Section 2.02(a) hereof.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
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., Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Surveillance Group, or such other address as Fitch may hereafter furnish to
the Depositor and the Master Servicer.
10
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 Loss Coverage Amount: As of the Closing Date, $10,458,862
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.
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.
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: $125,000.
Initial Certification: As defined in Section 2.01(a).
Initial Component Balance: As specified in the Preliminary Statement.
Initial Cut-off Date: March 1, 2002.
Initial Cut-off Date Pool Principal Balance: $523,115,548.03.
Initial Mortgage Loan: With respect to (i) a Mortgage Loan included
in Loan Group 1 or Loan Group 3, any Mortgage Loan conveyed to the Trust Fund
on the Closing Date pursuant to this Agreement as identified on the Mortgage
Loan Schedule delivered to the Trustee on the Closing Date and (ii) a Mortgage
Loan included in Loan Group 2, Loan Group 4 or Loan Group 5, all Mortgage
Loans in such Loan Group.
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.
11
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to any Distribution Date, the
calendar month prior to the month of such Distribution Date.
Interest Rate: With respect to each Subsidiary REMIC Interest, the
applicable rate set forth or calculated in the manner described in the
Preliminary Statement.
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.
Lender PMI Mortgage Loan: Certain Mortgage Loans as to which the
lender (rather than the Mortgagor) acquires the Primary Insurance Policy and
charges the related Mortgagor an interest premium.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 4.08.
LIBOR Certificates: As specified in the Preliminary Statement.
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 Master 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, less the sum of related unreimbursed Master Servicing Fees,
Servicing Advances and Advances.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3, Loan
Group 4 and Loan Group 5, as applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1 Mortgage
Loans on the Mortgage Loan Schedule.
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.
Group 2 Senior Certificates: As specified in the Preliminary
Statement.
12
Loan Group 3: All Mortgage Loans identified as Loan Group 3 Mortgage
Loans on the Mortgage Loan Schedule.
Group 3 Senior Certificates: As specified in the Preliminary
Statement.
Loan Group 4: All Mortgage Loans identified as Loan Group 4 Mortgage
Loans on the Mortgage Loan Schedule.
Group 4 Senior Certificates: As specified in the Preliminary
Statement.
Loan Group 5: All Mortgage Loans identified as Loan Group 5 Mortgage
Loans on the Mortgage Loan Schedule.
Group 5 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.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Maintenance: With respect to any Cooperative Unit, the rent paid by
the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
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.
Master REMIC: As described in the Preliminary Statement.
Master Servicer: Countrywide Servicing in its capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, 12:30 p.m.
Pacific time on the Business Day immediately preceding such Distribution Date.
Master Servicer Remittance Date: The 18th day of each calendar month,
or if such 18th day is not a Business Day, the next succeeding Business Day,
commencing in April 2002.
Master 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 Master Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the Due
Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date), subject to
reduction as provided in Section 3.14.
Master Servicing Fee Rate: With respect to each Mortgage Loan and Due
Date, the amount set forth in the Mortgage Loan Schedule for such Due Date.
13
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R)System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The mortgage identification number for any MERS Mortgage Loan.
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: Xxxxx'x Investors Service, Inc., or any successor thereto.
If Xxxxx'x 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
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master 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 and any Supplemental Transfer
Agreement 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 Master Servicer to reflect the addition of Substitute
Mortgage Loans, the addition of any Supplemental Mortgage Loans pursuant to
the provisions of this Agreement and any Supplemental Transfer Agreement and
the deletion of Deleted Mortgage Loans pursuant to the provisions of this
Agreement) transferred to the Trustee as part of the Trust Fund and from time
to time subject to this Agreement, attached hereto as 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;
14
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of 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 dwelling in a de minimis PUD, (c) a condominium unit
or PUD (other than a de minimis PUD) or (d) a two- to
four-unit residential property or (e) a Cooperative Unit;
(xi) the Mortgage Rate;
(xii) the Master Servicing Fee Rate both before and after
the initial Adjustment Date for each Mortgage Loan;
(xiii) a code indicating whether the Mortgage Loan is a
Lender PMI Mortgage Loan and, in the case of any Lender PMI
Mortgage Loan, a percentage representing the amount of the
related interest premium charged to the borrower;
(xiv) the purpose for the Mortgage Loan;
(xv) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(xvi) the direct servicer of such Mortgage Loan as of the
Cut-off Date; and
(xvii) 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 and for each Loan
Group. The Seller shall update the Mortgage Loan Schedule in connection with
each Supplemental Transfer Agreement within a reasonable period of time after
the delivery to it of the Schedule of Supplemental Mortgage Loans attached to
the related Supplemental Transfer Agreement as Schedule A thereto.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
15
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time, net of any interest premium charged by the mortgagee to
obtain or maintain any Primary Insurance Policy.
Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
National Cost of Funds Index: The National Monthly Median Cost of
Funds Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.
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 Master Servicing Fee pursuant to
Section 3.14 hereof.
Non-Delay Certificates: As specified in the Preliminary Statement.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
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.
Notional Amount: With respect to any Distribution Date and the Class
1-X Certificates, the sum of the Component Notional Amounts of Component 1,
Component 2 and Component 3. On each Distribution Date after the March 2007
Distribution Date, the Class 1-X Certificates will have a Notional Amount of
zero. The Notional Amount of the Class 1-X Certificates for the first
Distribution Date is $368,621,946.
Notional Amount Certificates: As specified in the Preliminary
Statement.
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 less than the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group.
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, (ii) in the case of the Master Servicer, by the
President, an Executive Vice President, a Vice President, an Assistant Vice
President, the Treasurer, or one of the Assistant Treasurers or Assistant
Secretaries of Countrywide GP, Inc.
16
(the general partner of the Master Servicer) or (iii), if provided for in this
Agreement, by a Servicing Officer, as the case may be, and delivered to the
Depositor and the Trustee, as the case may be, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor, the Seller or the Master 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, the Seller and the
Master Servicer, (ii) not have any direct financial interest in the Depositor,
the Seller or the Master Servicer or in any affiliate of either, and (iii) not
be connected with the Depositor, the Seller or the Master Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the trust 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 2.05%
Class B-2 1.25%
Class B-3 0.75%
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 Senior Principal Balance: On or prior to the
fourth Senior Termination Date, the Subordinated Percentage for a Loan Group
of the aggregate Stated Principal Balances of the Mortgage Loans in such Loan
Group, in each case as of the Cut-off Date or, if such date is after the
fourth Senior Termination Date, the aggregate of the principal balances of the
Subordinated Certificates as of the Cut-off 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
17
prior to such Due Date and which did not become a Liquidated Mortgage Loan
prior to such Due Date.
Overcollateralized Group: As defined in Section 4.05 hereof.
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.
Pass-Through Rate: For any interest bearing Class of Certificates or
Component, 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 system, the commercial
paper or long-term unsecured debt obligations of such
holding company, but only if Xxxxx'x is not a Rating Agency)
are then rated one of the two highest long-term and the
highest short-term ratings of each 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;
18
(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 a taxable money-market portfolio having the
highest rating assigned by each Rating Agency (except if
Fitch is a Rating Agency and has not rated the portfolio,
the highest rating assigned by Moody's) and restricted to
obligations issued or guaranteed by the United States of
America or entities whose obligations are backed by the full
faith and credit of the United States of America and
repurchase agreements collateralized by such obligations;
and
(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
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
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 the 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-8ECI or any applicable successor
form, 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.
19
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.
Planned Balance: With respect to any Planned Principal Class or
Component and any Distribution Date appearing in Schedule IV hereto, the amount
appearing opposite such Distribution Date for such Class or Component.
Planned Principal Classes: As specified in the Preliminary Statement.
Planned Principal Components: 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 Period: As to any Distribution Date the calendar month
preceding the month of that Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment received during the related Prepayment Period,
the amount, if any, by which one month's interest at the related Mortgage
Rate, net of the Basic related Master Servicing Fee Rate on such Principal
Prepayment exceeds the amount of interest paid in connection with such
Principal Prepayment.
Prepayment Period: As to any Distribution Date, and Mortgage Loan,
the calendar month immediately preceding the month in which the Distribution
Date occurs.
Prepayment Shift Percentage: Not Applicable.
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 the Seller or the Master 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 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
20
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,
(g) with respect to Loan Group 1 or Loan Group 3, on the first Distribution
Date after the Conveyance Period, any amounts allocated to that Loan Group and
remaining in the Supplemental Loan Account and (h) any Transfer Payments
Received for such Loan Group, minus any Transfer Payments Made for such Loan
Group and Distribution Date in accordance with Section 4.05 hereof.
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 Master 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 (other than such Loan
Group's related Component Notional Amount or Component Notional Amounts)
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
fourth 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 (other than
such Loan Group's related Component Notional Amount or Component Notional
Amounts) immediately prior to such Distribution Date and the denominator of
which is the aggregate of the Class Certificate Balances of all Classes of
Certificates (other than the aggregate of the Component Notional Amounts)
immediately prior to such Distribution Date. In no event will the Pro Rata
Senior Percentage be greater than 100%.
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 denominator of which is the
aggregate of the Class Certificate Balances of the Subordinated Certificates.
Pro Rata Subordinated Percentage: As to any Distribution Date and
Loan Group, 100% minus the related Pro Rata Senior Percentage for such
Distribution Date.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
21
Prospectus Supplement: The Prospectus Supplement dated March 25, 2002
relating to the Offered Certificates.
PUD: Planned unit development.
Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to Section 2.02 or 2.03 hereof or purchased
at the option of the Master 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 Mortgage Rate if (x) the
purchaser is the Master Servicer or (y) if the purchaser is the Seller and the
Seller is the Master 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 Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
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.
22
Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the
Cooperative Property.
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 Master
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement.
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.
23
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 Class
Certificate Balance of each Class of Subordinated Certificates has been
reduced to zero.
Senior Percentage: As to any Loan Group and Distribution Date
occurring before April 2012, 100%, except as described in the following
sentence. As to any Loan Group and Distribution Date occurring (i) before
April 2012 but in or after April 2005 on which the Two Times Test is
satisfied, or (ii) in or after April 2012, is the related Pro Rata Senior
Percentage. If the Two Times Test is satisfied prior to April 2005, the Senior
Percentage for each Loan Group is the related Pro Rata Senior Percentage plus
50% of the related Pro Rata Subordinated Percentage. Notwithstanding the
foregoing, no decrease in the Senior Prepayment Percentage will occur unless
both of the Senior Step Down Conditions are satisfied.
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 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 with respect to all Loan Groups.
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.
24
Senior Principal Distribution Amount: As to any Distribution Date and
Senior Certificate Group, the sum of (i) 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; (iv) with respect to
Loan Group 1 or Loan Group 3, the amount, if any, on deposit in the
Supplemental Loan Account at the end of the Conveyance Period allocable to the
related Loan Group and (v) 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 fourth 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 each Loan Group: (i) the
outstanding principal balance of all Mortgage Loans in a Loan Group delinquent
60 days or more (averaged over the preceding six month period), as a
percentage of (a) if such date is on or prior to the fourth Senior Termination
Date, the Subordinated Percentage for such Loan Group of the aggregate Stated
Principal Balances of the Mortgage Loans in that Loan Group, or (b) if such
date is after the fourth Senior Termination Date, the aggregate Class
Certificate Balance of the Subordinated Certificates, does not equal or exceed
50%, and (ii) cumulative Realized Losses on the Mortgage Loans in each Loan
Group 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 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 each Senior Certificate Group, the
Distribution Date on which the Class Certificate Balance of the related
Classes of Senior Certificates have been reduced to zero.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer
of its servicing obligations, including, but not limited to, the cost of (i)
the preservation, restoration and protection of a
25
Mortgaged Property, (ii) any expenses reimbursable to the Master 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.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished
to the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
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 Master 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 regulations, confiscation
26
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, $5,229,431. 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, a division of The XxXxxx-Xxxx 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, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage
Surveillance Monitoring, or such other address as S&P may hereafter furnish to
the Depositor and the Master Servicer.
SR-SR Interest: The sole class of "residual interest" in the
Subsidiary REMIC.
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 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 Seller's Streamlined Loan Documentation Program then in
effect.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinate Component Balance: For any Loan Group as of any date of
determination, the then outstanding aggregate Stated Principal Balance of the
Mortgage Loans in that Loan Group minus the sum of the then outstanding
aggregate Class Principal Balance of the related Class or Classes of Senior
Certificates.
Subordinated Percentage: As to any Distribution Date on or prior to
the fourth Senior Termination Date and Loan Group, 100% minus the Senior
Percentage for the Senior Certificate
27
Group relating to such Loan Group for such Distribution Date. As to any
Distribution Date after the fourth 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 the excess of (A) the
sum, not less than zero, of the sum of (i) the Subordinated Percentage of all
amounts described in clauses (a) through (d) of the definition of "Principal
Amount" for such Distribution Date, (ii) with respect to each Mortgage Loan
that became a Liquidated Mortgage Loan during the calendar month preceding the
month of such Distribution Date, the 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, and (iii) the sum of 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 on any
Distribution Date after the fourth 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 Master Servicer has contracted
for the servicing of all or a portion of the Mortgage Loans pursuant to
Section 3.02 hereof.
Subsidiary REMIC: As described in the Preliminary Statement.
Subsidiary REMIC Interest: Any one of the Subsidiary REMIC Interests
or the SR Interest.
Subsidiary REMIC Regular Interest: Any one of the "regular interests"
in the Subsidiary REMIC described in the Preliminary Statement.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit 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 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
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv)
have a remaining term to maturity no greater than (and not more than one year
less than that of) the Deleted Mortgage Loan; (v) have a maximum interest rate
no lower than and not more than 1% per annum higher than, that of the Deleted
Mortgage Loan; (vi) 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
28
Loan; (vii) 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; (viii) not be a Cooperative Loan
unless the Deleted Mortgage Loan was a Cooperative Loan; and (ix) 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.
Supplemental Amount: The amount deposited in the Supplemental Loan
Account on the Closing Date, which shall equal $0.00, of which $0.00 shall be
allocated to purchase Supplemental Mortgage Loans for Loan Group 1 (the "Loan
Group 1 Supplemental Loan Amount") and $0.00 shall be allocated to purchase
Supplemental Mortgage Loans for Loan Group 3 (the "Loan Group 3 Supplemental
Loan Amount").
Supplemental Cut-off Date: With respect to any Supplemental Mortgage
Loan, the later of (i) the date of origination of such Mortgage Loan and (ii)
the first day of the month in which the related Supplemental Transfer Date
occurs.
Supplemental Loan 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
2002-7, Mortgage Pass-Through Certificates, Series 2002-7." Funds in the
Supplemental Loan Account shall be held in trust for the Certificateholders of
Group 1 Certificates or Group 3 Certificates for the uses and purposes set
forth in this Agreement and shall not be a part of any REMIC created
hereunder; provided, however, that any investment income earned from Permitted
Investments made with funds in the Supplemental Loan Account shall be for the
account of the Depositor.
Supplemental Mortgage Loan: Any Mortgage Loan in Loan Group 1 or Loan
Group 3 conveyed to the Trust Fund pursuant to Section 2.01 hereof and a
Supplemental Transfer Agreement, which Mortgage Loan shall be included in Loan
Group 1 or Loan Group 3 and shall be listed on the revised Mortgage Loan
Schedule delivered pursuant to this Agreement and on Schedule A to such
Supplemental Transfer Agreement. When used with respect to a single
Supplemental Transfer Date, Supplemental Mortgage Loan shall mean a
Supplemental Mortgage Loan conveyed to the Trust Fund on that Supplemental
Transfer Date.
Supplemental Transfer Agreement: A Supplemental Transfer Agreement
substantially in the form of Exhibit P hereto, executed and delivered by the
Seller, the Master Servicer, the Depositor and the Trustee as provided in
Section 2.01 hereof.
Supplemental Transfer Date: For any Supplemental Transfer Agreement,
the date the related Supplemental Mortgage Loans are transferred to the Trust
Fund pursuant to the related Supplemental Transfer Agreement.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulationss. 1.860F-4(d) and temporary
Treasury regulationss. 301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Trustee.
29
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 defined in Section 4.05 hereof.
Transfer Payment Received: As defined in Section 4.05 hereof.
Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by (i) the Pool Stated
Principal Balance plus (ii) any amounts remaining in the Supplemental Loan
Account (excluding any investment earnings thereon) with respect to such
Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate agreed upon in writing on or prior to the Closing Date by the Trustee and
the Depositor.
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, the Supplemental Loan Account and the Capitalized
Interest 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;
and (iv) all proceeds of the conversion, voluntary or involuntary, of any of
the foregoing.
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.
Undercollateralized Group: As defined in Section 4.05 hereof.
Underwriter's Exemption: Prohibited Transaction Exemption 2000-58, 65
Fed. Reg. 67765 (2000), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
30
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, (a) 1% of all Voting Rights shall be allocated to each Class of
Notional Amount Certificates, if any (such Voting Rights to be allocated among
the holders of Certificates of each such Class in accordance with their
respective Percentage Interests), and (b) the remaining Voting Rights (or 100%
of the Voting Rights if there is no Class of Notional Amount Certificates)
shall be allocated among Holders of the remaining Classes of Certificates in
proportion to the Certificate Balances of their respective Certificates on
such date.
Weighted Average Adjusted Net Mortgage Rate: For each Loan Group, the
average of the Adjusted Net Mortgage Rate of each Mortgage Loan in that Loan
Group, weighted on the basis of the Stated Principal Balance.
31
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 the Initial Mortgage Loans, including all interest and principal
received or receivable by the Seller on or with respect to the Initial
Mortgage Loans after the Initial Cut-off Date and all interest and principal
payments on the Mortgage Loans received prior to the Initial 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 Initial Cut-off Date. 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 (except that, in the case
of the Delay Delivery Mortgage Loans, such delivery may take place within
thirty (30) days following the Closing Date or twenty (20) days following the
applicable Supplemental Transfer Date, as applicable). 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 Initial Mortgage Loan that does not have a first
payment date on or before the Due Date in the month of the first Distribution
Date or any Supplemental Mortgage Loan that does not have a first payment date
on or before the Due Date in the month after the related Supplemental Transfer
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 Mortgage
Rate on the Cut-off Date Principal Balance of such Mortgage Loan.
(b) Immediately upon the conveyance of the Initial 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 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.
(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 (or, in the case of the Delay Delivery Mortgage Loans that are Initial
Mortgage Loans, will deliver or cause to be delivered to the Trustee within
thirty (30) days following the Closing Date and in the case of the Delay
Delivery Mortgage Loans that are Supplemental Mortgage Loans, will deliver or
cause to be delivered to the Trustee within twenty (20) days following the
applicable Supplemental Transfer Date) 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 in blank in the following
form: "Pay to the order of ____________ without recourse,"
with all intervening endorsements showing a complete chain
of endorsement from the originator to the Person endorsing
the Mortgage Note (each
32
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 Loan or if the Mortgage Loan was not a MOM 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;
(iv) the original or copies of each assumption,
modification, written assurance or substitution agreement,
if any;
(v) except as provided below, the original or
duplicate original lender's title policy or a printout of
the electronic equivalent and all riders thereto; and
(vi) in the case of a Cooperative Loan, the
originals of the following documents or instruments:
(A) The Coop Shares, together with a stock
power in blank;
(B) The executed Security Agreement;
(C) The executed Proprietary Lease;
33
(D) The executed Recognition Agreement;
(E) The executed UCC-1 financing statement
with evidence of recording thereon which have been
filed in all places required to perfect the
Seller's interest in the Coop Shares and the
Proprietary Lease; and
(F) The executed UCC-3 financing
statements or other appropriate UCC financing
statements required by state law, evidencing a
complete and unbroken line from the mortgagee to
the Trustee with evidence of recording thereon (or
in a form suitable for recordation).
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Trustee'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 (and any Supplemental
Transfer Agreement, as applicable) for the benefit of the Certificateholders
by including (or deleting, in the case of Mortgage Loans which are repurchased
in accordance with this Agreement) in such computer files 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 Master Servicer to, and the Master
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, (b) all interim recorded assignments or (c) the lender's title
policy (together with all riders thereto) satisfying the requirements of
clause (ii), (iii) or (v) 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, or because the title policy has not been delivered to either the
Master Servicer or the Depositor by the applicable title insurer in the case
of clause (v) 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, or,
in the case of clause (v) above, no later than 120 days 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 Master 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
34
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 Master 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 such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Trustee
shall (i) as the assignee thereof, affix the following language to each
assignment of Mortgage: "CWMBS Series 0000-0, Xxx Xxxx xx Xxx Xxxx as
trustee", (ii) cause such assignment to be in proper form for recording in the
appropriate public office for real property records and (iii) 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 assignments of Mortgage as to which the Trustee has not
received the information required to prepare such assignment in recordable
form, the Trustee'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 thirty (30) days after receipt thereof and that the
Trustee need not cause to be recorded any assignment which relates to a
Mortgage Loan (a) the Mortgaged Property and Mortgage File relating to which
are located in California or (b) in any other jurisdiction (including Puerto
Rico) under the laws of which in the opinion of counsel the recordation of
such assignment is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan.
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.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date with respect to the Initial Mortgage Loans,
the Seller shall either (i) deliver to the Depositor, or at the Depositor's
direction, to the Trustee or other designee of the Depositor the Mortgage File
as required pursuant to this Section 2.01 for each Delay Delivery Mortgage
Loan or (ii) (A) substitute a Substitute Mortgage Loan for the Delay Delivery
Mortgage Loan or (B) repurchase the Delayed Delivery Mortgage Loan, which
substitution or repurchase shall be accomplished in the manner and subject to
the conditions set forth in Section 2.03 (treating each Delay Delivery
Mortgage Loan as a Deleted Mortgage Loan for purposes of such Section 2.03);
provided, however, that if the Seller fails to deliver a Mortgage File for any
Delay Delivery Mortgage Loan within the thirty-day period provided in the
prior sentence, the Seller shall use its best reasonable efforts to effect a
substitution, rather than a repurchase of, such Deleted Mortgage Loan and
provided further that the cure period provided for in Section 2.02 or in
Section 2.03 shall not apply to the initial delivery of the Mortgage File for
such Delay Delivery Mortgage Loan, but rather the Seller shall have five (5)
Business Days to cure such failure to deliver. At the end of such thirty-day
period the Trustee shall send a Delay Delivery Certification for the Delay
Delivery Mortgage Loans delivered during such thirty-day period in accordance
with the provisions of Section 2.02.
35
Notwithstanding anything to the contrary in this Agreement, within
twenty days after a Supplemental Transfer Date with respect to the
Supplemental Mortgage Loans only, the Seller shall either (i) deliver to the
Depositor, or at the Depositor's direction, to the Trustee or other designee
of the Depositor the Mortgage File as required pursuant to this Section 2.01
for each Delay Delivery Mortgage Loan or (ii) (A) substitute a Substitute
Mortgage Loan for the Delay Delivery Mortgage Loan or (B) repurchase the
Delayed Delivery Mortgage Loan, which substitution or repurchase shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 (treating each Delay Delivery Mortgage Loan as a Deleted Mortgage Loan
for purposes of such Section 2.03); provided, however, that if the Seller
fails to deliver a Mortgage File for any Delay Delivery Mortgage Loan within
the twenty (20) day period provided in the prior sentence, the Seller shall
use its best reasonable efforts to effect a substitution, rather than a
repurchase of, such Deleted Mortgage Loan and provided further that the cure
period provided for in Section 2.02 or in Section 2.03 shall not apply to the
initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan,
but rather the Seller shall have five (5) Business Days to cure such failure
to deliver. At the end of such twenty (20) day period the Trustee shall send a
Delay Delivery Certification for the Delay Delivery Mortgage Loans delivered
during such twenty (20) day period in accordance with the provisions of
Section 2.02.
(d) Subject to the execution and delivery of the related Supplemental
Transfer Agreement as provided in Section 2.01(e) hereof and the terms and
conditions of this Agreement, the Seller sells, transfers, assigns, sets over
and otherwise conveys to the Depositor, without recourse, on each Supplemental
Transfer Date, all the right, title and interest of the Seller in and to the
Supplemental Mortgage Loans identified in such Supplemental Transfer
Agreement, including all interest and principal received and receivable by the
Seller on or with respect to such Supplemental Mortgage Loans on and after the
related Supplemental Cut-off Date (to the extent not applied in computing the
Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller, other than principal and interest due on such
Supplemental Mortgage Loans prior to the related Supplemental Cut-off Date.
Immediately upon the conveyance of the Supplemental Mortgage Loans
referred to in the preceding paragraph, the Depositor sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders, without recourse, all right title and interest in the
Supplemental Mortgage Loans.
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) On (x) the last Business Day of the month of the Closing Date and
(y) upon five (5) Business Days written notice to the Trustee, the Depositor,
the Master Servicer (if the Master Servicer is not the Seller) and the Rating
Agencies, on any other Business Day during the Conveyance Period designated by
the Seller; the Seller, the Depositor and the Trustee shall complete, execute
and deliver a Supplemental Transfer Agreement so long as no Rating Agency
36
has provided notice that the execution and delivery of such Supplemental
Transfer Agreement will result in a reduction or withdrawal of the any ratings
assigned to the Certificates. After the execution and delivery of such
Supplemental Transfer Agreement, on the Supplemental Transfer Date, the
Trustee shall set aside in the Supplemental Loan Account an amount equal to
the Aggregate Supplemental Purchase Amount.
The transfer of Supplemental Mortgage Loans and the other property
and rights relating to them on a Supplemental Transfer Date is subject to the
satisfaction of each of the following conditions:
(i) each Supplemental Mortgage Loan conveyed on such
Supplemental Transfer Date satisfies the representations and
warranties applicable to it under this Agreement; provided, however,
that with respect to a breach of a representation and warranty with
respect to a Supplemental Mortgage Loan, the obligation under Section
2.03(c) of this Agreement of the Seller to cure, repurchase or
replace such Supplemental Mortgage Loan shall constitute the sole
remedy against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee;
(ii) the Trustee, Countrywide Securities Corporation and the
Rating Agencies are provided with an Opinion of Counsel or Opinions
of Counsel with respect to the tax treatment of the Trust Fund, to be
delivered as provided pursuant to Section 2.01(f);
(iii) the Trustee, Countrywide Securities and the Rating
Agencies are provided with an Opinion of Counsel or Opinions of
Counsel with respect to the validity of the conveyance of the
Supplemental Mortgage Loans conveyed on such Supplemental Transfer
Date, to be delivered as provided pursuant to Section 2.01(f);
(iv) the execution and delivery of such Supplemental
Transfer Agreement or conveyance of the related Supplemental Mortgage
Loans does not result in a reduction or withdrawal of any ratings
assigned to the Certificates by the Rating Agencies;
(v) the Supplemental Mortgage Loans conveyed on such
Supplemental Transfer Date were selected in a manner reasonably
believed not to be adverse to the interests of the
Certificateholders;
(vi) no Supplemental Mortgage Loan conveyed on such
Supplemental Transfer Date was 30 or more days delinquent;
(vii) following the conveyance of the Supplemental Mortgage
Loans on such Supplemental Transfer Date to the Trust Fund, except as
provided below, the characteristics of the Mortgage Loans in Loan
Group 1 and Loan Group 3 will not vary by more than the amounts
indicated below; provided however that for the purpose of making
these calculations, the characteristics for any Initial Mortgage Loan
made will be taken as of the Initial Cut-off Date and the
characteristics for any Supplemental Mortgage Loan will be taken as
of the applicable Supplemental Date:
37
Characteristics Permitted Variance
Loan Group 1...............................................
Average Stated Principal Balance........................... $460,486 10%
Weighted Average Current Mortgage Rate..................... 5.885% 10 basis points
Weighted Average Loan-to-Value Ratio....................... 68.26% 5%
Weighted Average Remaining Term to Stated Maturity......... 359 months 2 months
Loan Group 3...............................................
Average Stated Principal Balance........................... $447,335 10%
Weighted Average Current Mortgage Rate..................... 6.223% 10 basis points
Weighted Average Loan-to-Value Ratio....................... 69.12% 5%
Weighted Average Remaining Term to Stated Maturity......... 360 months 2 months
(viii) neither the Seller nor the Depositor shall be
insolvent or shall be rendered insolvent as a result of such
transfer;
(ix) the Depositor shall have delivered to the Trustee an
Officer's Certificate confirming the satisfaction of each of these
conditions precedent; and
(x) the Supplemental Mortgage Loans in a Loan Group have the
same loan program as the Initial Mortgage Loans in that Loan Group;
provided, however, that with respect to a breach of a representation and
warranty with respect to a Supplemental Mortgage Loan set forth in clause (i)
above, the obligation under Section 2.03 of this Agreement of the Seller to
cure, repurchase or replace such Supplemental Mortgage Loan shall constitute
the sole remedy against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee.
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(f) Within seven Business Days after the final Supplemental Transfer
Date, upon (1) delivery to the Trustee by the Depositor or the Seller of the
Opinions of Counsel referred to in Sections 2.01(e)(ii) and (iii), (2)
delivery to the Trustee by the Seller of a revised Mortgage Loan Schedule
reflecting the Supplemental Mortgage Loans conveyed on such Supplemental
Transfer Date transferred to Loan Group 1 or Loan Group 3, as applicable, and
(3) delivery to the Trustee by the Depositor of an Officer's Certificate
confirming the satisfaction of each of the conditions precedent set forth in
Section 2.01(e) and (f), the Trustee shall pay the Seller the Aggregate
Supplemental Transfer Amount from those funds that were set aside in the
Supplemental Loan Account pursuant to Section 2.01(e). The positive
difference, if any, between the Aggregate Supplemental Transfer Amount and the
Supplemental Transfer Purchase Amount shall be reinvested by the Trustee in
the Supplemental Loan Account and shall remain designated as a portion of the
Loan Group 1 Supplemental Loan Amount or the Loan Group 3 Supplemental Loan
Amount, as applicable.
38
The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except
for its own receipt of documents specified above, and shall be entitled to
rely on the required Officer's Certificate.
Within thirty days after the last Supplemental Transfer Date, the
Depositor shall deliver to the Trustee a letter of a nationally recognized
firm of independent public accountants stating on a Loan Group basis whether
or not the Supplemental Mortgage Loans conveyed conform to the characteristics
in Section 2.01(e)(vi) and (vii).
(g) Neither the Seller nor the Depositor shall exercise any
discretion in the selection of the Supplemental Mortgage Loans to be conveyed
to the Trust Fund. On any Supplemental Transfer Date, the Supplemental
Mortgage Loans shall be selected for inclusion in the Trust Fund adhering to
the following procedures: first, the Supplemental Mortgage Loans will be
purchased in order by date of origination or acquisition by the Seller
(earliest originations first), second, purchases of Supplemental Mortgage
Loans originated or acquired on the same date shall be in alphabetical order,
starting with "a" and third, the Supplemental Mortgage Loans must satisfy the
eligibility requirements of Section 2.01(e). In no event shall the aggregate
of the Stated Principal Balance of all Supplemental Mortgage Loans as of the
related Supplemental Cut-off Date exceed the Supplemental Amount.
Once the potential Supplemental Mortgage Loans are identified in this
manner, the total potential loan pool shall be tested for compliance with the
pool characteristics covered by the representations and warranties in Section
2.01(e)(i) and (viii) after taking into account the addition of the potential
Supplemental Mortgage Loans. If any pool characteristic is outside any
permitted parameter by more than the variances permitted in Section
2.01(e)(viii), then beginning with the last Mortgage Loan initially identified
as a potential Supplemental Mortgage Loan and progressing in reverse order,
any potential Supplemental Mortgage Loan having a characteristic that is
outside of the permitted variance of a parameter violated by the total
potential loan pool shall be removed. Then additional Mortgage Loans shall be
added as provided in the preceding paragraph except that no Mortgage Loan
shall be added if it has a characteristic that is outside of the permitted
variance of a parameter violated by the total potential loan pool. This
procedure shall be repeated until the pool characteristics covered by the
representations and warranties in Section 2.01(e)(i) and (viii) are satisfied
within the variances permitted in Section 2.01(e)(viii) of each parameter
specified in those representations and warranties after taking into account
the addition of the potential Supplemental Mortgage Loans.
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 Master Servicer and the Seller an Initial Certification in the
form annexed hereto as Exhibit F.
39
Based on its review and examination, and only as to the documents identified
in such Initial Certification, the Trustee acknowledges that such documents
appear regular on their face and relate to such Initial 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.
On or about the thirtieth (30th) day after the Closing Date, the
Trustee shall deliver to the Depositor, the Master Servicer and the Seller a
Delay Delivery Certification with respect to the Initial Mortgage Loans in the
form annexed hereto as Exhibit G, with any applicable exceptions noted
thereon.
Not later than 90 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer and the Seller a Final
Certification with respect to the Initial 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
Master 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
40
respect thereto in the form of Exhibit N hereto, the Trustee shall release the
related Mortgage File to the Seller and shall execute and deliver at the
Seller's request such instruments of transfer or assignment 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 Initial Mortgage Loan that is a MERS Mortgage Loan, the Master
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) Upon delivery of the Supplemental Mortgage Loans pursuant to
Supplemental Transfer Agreement, the Trustee shall acknowledge receipt of the
documents identified in any Supplemental Certification in the form annexed
hereto as Exhibit F-2 and declare that it will hold such documents and the
other documents delivered to it constituting the Mortgage Files, and that it
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 Supplemental
Transfer Date to the Depositor, the Master Servicer and the Seller a
Supplemental Certification in the form annexed hereto as Exhibit F-1. Based on
its review and examination, and only as to the documents identified in such
Supplemental Certification, the Trustee shall acknowledge that such documents
appear regular on their face and relate to such Supplemental 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.
On or about the twentieth (20th) day after the Supplemental Transfer
Date, the Trustee shall deliver to the Depositor, the Master Servicer and the
Seller a Delay Delivery Certification with respect to the Supplemental
Mortgage Loans in the form annexed hereto as Exhibit G, with any applicable
exceptions noted thereon.
Not later than 90 days after the final Supplemental Transfer Date,
the Trustee shall deliver to the Depositor, the Master Servicer and the Seller
a Final Certification with respect to the Supplemental Mortgage Loans in the
form annexed hereto as Exhibit H, with any applicable exceptions noted
thereon.
If, in the course of such review of the Mortgage Files relating to
the Supplemental Mortgage Loans, 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
41
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 Master 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 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 a Supplemental Mortgage
Loan that is a MERS Mortgage Loan, the Master 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.
(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 Master 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
Master 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.
42
SECTION 2.03. Representations, Warranties and Covenants of the Seller
and Master Servicer.
(a) The Seller hereby makes the representations and warranties set
forth in (i) Schedule II hereto, and by this reference incorporated herein to
the Master Servicer, the Depositor and the Trustee, as of the Closing Date and
(ii) Schedule IV hereto, and by this reference incorporated herein, to the
Depositor, the Master Servicer and the Trustee, as of the Closing Date, or if
so specified therein, as of the as of the Initial Cut-off Date with respect to
the Initial Mortgage Loans and as of the related Supplemental Cut-off Date
with respect to the Supplemental Mortgage Loans.
(b) The Master Servicer hereby makes the representations and
warranties set forth in Schedule III hereto, and by this reference
incorporated herein, to the Depositor, the Seller and the Trustee, as of the
Closing Date.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(a)(ii) or a breach of
a representation or warranty with respect to a Supplemental Mortgage Loan
under Section 2.01 (e)(i) 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 Section 2.03(a)(ii) and with respect to a breach of a
representation and warranty with respect to a Supplemental Mortgage Loan under
Section 2.01(e)(i) that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects, and if such breach is not so cured, shall, (i) if such
90-day period expires prior to the second anniversary of the Closing Date,
remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a 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 Master Servicer and the Trustee
for any expenses reasonably incurred by the Master Servicer or the Trustee in
respect of enforcing the remedies for such breach. 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
43
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 Master Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans
and the Master 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 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 Master 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
44
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.
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 Initial 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 Initial Mortgage Loans to it by the Seller, the Depositor had good title
to the Initial Mortgage Loans and the Mortgage Notes were subject to no
offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the Trustee
all of its rights with respect to the Mortgage Loans including, without
limitation, the representations and warranties of the Seller made pursuant to
Section 2.03(a)(ii) hereof, together with all rights of the Depositor to
require the Seller to cure any breach thereof or to repurchase or substitute
for any affected Mortgage Loan in accordance with this Agreement.
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
Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively,
or (ii) cause any 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 Master Servicer,
or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within 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 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
45
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 Master Servicer.
The Master Servicer hereby covenants to the Depositor and the Trustee
as follows:
(A) the Master Servicer shall comply in the performance of
its obligations under this Agreement with all reasonable
rules and requirements of the insurer under each Required
Insurance Policy; and
(B) no written information, certificate of an officer,
statement furnished in writing or written report delivered
to the Depositor, any affiliate of the Depositor or the
Trustee and prepared by the Master Servicer pursuant to this
Agreement will contain any untrue statement of a material
fact or omit to state a material fact necessary to make such
information, certificate, statement or report not
misleading.
46
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer
shall service and administer the Mortgage Loans in accordance with 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 Master Servicer shall have full power and authority, acting alone and/or
through Subservicers as provided in Section 3.02 hereof, subject to the terms
hereof (i) to execute and deliver, on behalf of the Certificateholders and the
Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages (but only in the manner provided in this
Agreement), (iii) to collect any Insurance Proceeds and other Liquidation
Proceeds, and (iv) to effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property securing any Mortgage Loan; provided that
the Master 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 Master 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 Master
Servicer, in its own name or in the name of the Depositor and the Trustee, is
hereby authorized and empowered by the Depositor and the Trustee, when the
Master Servicer believes it appropriate in its reasonable judgment, to execute
and deliver, on behalf of the Trustee, the Depositor, the Certificateholders
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments,
with respect to the Mortgage Loans, and with respect to the Mortgaged
Properties held for the benefit of the Certificateholders. The Master Servicer
shall prepare and deliver to the Depositor and/or the Trustee such documents
requiring execution and delivery by either or both of them as are necessary or
appropriate to enable the Master Servicer to service and administer the
Mortgage Loans to the extent that the Master 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 Master Servicer. The Master Servicer further
is authorized and empowered by the Trustee, on behalf of the
Certificateholders and the Trustee, in its own name or in the name of the
Subservicer, when the Master Servicer or the Subservicer, as the case may be,
believes it appropriate in its best judgment to register any Mortgage Loan on
the MERS(R) System, or cause the removal from the registration of any Mortgage
Loan on the MERS(R) System, to execute and deliver, on behalf of the Trustee
and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns.
47
In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further
as provided in Section 3.08. The costs incurred by the Master Servicer, if
any, in effecting the timely payments of taxes and assessments on the
Mortgaged Properties and related insurance premiums shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be added to
the Stated Principal 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 Master Servicer may arrange for the subservicing of any
Mortgage Loan by a Subservicer pursuant to a subservicing agreement; provided,
however, that such subservicing arrangement and the terms of the related
subservicing agreement must provide for the servicing of such Mortgage Loans
in a manner consistent with the servicing arrangements contemplated hereunder.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Notwithstanding the provisions of any subservicing agreement, any of
the provisions of this Agreement relating to agreements or arrangements
between the Master Servicer and a Subservicer or reference to actions taken
through a Subservicer or otherwise, the Master Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or
liability by virtue of such subservicing agreements or arrangements or by
virtue of indemnification from the Subservicer and to the same extent and
under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. All actions of each
Subservicer performed pursuant to the related subservicing agreement shall be
performed as an agent of the Master Servicer with the same force and effect as
if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be
deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a Subservicer regardless of whether
such payments are remitted by the Subservicer to the Master Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of
the Master Servicer.
The Depositor may, but is not obligated to, enforce the obligations
of the Master Servicer hereunder and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
hereunder and in connection with any such defaulted obligation to exercise the
related rights of the Master Servicer hereunder; provided that the Master
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 Master Servicer nor shall the Trustee or the Depositor
be obligated to supervise the performance of the Master Servicer hereunder or
otherwise.
48
SECTION 3.04. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer
be the Master Servicer hereunder (including by reason of an Event of Default),
the Trustee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.09 hereof or any acts or omissions of the predecessor Master
Servicer hereunder), (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder including, 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 Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and warranties of
the Master Servicer hereunder). Any such assumption shall be subject to
Section 7.02 hereof. If the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default), the Trustee
or its successor shall succeed to any rights and obligations of the Master
Servicer under each subservicing agreement.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement 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; Supplemental Loan Account; Capitalized Interest
Account.
(a) The Master 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 Master Servicer may in its
discretion (i) waive any late payment charge or any prepayment charge or
penalty interest in connection with the prepayment of a Mortgage Loan and (ii)
extend the due dates for payments due on a Mortgage Note for a period not
greater than 180 days; provided, however, that the Master 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 Master 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 Master Servicer shall not be required to institute or join
in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law.
(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited
no later than two Business Days after
49
receipt (or, if the current long-term credit rating of Country Home Loans is
reduced below "A-" by S&P or "A3" by Xxxxx'x, the Master Servicer shall
deposit or cause to be deposited on a daily basis within one Business Day of
receipt), except as otherwise specifically provided herein, the following
payments and collections remitted by Subservicers or received by it in respect
of Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest due on the Mortgage Loans 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 Master Servicing Fee;
(iii) all Insurance Proceeds and Liquidation Proceeds, other
than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
the Master Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.09(c) 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 Master Servicer pursuant to
Section 4.01; and
(viii) any other amounts required to be deposited hereunder.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Master Servicer shall cause
funds to be deposited into the Certificate Account in an amount required to
cause an amount of interest to be paid with respect to such Mortgage Loan
equal to the amount of interest that has accrued on such Mortgage Loan from
the preceding Due Date at the Mortgage Rate net of the related Master
Servicing Fee.
The foregoing requirements for remittance by the Master 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, if collected, need not be remitted by
the Master Servicer. In the event that the Master Servicer shall remit any
amount not required to be remitted, 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 Master Servicer shall maintain adequate records with respect to
all
50
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 Master Servicer to
the Trustee pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Master Servicer 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 Master 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 Master Servicer.
(e) Each institution at which the Certificate Account, the
Supplemental Loan Account, Capitalized Interest Account or the Distribution
Account is maintained shall invest the funds therein as directed in writing by
the Master Servicer in Permitted Investments, which shall mature not later
than (i) in the case of the Certificate Account, Capitalized Interest Account
or the Supplemental Loan Account, the second Business Day next preceding the
related Distribution Account Deposit Date (except that if such Permitted
Investment is an obligation of the institution that maintains such account,
then such Permitted Investment shall mature not later than the Business Day
next preceding such Distribution Account Deposit Date) and (ii) in the case of
the Distribution Account, the 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. 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, or the Distribution Account shall be for the benefit of the Master
Servicer as servicing compensation 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 Master Servicer in the
Certificate Account or paid to the Trustee for deposit into the Distribution
Account, as applicable. The Trustee in its fiduciary capacity shall not be
liable for the amount of any loss incurred in respect of any investment or
lack of investment of funds held in the
51
Certificate Account, the Supplemental Loan Account, Capitalized Interest
Account or the Distribution Account and made in accordance with this Section
3.05.
(f) The Master 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 Master Servicer, the Seller, each Rating Agency and the
Depositor of any proposed change of the location of the Distribution Account,
Supplemental Loan Account or the Capitalized Interest Account prior to any
change thereof.
(g) The Trustee shall establish and maintain, on behalf of
Certificateholders, the Supplemental Loan Account. On the Closing Date the
Seller shall remit the Supplemental Amount to the Trustee for deposit in the
Supplemental Loan Account. On each Supplemental Transfer Date, upon
satisfaction of the conditions for such Supplemental Transfer Date set forth
in Section 2.01(e), with respect to the related Supplemental Transfer
Agreement, the Trustee shall pay to the Seller the Aggregate Supplemental
Transfer Amount held in escrow pursuant to Section 2.01(e) as payment of the
purchase price for the related Supplemental Mortgage Loans. If at any time the
Depositor becomes aware that the Cut-off Date Stated Principal Balance of
Supplemental Mortgage Loans reflected on any Supplemental Transfer Agreement
exceeds the actual Cut-off Date Stated Principal Balance of the relevant
Supplemental Mortgage Loans, the Depositor may so notify the Trustee and the
Trustee shall redeposit into the Supplemental Loan Account the excess reported
to it by the Depositor.
If any funds remain in the Supplemental Loan Account at the end of
the Conveyance Period, to the extent that they represent earnings on the
amounts originally deposited into the Supplemental Loan Account, the Trustee
shall distribute them to the order of the Depositor.
(h) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Capitalized Interest Account. On the Closing Date the
Seller shall remit the aggregate Capitalized Interest Requirement to the
Trustee for deposit in the Capitalized Interest Account. On each Distribution
Account Deposit Date related to a Conveyance Period Distribution Date, upon
satisfaction of the conditions for such Supplemental Transfer Date set forth
in Section 2.01(e), with respect to the related Supplemental Transfer
Agreement, the Trustee shall transfer from the Capitalized Interest Account to
the Distribution Account an amount equal to the Capitalized Interest
Requirement (which, to the extent required, may include investment earnings on
amounts on deposit therein) with respect to the amount remaining in the
Supplemental Loan Account for the related Distribution Date as identified by
the Seller in the Supplemental Transfer Agreement.
If any funds remain in the Capitalized Interest Account at the end of
the Conveyance Period, the Trustee shall make the transfer described in the
preceding paragraph if necessary for the remaining Conveyance Period
Distribution Date and the Trustee shall distribute any remaining funds in the
Capitalized Interest Account to the order of the Depositor.
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 Master Servicer shall establish and maintain one
or more accounts (each, an "Escrow
52
Account") and deposit and retain therein all collections from the Mortgagors
(or advances by the Master Servicer) for the payment of taxes, assessments,
hazard insurance premiums or comparable items for the account of the
Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
(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 Master Servicer out of related collections for any payments made
pursuant to Sections 3.01 hereof (with respect to taxes and assessments and
insurance premiums) and 3.09 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 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 Master 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 Master Servicer shall be required so to advance only to the extent that
such advances, in the good faith judgment of the Master Servicer, will be
recoverable by the Master Servicer out of Insurance Proceeds, Liquidation
Proceeds or otherwise.
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage
Loans and all accounts, insurance 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 Master Servicer.
Upon reasonable advance notice in writing, the Master 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 Master Servicer shall be entitled to be reimbursed by each
such Certificateholder for actual expenses incurred by the Master Servicer in
providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate Account and
the Distribution Account.
(a) The Master Servicer may from time to time make withdrawals from
the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not
previously retained by the Master Servicer) the servicing
compensation to which it is entitled pursuant to Section 3.14 and to
pay to the Master Servicer, as additional servicing compensation,
53
earnings on or investment income with respect to funds in or credited
to the Certificate Account;
(ii) to reimburse the Master 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 Master Servicer for any
Nonrecoverable Advance previously made;
(iv) to reimburse the Master Servicer for Insured Expenses
from the related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a) unreimbursed
Servicing Advances, the Master 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 Master
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 Master 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; and
(ix) on or prior to the Distribution Account Deposit Date,
to withdraw an amount equal to the related Available Funds and the
Trustee Fee for such Distribution Date and remit 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 Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to such subclauses (i), (ii),
(iv), (v) and (vi). Prior to making any withdrawal from the Certificate
Account pursuant to subclause (iii), the Master Servicer shall deliver to the
Trustee an Officer's Certificate of a Servicing Officer indicating the amount
of any previous Advance determined by the Master Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage 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
54
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 the Trustee Fee for the related
Distribution Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds
in the Distribution Account;
(iii) to withdraw and return to the Master Servicer any
amount deposited in the Distribution Account and not required to be
deposited therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan 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 Master
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 Master Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. Any cost incurred
by the Master Servicer in maintaining any such insurance shall not, for the
purpose of calculating monthly distributions to the Certificateholders or
remittances to the Trustee for their benefit, be added to the principal
balance of the Mortgage Loan, notwithstanding that the terms of the Mortgage
Loan so permit. Such costs shall be recoverable by the Master Servicer out of
late payments by the related Mortgagor or out of Liquidation Proceeds to the
extent permitted by Section 3.08 hereof. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor or
maintained on property acquired in respect of a Mortgage other than pursuant
to such applicable laws and regulations as shall at any time be in force and
as shall require such additional insurance. If the Mortgaged Property is
located at the time of origination of the Mortgage Loan in a federally
designated special flood hazard area and such area is participating in the
national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the 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) [Reserved]
(c) The Master 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
55
Master Servicer, would have been covered thereunder. The Master 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.
Except with respect to any Lender PMI Mortgage Loans, the Master
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. With respect to the Lender PMI Mortgage Loans,
the Master Servicer shall maintain the Primary Insurance Policy for the life
of such Mortgage Loans, unless otherwise prohibited by law.
The Master 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 Master Servicer from the related
liquidation proceeds.
(d) In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present on behalf of itself, the
Trustee and 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 Master
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 Master Servicer
shall to the extent that it has knowledge of such conveyance, enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Master
Servicer is not required to exercise such rights with respect to a Mortgage
Loan if the Person to whom the related Mortgaged Property has been conveyed or
is proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that
the Master Servicer is prohibited by law from enforcing any such due-on-sale
clause, or if coverage under any Required Insurance Policy would be adversely
affected, or if nonenforcement is otherwise permitted hereunder, the Master
Servicer is authorized, subject to Section 3.10(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 Master Servicer
enters such agreement) by the applicable Required Insurance Policies. The
Master Servicer, subject to Section 3.10(b), is also authorized with the prior
approval of the
56
insurers under any Required Insurance Policies to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Mortgage Note. Notwithstanding the foregoing, the
Master Servicer shall not be deemed to be in default under this Section by
reason of any transfer or assumption which the Master Servicer reasonably
believes it is restricted by law from preventing, for any reason whatsoever.
(b) Subject to the Master 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 Master
Servicer shall prepare and deliver or cause to be prepared and delivered to
the Trustee for signature and shall direct, in writing, the Trustee to execute
the assumption agreement with the Person to whom the Mortgaged Property is to
be conveyed and such modification agreement or supplement to the Mortgage Note
or Mortgage or other instruments as are reasonable or necessary to carry out
the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In connection with any such assumption, no material
term of the Mortgage Note may be changed. In addition, the substitute
Mortgagor and the Mortgaged Property must be acceptable to the Master Servicer
in accordance with its underwriting standards as then in effect. Together with
each such substitution, assumption or other agreement or instrument delivered
to the Trustee for execution by it, the Master 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
Master Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of
the original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans.
The Master Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments.
In connection with such foreclosure or other conversion, the Master Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in its general mortgage servicing
activities and meet the requirements of the insurer under any Required
Insurance Policy; provided, however, that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of
the Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Certificate
57
Account). The Master 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 Master Servicer has knowledge that a Mortgaged
Property which the Master 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 Master Servicer, the Master Servicer will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance
with its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or 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 Master 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 Master Servicer shall either itself or
through an agent selected by the Master Servicer protect and conserve such REO
Property in the same manner and to such extent as is customary in the locality
where such REO Property is located and may, incident to its conservation and
protection of the interests of the Certificateholders, rent the same, or any
part thereof, as the Master Servicer deems to be in the best interest of the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the maintenance
of such REO Property at such times as is necessary to enable the Trustee to
comply with the reporting requirements of the REMIC Provisions. The net
monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding 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 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 Master 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, and 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
58
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
Master 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 Master 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 Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of
bringing such a proceeding. The income earned from the management of any REO
Properties, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Master Servicing Fees, Advances and Servicing Advances,
shall be applied to the payment of principal of and interest on the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Certificate Account. To
the extent the 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.
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 Master Servicer for any related unreimbursed
Servicing Advances and Master Servicing Fees; second, to reimburse the Master
Servicer for any unreimbursed Advances; third, to reimburse the Certificate
Account for any Nonrecoverable Advances (or portions thereof) that were
previously withdrawn by the Master 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 Master Servicer as additional servicing
compensation pursuant to Section 3.14.
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust Fund any Mortgage Loan which is
151 days or more delinquent at a price
59
equal to the Purchase Price; provided, however, that the Master Servicer may
only exercise this right on or before the next to the last day of the calendar
month in which such Mortgage Loan became 151 days delinquent (such month, the
"Eligible Repurchase Month"); provided further, that any such Mortgage Loan
which becomes current but thereafter becomes delinquent may be purchased by
the Master Servicer pursuant to this Section in any ensuing Eligible
Repurchase Month. The Purchase Price for any Mortgage Loan purchased hereunder
shall be deposited in the Certificate Account and the Trustee, upon receipt of
a certificate from the Master Servicer in the form of Exhibit N hereto, shall
release or cause to be released to the purchaser of such Mortgage Loan the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser of such Mortgage Loan, in
each case without recourse, as shall be necessary to vest in the purchaser of
such Mortgage Loan any Mortgage Loan released pursuant hereto and the
purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation
to the Trustee or the Certificateholders with respect thereto.
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will 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 Master
Servicer, and the Trustee shall at the Master Servicer's direction execute and
deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Master
Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. The Master Servicer is authorized to cause the removal
from the registration on the MERS(R) System of such Mortgage and to execute
and deliver, on behalf of the 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
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 Master Servicer. Subject to the further limitations
set forth below, the Master Servicer shall cause the Mortgage File or
documents so released to be returned to the Trustee when the need therefor by
the Master Servicer no longer exists, unless the Mortgage Loan is liquidated
and the proceeds thereof are deposited in the Certificate Account, in which
case the Master Servicer shall deliver to the Trustee a Request for Release in
the form of Exhibit N, signed by a Servicing Officer.
60
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this
Agreement, the Master Servicer shall deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity.
SECTION 3.13. Documents Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or which otherwise
are collected by the Master Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, the Master Servicer in respect
of any Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, including but not limited to, any funds
on deposit in the Certificate Account, shall be held by the Master Servicer
for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trustee, subject to the applicable provisions of
this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, Distribution Account 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 Master Servicer shall be entitled to set off against and deduct from any
such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
SECTION 3.14. Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain or withdraw from the Certificate Account an amount
equal to the Master Servicing Fee; provided, that the aggregate Master
Servicing Fee with respect to any Distribution Date shall be reduced (i) by an
amount equal to the aggregate of the Prepayment Interest Shortfalls, if any,
with respect to such Distribution Date, but not below an amount equal to (a)
with respect to the Mortgage Loans in Loan Group 1, Loan Group 2, Loan Group 3
and Loan Group 4, by not by more than one-half of the Master Servicing Fee,
(b) with respect to the Mortgage Loans in Loan Group 5, by not more than
one-half of the portion of the Master Servicing Fee attributable to the direct
servicing of each Mortgage Loan, before reduction thereof in respect of such
Prepayment Interest Shortfalls, and (ii) an amount equal to any amount to be
deposited into the Distribution Account by the Depositor pursuant to Section
2.01(a) and not so deposited.
Additional servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, prepayment penalties, assumption fees, late
payment charges and all income and gain net of any losses realized from
Permitted Investments shall be retained by the Master Servicer to the
61
extent not required to be deposited in the Certificate Account pursuant to
Section 3.05 hereof. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its master 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 Master 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
Master Servicer. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation
shall not constitute a breach of this Section.
SECTION 3.16. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the Trustee on
or before 120 days after the end of the Master 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 Master Servicer
during the preceding calendar year and of the performance of the Master
Servicer under this Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Master Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officer and
the nature and status thereof. The Trustee shall forward a copy of each such
statement to each Rating Agency.
SECTION 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before 120 days after the end of the Master Servicer's fiscal
year, commencing with its 2002 fiscal year, the Master Servicer at its expense
shall cause a nationally or regionally recognized firm of independent public
accountants (who may also render other services to the Master 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
62
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
Master Servicer's expense, provided that such statement is delivered by the
Master Servicer to the Trustee.
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall for so long as it acts as master 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 Master Servicer hereunder and (b) a fidelity bond in respect of its
officers, employees and agents. Each such policy or policies and bond shall,
together, comply with the requirements from time to time of FNMA or FHLMC for
persons performing servicing for mortgage loans purchased by FNMA or FHLMC. In
the event that any such policy or bond ceases to be in effect, the Master
Servicer shall 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.
SECTION 3.19. Notification of Adjustments.
On each Adjustment Date, the Master Servicer shall make
interest rate adjustments for each Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note and applicable
regulations. The Master Servicer shall execute and deliver the notices
required by each Mortgage and Mortgage Note and applicable regulations
regarding interest rate adjustments. The Master Servicer also shall provide
timely notification to the Trustee of all applicable data and information
regarding such interest rate adjustments and the Master Servicer's methods of
implementing such interest rate adjustments. Upon the discovery by the Master
Servicer or the Trustee that the Master Servicer has failed to adjust or has
incorrectly adjusted a Mortgage Rate or a monthly payment pursuant to the
terms of the related Mortgage Note and Mortgage, the Master Servicer shall
immediately deposit in the Certificate Account from its own funds the amount
of any interest loss caused thereby without reimbursement therefor; provided,
however, the Master Servicer shall be held harmless with respect to any
interest rate adjustments made by any servicer prior to the Master Servicer.
63
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances.
The Master Servicer shall determine on or before each Master Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make
an Advance, it shall, on or before the Master Servicer Advance Date, either
(i) deposit into the Certificate Account an amount equal to the Advance or
(ii) make an appropriate entry in its records relating to the Certificate
Account that any Amount Held for Future Distribution has been used by the
Master Servicer in discharge of its obligation to make any such Advance. Any
funds so applied shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the next Master
Servicer Advance Date. The Master Servicer shall be entitled to be reimbursed
from the Certificate Account for all Advances of its own funds made pursuant
to this Section as provided in Section 3.08. The obligation to make Advances
with respect to any Mortgage Loan shall continue if such Mortgage Loan has
been foreclosed or otherwise terminated and the related Mortgaged Property has
not been liquidated.
The Master Servicer shall deliver to the Trustee on the related
Master Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
SECTION 4.02. 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 and Components of Group 1 Senior Certificates in the following order
and priority and, in each case, to the extent of such funds remaining:
(i) [Reserved];
(ii) concurrently, to each Class and Component of Group 1
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount for such
Distribution Date, any shortfall being allocated among such Classes
and Components 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 Group 1 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 1
for such Distribution Date, will be distributed
sequentially, to the Class A-R
64
and Class 1-A-1 Certificates, in that order, until their
respective Class Certificate Balances are reduced to zero;
(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 and Components of Group 2 Senior Certificates in the following order
and priority and, in each case, to the extent of such funds remaining:
(i) [Reserved];
(ii) concurrently, to each Class and Component of Group 2
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount for such
Distribution Date, any shortfall being allocated among such Classes
and Components 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 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;
(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 and Components of Group 3 Senior Certificates in the following order
and priority and, in each case, to the extent of such funds remaining:
(i) [Reserved];
(ii) concurrently, to each Class and Component of Group 3
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount for such
Distribution Date, any shortfall being allocated among such Classes
and Components 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 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
concurrently, as follows:
65
(0) 00.0000000000% to the Class 3-A-1
Certificates, until its Class Certificate Balance
is reduced to zero; and
(0) 00.0000000000%, sequentially, to the
Class 3-A-2 and Class 3-A-3 Certificates, in that
order, until their respective Class Certificate
Balances are reduced to zero;
(4) With respect to the Available Funds for Loan Group 4, 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 and Components of Group 4 Senior Certificates in the following order
and priority and, in each case, to the extent of such funds remaining:
(i) [Reserved];
(ii) concurrently, to each Class and Component of Group 4
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes and Components 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 Group 4 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 4
for such Distribution Date, will be distributed to the Class
4-A-1 Certificates, until its Class Certificate Balance is
reduced to zero;
(5) With respect to the Available Funds for Loan Group 5, 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 and Components of Group 5 Senior Certificates in the following order
and priority and, in each case, to the extent of such funds remaining:
(i) [Reserved];
(ii) concurrently, to each Class and Component of Group 5
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes and Components 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 Group 5 Senior Certificates,
concurrently as follows:
(x) [Reserved]; and
66
(y) the related Principal Amount, up to the amount
of the Senior Principal Distribution Amount for Loan Group 5
for such Distribution Date, will be distributed to the Class
5-A-1 Certificates, until its Class Certificate Balance is
reduced to zero;
(7) [Reserved]; and
(8) On each Distribution Date, Available Funds from all Loan Groups
remaining after making the distributions described in Section 4.02(a)(1),
Section 4.02(a)(2), Section 4.02(a)(3), Section 4.02(a)(4) and Section
4.02(a)(5) 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;
(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;
67
(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;
(M) [Reserved]; and
(N) to the Class A-R Certificates, any remaining
funds in the Trust Fund.
(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 by (i) the related Class', as the case may be, pro
rata share of Net Prepayment Interest Shortfalls for such Loan Group based (x)
with respect to a Class of Senior Certificates, on the related Class Optimal
Interest Distribution Amount for such Distribution Date, and (y) with respect
to a Class of Subordinated Certificates on and prior to the fourth Senior
Termination Date on the Assumed Interest Amount or after such fourth Senior
Termination Date, the related Class Optimal Interest Distribution Amount for
such Distribution Date in the absence of such Net Prepayment Interest
Shortfalls, 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 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 Loss 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
68
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of the
Due Date in such month over the amount of 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)(8), 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)(8). 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.
(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]
(ii) (A) any Realized Loss (other than an Excess Loss) on
the Mortgage Loans 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 of the related Senior Certificate Group (other than any
Notional Amount Certificates), if applicable, pro rata, on the basis
of their respective Class Certificate Balances or, on the basis of
the lesser of their Class Certificate Balance and their initial Class
Certificate Balance, in each case immediately prior to the related
Distribution Date until the respective Class Certificate Balance of
each such Class is been reduced to zero; and
(B) any Excess Losses on the Mortgage Loans in a Loan Group
shall be allocated to the Classes of Certificates of the related
Senior Certificate Group (other than a Loan Group's related Component
Notional Amount (if any)) and the Subordinated Certificates then
outstanding, pro rata, on the basis of, with respect to such Senior
69
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 Realized Loss occurs;
provided, however, on any Distribution Date after the fourth 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; and provided
further that after the Senior Credit Support Depletion Date, such
Excess Losses shall be allocated, pro rata, to all Senior
Certificates (other than a Loan Group's related Component Notional
Amount (if any)) regardless of Senior Certificate Group on the basis
of their respective initial 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 Pool
Stated Principal Balance 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
to Section 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 to any
Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 4.04(b) above shall be accomplished by reducing the
Certificate Balance or Component Notional Amount thereof, as applicable,
immediately following the distributions made on the related Distribution Date
in accordance with the definition of "Certificate Balance." or "Component
Balance," as the case may be.
SECTION 4.05. Cross-Collateralization; Adjustments to Available Funds
On each Distribution Date prior to the Senior Credit Support
Depletion Date, but after the date on which the aggregate Class Certificate
Balance of Senior Certificates has been reduced to zero, the Trustee shall
distribute the principal portion of Available Funds on the Mortgage Loans
relating to such Senior Certificates that will have been paid in full, to the
holders of the Senior Certificates of the other Certificate Groups, pro rata,
based on Class Certificate Balances, provided, however, that the Trustee shall
not make such distribution on such Distribution Date if (a) the Aggregate
Subordinated Percentage for such Distribution Date is greater than or equal to
200% of such Aggregate Subordinated Percentage as of the Closing Date and (b)
the average outstanding principal balance of the Mortgage Loans in each Loan
Group delinquent 60 days or more over the last six months, as a percentage of
the related Subordinate Component Balance, is less than 50%.
If on any Distribution Date the Class Certificate Balance of Senior
Certificates is greater than the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group (the "Undercollateralized Group"),
then the Trustee shall reduce the Available Funds of the other
70
related Loan Groups that are not undercollateralized (the "Overcollateralized
Groups"), as follows:
(1) to add to the Available Funds of each Undercollateralized Group
an amount equal to the lesser of (a) one month's interest on the
Transfer Payment of each Undercollateralized Group at the
Pass-Through Rate applicable to the Undercollateralized Group(s) and
(b) Available Funds of the Overcollateralized Group(s) remaining
after making distributions to the Certificates of the
Overcollateralized Group(s) on such Distribution Date pursuant to
Section 4.02; and
(2) to the Senior Certificates of each Undercollateralized Group, to
the extent of the principal portion of Available Funds of the
Overcollateralized Group(s) remaining after making distributions to
the Senior Certificates of the Overcollateralized Group(s) on such
Distribution Date pursuant to Section 4.02, until the Class
Certificate Balance of the Senior Certificates of such
Undercollateralized Group(s) equals the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group(s), any
shortfall of such Available Funds to be allocated among such
Undercollateralized Group(s), pro rata, based upon the respective
Transfer Payments.
The Transfer Payment received by the Undercollateralized Group is
referred to as a "Transfer Payment Received." The Transfer Payment made by the
Overcollateralized Group is referred to as a "Transfer Payment Made."
If more than one Overcollateralized Group exists on any Distribution
Date, reductions in the Available Funds of such groups to make the payments
required to be made pursuant to Section 4.05(b) on such Distribution Date
shall be made pro rata, based on the amount of payments required to be made to
the Undercollateralized Group(s).
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
Master 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
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Deferred
Interest, any Class Unpaid Interest Amounts included in such
distribution and any remaining Class Unpaid Interest Amounts after
giving effect to such distribution;
(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;
71
(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 Master Servicing Fees paid to or
retained by the Master 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;
(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) with respect to the second Distribution Date, the
number and aggregate balance of any Delay Delivery Mortgage Loans not
delivered within thirty days after the Closing Date.
The Trustee may make the above information available to Certificateholders via
the Trustee's website at xxxx://xxx.xxxxxxxxxxxx.xxx.
72
(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 Master 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 Master Servicer shall deliver to the
Trustee (which delivery may be by electronic data transmission) a report in
substantially the form set forth as Schedule VI hereto.
(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]
73
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) a
Notional Amount Certificate, (B) 100% of the Class Certificate Balance of any
Class of Certificates or (C) 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 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.
74
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 and subsequently destroyed by the Trustee in accordance
with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under 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 each
certify to the Trustee in writing the facts surrounding the transfer in
substantially the forms set forth in Exhibit J (the "Transferor Certificate")
and (i) deliver a letter in substantially the form of either Exhibit K (the
"Investment Letter") or Exhibit L (the "Rule 144A Letter") or (ii) there shall
be delivered to the Trustee at the expense of the 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 Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor, the Seller and the Master
Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless
the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate or a Residual Certificate, such requirement is satisfied only by
the
75
Trustee's receipt of a representation letter from the transferee substantially
in the form of Exhibit K or Exhibit L, or in the event such Certificate is a
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, or 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
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of 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 Private Certificate or 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.
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
76
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 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 Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC
at any time that the Certificates are outstanding or result in the imposition
of any tax on the Trust Fund, a Certificateholder or another Person. Each
Person holding or acquiring any Ownership Interest in a 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
77
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 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
Master 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 Master 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
78
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 Master Servicer and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, 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 Master Servicer, the Trustee and any agent of the Master Servicer
or the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the
contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the
receipt of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of 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
79
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.
80
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Master
Servicer.
The Depositor and the Master 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 Master
Servicer.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement. The Master Servicer will keep in
effect its existence, rights and franchises as a limited partnership under the
laws of the United States or under the laws of one of the states thereof and
will obtain and preserve its qualification or registration to do business as a
foreign partnership in each jurisdiction in which such qualification or
registration is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may be
merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party,
or any person succeeding to the business of the Depositor or the Master
Servicer, shall be the successor of the Depositor or the Master 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 Master Servicer shall be qualified to service mortgage
loans on behalf of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the Seller,
the Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the 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 Master
Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the Depositor, the Seller, the Master
Servicer or any such Person from any liability 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 Master Servicer and any
director, officer, employee or agent of the Depositor, the Seller or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Seller, the Master Servicer and any director,
officer, employee or
81
agent of the Depositor, the Seller or the Master Servicer shall be indemnified
by the Trust Fund and held harmless against any loss, liability or expense
incurred in connection with any audit, controversy or judicial proceeding
relating to a governmental taxing authority or any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Seller or the Master Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its respective duties hereunder and which in its opinion
may involve it in any expense or liability; provided, however, that any of the
Depositor, the Seller or the Master Servicer may in its discretion undertake
any such action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall
be expenses, costs and liabilities of the Trust Fund, and the Depositor, the
Seller and the Master Servicer shall be entitled to be reimbursed therefor out
of the Certificate Account.
SECTION 6.04. Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (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 Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until the Trustee or a successor
master servicer shall have assumed the Master Servicer's responsibilities,
duties, liabilities and obligations hereunder.
82
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 Master 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 Master Servicer
by the Trustee or the Depositor or to the Master 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 Master Servicer to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer contained in this
Agreement, 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 Master Servicer by the Trustee or the
Depositor, or to the Master Servicer and the Trustee by the Holders
of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; provided, however, that the sixty-day
cure period shall not apply to the initial delivery of the Mortgage
File for Delay Delivery Mortgage Loans nor the failure to substitute
or repurchase in lieu thereof; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to
take advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations.
If an Event of Default 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 Trustee shall by notice
in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations
83
of the Master Servicer under this Agreement and in and to the Mortgage Loans
and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On and after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee. The Trustee shall thereupon make any Advance which the Master
Servicer failed to make subject to Section 4.01 hereof whether or not the
obligations of the Master Servicer have been terminated pursuant to this
Section. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, whether to complete the transfer and endorsement or assignment
of the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article
VIII. The Master Servicer agrees to cooperate with the Trustee in effecting
the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee of all
cash amounts which shall at the time be credited to the Certificate Account,
or thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master 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 Master Servicer's rights and obligations
as Master Servicer hereunder and received after such notice, that portion
thereof to which such Master Servicer would have been entitled pursuant to
Sections 3.08(a)(i) through (viii),and any other amounts payable to such
Master Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, subject to and
to the extent provided in Section 3.04, be the successor to the Master
Servicer in its capacity as master servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof and applicable law including the
obligation to make Advances pursuant to Section 4.01. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans that the Master Servicer would have been entitled to charge to the
Certificate Account or Distribution Account if the Master Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Master Servicer in accordance with Section 7.01
hereof, the Trustee may, if it shall be unwilling to so act, or shall, if it
is prohibited by applicable law from making Advances pursuant to Section 4.01
hereof or if it is otherwise unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which does not adversely affect the then
current rating of the Certificates by each Rating Agency as the successor to
the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder. Any
successor to the Master 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
84
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer (other
than liabilities of the Master Servicer under Section 6.03 hereof incurred
prior to termination of the Master Servicer under Section 7.01), with like
effect as if originally named as a party to this Agreement; and provided
further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation
will not be qualified or reduced as a result of such assignment and
delegation. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so
acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of the Master Servicing
Fee permitted the Master Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary
to effectuate any such succession. Neither the Trustee nor any other successor
master servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Master Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as master servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as master servicer maintain in force the policy or policies
that the Master Servicer is required to maintain pursuant to Section 3.09.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the
successor Master Servicer 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 Master Servicer or (y) in causing MERS to designate on the
MERS(R) System the successor Master Servicer as the servicer of such Mortgage
Loan. The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The successor Master Servicer
shall cause such assignment to be delivered to the Trustee promptly upon
receipt of the original with evidence of recording thereon or a copy certified
by the public recording office in which such assignment was recorded.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
85
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived. ARTICLE VIII
86
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, 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 the Trustee and the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement which it believed in good faith to be genuine and to have
been duly executed by the proper authorities respecting any matters
arising hereunder;
(ii) the Trustee shall not be liable 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
(iii) 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.
87
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 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 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;
(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
88
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(R) 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 Master Servicer of any
funds paid to the Depositor or the Master Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Certificate Account by the
Depositor or the Master Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. 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
an amount equal to the Trustee Fee for such Distribution Date. The Trustee and
any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or
expense (including reasonable attorney's fees) (i) incurred in connection with
any claim or legal action relating to (a) this Agreement, (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 Master Servicer. Such
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee hereunder. Without limiting the foregoing, the
Master 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.
89
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 Master Servicer and its affiliates;
provided, however, that such entity cannot be an affiliate of the Master
Servicer other than the Trustee in its role as successor to the Master
Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Master 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 or
resignation, the resigning Trustee may 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
Master Servicer may remove the Trustee and appoint a successor trustee by
written instrument, in triplicate, one copy of which instrument shall be
delivered to the Trustee, one copy of which shall be delivered to the Master
Servicer and one copy 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 Master Servicer, one
complete set to the Trustee so removed and one complete set to the successor
so appointed.
90
Notice of any removal of the Trustee shall be given to each Rating Agency by
the successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein. The Depositor, the Master 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.
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 Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly
91
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power
to make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) 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
Master Servicer, shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the 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 Master 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
92
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. Tax Matters.
It is intended that the 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 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 either 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
93
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 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
Master Servicer, in the case of any such minimum tax, or if such tax arises
out of or results from a breach by the Master Servicer or Seller 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 Master 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).
94
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 Master
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 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.
95
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 Master Servicer and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by the Master 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 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 Master
Servicer at the expense of the Master 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 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 Xxxxxx X. Xxxxxxx, the late Ambassador of the United
States to the Court of St. James's, living on the date hereof and (ii) the
Latest Possible Maturity Date.
The Master Servicer shall have the right to purchase all Mortgage
Loans and REO Properties in the Trust Fund pursuant to clause (a) in the
preceding paragraph of this Section 9.01 only on or after the date on which
the Master Servicer determines that the customary and reasonable costs and
expenses incurred in the performance of the Master Servicer of its servicing
obligations hereunder exceed the benefits accruing to the Master Servicer;
provided, however, that in no event shall the Master Servicer exercise its
right to purchase all Mortgage Loans and REO Properties in the Trust Fund
pursuant to clause (a) in the preceding paragraph of this Section 9.01 before
the date on which the Pool Stated Principal Balance, at the time of any such
repurchase, is less than or equal to ten percent (10%) of the sum of the
aggregate Initial Cut-off Date Principal Balance of the Initial Mortgage Loans
and the Supplemental Amount on the Closing Date.
SECTION 9.02. F~inal Distribution on the Certificates.
If on any Determination Date, the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master
Servicer shall direct the Trustee promptly to send a final distribution notice
to each Certificateholder. If the Master Servicer elects to terminate the
Trust Fund pursuant to clause (a) of Section 9.01, at least 20 days prior to
the date notice is to be mailed to the affected Certificateholders, the Master
Servicer shall notify the Depositor and the Trustee of the date the Master
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
96
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 made upon presentation and surrender
of Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Master Servicer will give
such notice to each Rating Agency at the time such notice is given to
Certificateholders.
In the event such notice is given, the Master Servicer shall cause
all funds in the Certificate Account to be remitted to the Trustee for deposit
in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of
the Certificates. Upon such final deposit with respect to the Trust Fund and
the receipt by the Trustee of a Request for Release therefor, the Trustee
shall promptly release to the Master Servicer the Mortgage Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to 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 (or on their Notional Amount, if applicable) 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 Master 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 Master 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 (ii)
cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
97
(1) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Master Servicer under Section 9.02,
the Master 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 Master 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
Master Servicer, and the receipt of the Opinion of Counsel referred to in
Section 9.03(a)(1) and to take such other action in connection therewith as
may be reasonably requested by the Master Servicer.
(c) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to prepare and the Trustee to adopt and
sign a plan of complete liquidation. ARTICLE X
98
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Seller, the Master 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 Master 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 Seller, the
Depositor and the Master 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 Master 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 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
99
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 Master Servicer at its
expense, but only upon direction by the Trustee 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 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
100
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 or any Supplemental Transfer 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 or
any Supplemental Transfer Agreement shall be deemed to be an assignment and a
grant pursuant to the terms of this Agreement (a) by the Seller to the
Depositor or (b) 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;
3. The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03;
5. The final payment to Certificateholders; and
6. Any rating action involving the long-term credit rating of the
Master Servicer, which notice shall be made by first-class mail within two
Business Days after the Trustee gains actual knowledge thereof.
101
In addition, the Trustee shall 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., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
facsimile number: (000) 000-0000, Attention: Xxxxx X. Xxxxxxx, (b) in the case
of the Seller, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, facsimile number: (000) 000-0000, Attention: Xxxxx X.
Xxxxxxxx, or such other address as may be hereafter furnished to the Depositor
and the Trustee by the Seller in writing, (c) in the case of the Master
Servicer, Countrywide Home Loans Servicing LP, 000 Xxxxxxxxxxx Xxx, Xxxx
Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxx, or such other address as may
be hereafter furnished to the Depositor and the Trustee by the Master Servicer
in writing, (d) in the case of the Trustee, The Bank of New York, 0 Xxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number: (000) 000-0000,
Attention: Mortgage-Backed Securities Group, CWMBS, Inc. Series 2002-7, or
such other address as the Trustee may hereafter furnish to the Depositor or
Master Servicer and (e) 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 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 Master
Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust 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
102
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.
SECTION 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Master Servicer's normal business hours,
to examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its
officers, employees and independent public accountants (and by this provision
the Master Servicer hereby authorizes 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 or the Trustee of any right under
this Section 10.09 shall be borne by the party requesting such inspection; all
other such expenses shall be borne by the Master Servicer or the related
Subservicer.
103
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.
* * * * * *
104
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and the
Master 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/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxxxx Xxxxxxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
S-I-X-1
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
S-I-1
SCHEDULE II
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 2002-7
Representations and Warranties of the Seller
Countrywide Home Loans, Inc. ("Countrywide Home Loans") hereby makes
the representations and warranties set forth in this Schedule II to the
Depositor, the Master Servicer 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 shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series, among Countrywide Home Loans, as
seller, CWMBS, Inc., as depositor, Countrywide Home Loans Servicing LP, as
master servicer and The Bank of New York, as trustee.
(1) Countrywide Home Loans 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 Home Loans 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 obligations under
the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Countrywide Home Loans has the full corporate power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by the Pooling and Servicing Agreement and has duly
authorized by all necessary corporate action on the part of
Countrywide Home Loans 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 Home Loans, enforceable against
Countrywide Home Loans 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 Home Loans, the sale of the Mortgage Loans by
Countrywide Home Loans 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 Home Loans and will not (A) result in a material breach of
any term or provision of the charter or by-laws of Countrywide Home
Loans or (B) materially
S-II-1
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 Home Loans 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 Home Loans of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Countrywide Home
Loans; and Countrywide Home Loans 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
Home Loans' ability to perform or meet any of its obligations under
the Pooling and Servicing Agreement.
(4) Countrywide Home Loans 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 Countrywide
Home Loans' knowledge, threatened, against Countrywide Home Loans that
would materially and adversely affect the execution, delivery or
enforceability of the Pooling and Servicing Agreement or the ability
of Countrywide Home Loans 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.
(6) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Countrywide Home Loans of, or compliance by
Countrywide Home Loans 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 Home Loans has obtained the same.
(7) Countrywide Home Loans 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-2
SCHEDULE III
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 2002-7
Representations and Warranties of the Master Servicer
Countrywide Home Loans Servicing LP ("Countrywide Servicing") hereby
makes the representations and warranties set forth in this Schedule III to the
Depositor, the Seller 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 the Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement") relating to the above-referenced Series, among
Countrywide Home Loans, as seller, Countrywide Home Loans Servicing LP, as
master servicer, CWMBS, Inc., as depositor, and The Bank of New York, as
trustee.
(1) Countrywide Servicing is duly organized as a
limited partnership and is validly existing and in good standing
under the laws of the State of Texas and is duly authorized and
qualified to transact any and all business contemplated by the
Pooling and Servicing Agreement to be conducted by Countrywide
Servicing 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 Pooling and Servicing Agreement and to
perform any of its obligations under the Pooling and Servicing
Agreement in accordance with the terms thereof.
(2) Countrywide Servicing has the full partnership
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 partnership action on the part
of Countrywide Servicing 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 Servicing, enforceable against
Countrywide Servicing 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 Servicing, 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
Servicing and will not (A) result in a material breach of any term or
provision of the certificate of limited partnership, partnership
agreement or other organizational document of Countrywide Servicing
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
S-III-1
material agreement or instrument to which Countrywide Servicing 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 Servicing of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Countrywide
Servicing; and Countrywide Servicing is not in breach or violation of
any material indenture or other material agreement or instrument, or
in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
the ability of Countrywide Servicing to perform or meet any of its
obligations under the Pooling and Servicing Agreement.
(4) Countrywide Servicing 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 Acts.
(5) No litigation is pending or, to the best of
Countrywide's Servicing knowledge, threatened, against Countrywide
Servicing that would materially and adversely affect the execution,
delivery or enforceability of the Pooling and Servicing Agreement or
the ability of Countrywide Servicing 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.
(6) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by Countrywide Servicing of, or
compliance by Countrywide Servicing 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 Servicing has obtained the same.
(7) Countrywide Servicing 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-III-2
SCHEDULE IV
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 2002-7
Representations and Warranties as to the Mortgage Loans
Countrywide Home Loans, Inc. ("Countrywide Home Loans") hereby makes
the representations and warranties set forth in this Schedule IV to the
Depositor, the Master Servicer and the Trustee as of the Closing Date, or if
so specified herein, with respect to the Initial Cut-off Date, and with
respect to the Supplemental Mortgage Loans, as of the Supplemental Transfer
Date. Capitalized terms used but not otherwise defined in this Schedule IV
shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among Countrywide Home Loans, as seller, Countrywide
Home Loans Servicing LP, as master servicer, CWMBS, Inc., as depositor, and
The Bank of New York, as trustee.
(1) The information set forth on Schedule I to the Pooling
and Servicing Agreement with respect to each Initial Mortgage Loan is
true and correct in all material respects as of the Closing Date and
with respect to each Supplemental Mortgage Loan is true and correct in
all material respects as of the related Supplemental Transfer Date.
(2) As of the Closing Date, all payments due with respect to
each Initial Mortgage Loan prior to the Initial Cut-off Date have been
made; and as of the Initial Cut-off Date, no Mortgage Loan has been
contractually delinquent for 30 or more days during the twelve months
prior to the Initial Cut-off Date. As of each Supplemental Transfer
Date, all payments due with respect to each related Supplemental
Mortgage Loan prior to the related Supplemental Cut-off Date will have
been made; and as of each Supplemental Cut-off Date, no related
Supplemental Mortgage Loan will have been contractually delinquent for
30 or more days during the twelve months prior to that Supplemental
Cut-off Date.
(3) No Initial Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95%.
(4) Each Mortgage is a valid and enforceable first lien on
the Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in
connection with the origination of the related Mortgage Loan, and (c)
other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended to
be provided by such Mortgage.
S-IV-1
(5) Immediately prior to the assignment of each Mortgage Loan
to the Depositor, the Seller had good title to, and was the sole owner
of, such Mortgage Loan free and clear of any pledge, lien, encumbrance
or security interest and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to
sell and assign the same pursuant to the Pooling and Servicing
Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor
to pay the unpaid principal of or interest on such Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property which are or may be a
lien prior to, or equal with, the lien of such Mortgage, except those
which are insured against by the title insurance policy referred to in
item (14) below.
(9) As of the Closing Date with respect to the Initial
Mortgage Loans and as of the Supplemental Transfer Date with respect
to the Supplemental Mortgage Loans, to the best of the Seller's
knowledge, each Mortgaged Property is free of material damage and in
good repair.
(10) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby will not involve
the violation of any such laws.
(11) Each Mortgage Loan was (A) originated no earlier than
six months prior to the time the Seller purchased such Mortgage Loan
pursuant to a mortgage loan purchase agreement or other similar
agreement and (B) underwritten or reunderwritten by the Seller in
accordance with the Seller's underwriting guidelines in effect at the
time the loan was underwritten or reunderwritten, as applicable.
(12) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company, or mortgage banking company which is supervised and examined
by a federal or state authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 2.03
and 2.11 of the National Housing Act.
(13) As of the Closing Date in the case of the Initial
Mortgage Loans and as of the related Supplemental Transfer Date with
respect to the Supplemental Mortgage Loans, neither the Seller nor any
prior holder of any Mortgage has modified the Mortgage in any material
respect (except that a Mortgage Loan may have been modified by a
written instrument which has been recorded or submitted for
recordation, if necessary, to protect the interests of the
Certificateholders and the original or a copy of which has been
delivered to the Trustee); satisfied, cancelled or subordinated such
S-IV-2
Mortgage in whole or in part; released the related Mortgaged Property
in whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification or satisfaction with
respect thereto.
(14) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and
effect, and each such policy was issued by a title insurer qualified
to do business in the jurisdiction where the Mortgaged Property is
located and acceptable to FNMA or FHLMC and is in a form acceptable to
FNMA or FHLMC, which policy insures the Seller and successor owners of
indebtedness secured by the insured Mortgage, as to the first priority
lien of the Mortgage subject to the exceptions set forth in paragraph
(4) above and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the mortgage interest rate and/or
monthly payment including any negative amortization thereunder. To the
best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy.
(15) With respect to any Mortgage Loan that provides for an
adjustable interest rate, all mortgage rate and payment adjustments,
if any, prior to or on the Cut-off Date, have been made in accordance
with the terms of the related Mortgage Note or subsequent
modifications, if any and applicable law.
(16) Each Mortgage Loan was originated (within the meaning of
Section 3(a)(41) of the Securities Exchange Act of 1934, as amended)
by an entity that satisfied at the time of origination the
requirements of Section 3(a)(41) of the Securities Exchange Act of
1934, as amended.
(17) To the best of the Seller's knowledge, all of the
improvements which were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(18) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
S-IV-3
(19) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and under applicable
law. To the best of the Seller's knowledge, all parties to the
Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage
have been duly and properly executed by such parties.
(20) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making,
or closing or recording the Mortgage Loans were paid.
(21) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise
by judicial foreclosure.
(22) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Certificateholders to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Mortgagor.
(23) Each Mortgage Note and each Mortgage is in substantially
one of the forms acceptable to FNMA or FHLMC, with such riders as have
been acceptable to FNMA or FHLMC, as the case may be.
(24) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the related Mortgage Note.
(25) The origination, underwriting and collection practices
used by the Seller with respect to each Mortgage Loan have been in all
respects legal, prudent and customary in the mortgage lending and
servicing business.
(26) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations.
(27) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(28) Each Mortgage Loan contains a customary "due on sale"
clause.
(29) 55 of the Initial Mortgage Loans provide for a
prepayment penalty.
S-IV-4
(30) Each Mortgage Loan which had a Loan-to-Value Ratio at
origination in excess of 80% is the subject of a Primary Insurance
Policy that insures that portion of the principal balance equal to a
specified percentage times the sum of the remaining principal balance
of the related Mortgage Loan, the accrued interest thereon and the
related foreclosure expenses. The specified percentage is either 12%
for Loan-to-Value Ratios between 80.01% and 85.00%, 25% for
Loan-to-Value Ratios between 85.01% and 90.00%, 30% for Loan-to-Value
Ratios between 90.01% and 97.00% and 35% for Loan-to-Value Ratios
between 97.01% and 100%. Each such Primary Insurance Policy is issued
by a Qualified Insurer. All provisions of any such Primary Insurance
Policy have been and are being complied with, any such policy is in
full force and effect, and all premiums due thereunder have been paid.
Any Mortgage subject to any such Primary Insurance Policy obligates
either the Mortgagor or the mortgagee thereunder to maintain such
insurance and to pay all premiums and charges in connection therewith,
subject, in each case, to the provisions of Section 3.09(c) of the
Pooling and Servicing Agreement. The Mortgage Rate for each Mortgage
Loan is net of any such insurance premium.
(31) As of the related Cut-off Date, the improvements upon
each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides for
fire and extended coverage and coverage for such other hazards as are
customary in the area where the Mortgaged Property is located in an
amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan or
(ii) the greater of (a) the outstanding principal balance of the
Mortgage Loan and (b) an amount such that the proceeds of such policy
shall be sufficient to prevent the Mortgagor and/or the mortgagee from
becoming a co-insurer. If the Mortgaged Property is a condominium
unit, it is included under the coverage afforded by a blanket policy
for the condominium unit. All such individual insurance policies and
all flood policies referred to in item (29) below contain a standard
mortgagee clause naming the Seller or the original mortgagee, and its
successors in interest, as mortgagee, and the Seller has received no
notice that any premiums due and payable thereon have not been paid;
the Mortgage obligates the Mortgagor thereunder to maintain all such
insurance including flood insurance at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor.
(32) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood
Insurance Administration is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the original outstanding
principal balance of the Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis,
or (C) the maximum amount of insurance that is available under the
Flood Disaster Protection Act of 1973, as amended.
S-IV-5
(33) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the total or partial
condemnation of the Mortgaged Property.
(34) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material event which, with the passage of time
or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and the Seller has not
waived any default, breach, violation or event of acceleration.
(35) Each Mortgaged Property is improved by a one- to
four-family residential dwelling including condominium units and
dwelling units in PUDs, which, to the best of Seller's knowledge, does
not include cooperatives or mobile homes and does not constitute other
than real property under state law.
(36) Each Mortgage Loan is being master serviced by the
Master Servicer.
(37) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
Mortgage Loan Schedule. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan. The
Mortgage Note does not permit or obligate the Master Servicer to make
future advances to the Mortgagor at the option of the Mortgagor.
(38) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed, but is not
yet due and payable. Except for (A) payments in the nature of escrow
payments, and (B) interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage proceeds, whichever is later,
to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Master Servicer has not advanced
funds, or induced, solicited or knowingly received any advance of
funds by a party other than the Mortgagor, directly or indirectly, for
the payment of any amount required by the Mortgage.
(39) Other than with respect to 82.25% of the Group 5
Mortgage Loans, each Mortgage Loan was underwritten in all material
respects in accordance with the Seller's underwriting guidelines as
set forth in the Prospectus Supplement. Each of the remaining Mortgage
Loans was underwritten in all material respects in accordance with the
Xxxxx Fargo underwriting guidelines as set forth in the Prospectus
Supplement.
S-IV-6
(40) Other than with respect to any Streamlined Documentation
Mortgage Loan as to which the loan-to-value ratio of the related
Original Mortgage Loan was less than 90% at the time of the
origination of such Original Mortgage Loan, prior to the approval of
the Mortgage Loan application, an appraisal of the related Mortgaged
Property was obtained from a qualified appraiser, duly appointed by
the originator, who had no interest, direct or indirect, in the
Mortgaged Property or in any loan made on the security thereof, and
whose compensation is not affected by the approval or disapproval of
the Mortgage Loan; such appraisal is in a form acceptable to FNMA and
FHLMC.
(41) None of the Initial Mortgage Loans is a graduated
payment mortgage loan or a growing equity mortgage loan, and none of
the Mortgage Loans is subject to a buydown or similar arrangement.
(42) Any leasehold estate securing a Mortgage Loan has a term
of not less than five years in excess of the term of the related
Mortgage Loan.
(43) The Mortgage Loans were selected from among the
outstanding fixed-rate one- to four-family mortgage loans in
Countrywide Home Loans' portfolio at the Closing Date as to which the
representations and warranties made as to the Mortgage Loans set forth
in this Schedule IV can be made. Such selection was not made in a
manner intended to adversely affect the interests of
Certificateholders.
(44) Except for 248 Initial Mortgage Loans, each Mortgage
Loan has a payment date on or before the Due Date in the month of the
first Distribution Date.
(45) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Trustee certifying that the
original Mortgage Note is a Lost Mortgage Note, if such Mortgage Loan
is subsequently in default, the enforcement of such Mortgage Loan or
of the related Mortgage by or on behalf of the Trustee will not be
materially adversely affected by the absence of the original Mortgage
Note. A "Lost Mortgage Note" is a Mortgage Note the original of which
was permanently lost or destroyed and has not been replaced.
(46) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
S-IV-7
SCHEDULE V
Principal Balances Schedule
[if applicable]
S-V-1
SCHEDULE VI
Form of Monthly Master Servicer Report
S-V1-1
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. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 200____-____
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
A-1
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 Master Servicer 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"), Countrywide Home Loans Servicing LP, as
master servicer (the "Master Servicer"), 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: ____________, 20__
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.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER THE CODE
TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS _________, 200__.
THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ___%. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT OF ___% PER
ANNUM (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH
$________ OF OID PER $1,000 OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE; THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE FOR PURPOSES OF
COMPUTING THE ACCRUAL OF OID IS APPROXIMATELY ____% (COMPOUNDED MONTHLY); THE
AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD IS $ PER $1,000 OF
THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE COMPUTED USING THE MONTHLY
YIELD AND DAILY COMPOUNDING DURING THE SHORT ACCRUAL PERIOD. NO REPRESENTATION
IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT
ASSUMPTION OR AT ANY OTHER RATE. THE ACTUAL YIELD TO MATURITY MAY DIFFER FROM
THAT SET FORTH ABOVE, AND THE ACCRUAL OF OID WILL BE ADJUSTED, IN ACCORDANCE
WITH SECTION 1272(a)(6) OF THE CODE, TO TAKE INTO ACCOUNT EVENTS WHICH HAVE
OCCURRED DURING ANY ACCRUAL PERIOD. THE PREPAYMENT ASSUMPTION IS INTENDED TO
BE THE PREPAYMENT ASSUMPTION REFERRED TO IN SECTION 1272(a)(6)(B)(iii) OF THE
CODE.]
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
B-1
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE REPRESENTS TO THE TRUSTEE 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 DELIVERS TO THE
TRUSTEE AN ALTERNATIVE REPRESENTATION OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. [SUCH REPRESENTATION
SHALL BE DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE TRANSFEREE'S
ACCEPTANCE OF A CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL OWNER'S
ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE OF THIS CLASS.] 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.
B-2
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 200____-____
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 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 Master Servicer 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"), Countrywide Home Loans
Servicing LP, as master servicer (the "Master Servicer"), 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.
[No transfer of a Certificate of this Class 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
B-3
exempt from the registration requirements under said Act and such laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer. In the
event that such a transfer is to be made within three years from the date of
the initial issuance of Certificates pursuant hereto, there shall also be
delivered (except in the case of a transfer pursuant to Rule 144A of the
Securities Act) to the Trustee an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act and such state
securities laws, which Opinion of Counsel shall not be obtained at the expense
of the Trustee, the Seller, the Master Servicer or the Depositor. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor 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 a Certificate of this Class 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 a plan subject to
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
Master Servicer, (ii) if certificate has been the subject of an ERISA
Qualifying Underwriting and 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 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 Master Servicer to the effect that
the purchase or holding of such 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 undertaken
in the Agreement, which Opinion of Counsel shall not be an expense of the
Trustee or the Master Servicer. [Such representation shall be deemed to have
been made to the Trustee by the Transferee's acceptance of a Certificate of
this Class and by a beneficial owner's acceptance of its interest in a
Certificate of this Class.] Notwithstanding anything else to the contrary
herein, any purported transfer of a Certificate of this Class 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.
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-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 20__
THE BANK OF NEW YORK,
as Trustee
By ______________________
Countersigned:
By____________________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
B-5
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 AN ALTERNATIVE REPRESENTATION 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 :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 200____-____
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 Master Servicer 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"), Countrywide Home Loans Servicing LP, as master servicer (the
"Master Servicer"), 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.
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.
C-2
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 a plan subject to 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 Master 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 Master 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 Master 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 Master 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: ____________, 20__
THE BANK OF NEW YORK,
as Trustee
By ______________________
Countersigned:
By __________________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
C-4
EXHIBIT D
[FORM OF NOTIONAL AMOUNT CERTIFICATE]
[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 HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER THE CODE
TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS __________, 200_.
THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ___%. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT OF ___% PER
ANNUM (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH
$_________ OF OID ON THE INITIAL POOL STATED PRINCIPAL BALANCE; THE ANNUAL
YIELD TO MATURITY OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING THE ACCRUAL OF
OID IS APPROXIMATELY ___% (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO
THE SHORT FIRST ACCRUAL PERIOD IS $_______ ON THE INITIAL POOL STATED
PRINCIPAL BALANCE; AND THE METHOD USED TO CALCULATE THE ANNUAL YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD IS
THE EXACT METHOD AS DEFINED IN PROPOSED TREASURY REGULATIONS. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE. THE ACTUAL YIELD TO MATURITY
MAY DIFFER FROM THAT SET FORTH ABOVE, AND THE ACCRUAL OF OID WILL BE ADJUSTED,
IN ACCORDANCE WITH SECTION 1272(a)(6) OF THE CODE, TO TAKE INTO ACCOUNT EVENTS
WHICH HAVE OCCURRED DURING ANY ACCRUAL PERIOD. THE PREPAYMENT ASSUMPTION IS
INTENDED TO BE THE PREPAYMENT ASSUMPTION REFERRED TO IN SECTION
1272(a)(6)(B)(iii) OF THE CODE.]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE REPRESENTS TO THE TRUSTEE 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 DELIVERS TO THE
TRUSTEE AN ALTERNATIVE REPRESENTATION OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. [SUCH REPRESENTATION
SHALL BE DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE TRANSFEREE'S
ACCEPTANCE OF A CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL OWNER'S
ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE OF THIS CLASS.] 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.
D-1
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Notional Amount
of this Certificate
("Denomination") :
Initial Notional Amount
of all Certificates
of this Class :
CUSIP :
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 200____-____
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 loans (the
"Mortgage Loans") secured by first liens on one- to four-family
residential properties
CWMBS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Master Servicer 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 specified above 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 Cut-off Date
specified above (the "Agreement") among the Depositor, Countrywide Home Loans,
Inc., as seller (the "Seller"), Countrywide Home Loans Servicing LP, as master
servicer (the "Master Servicer"), 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.
D-2
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.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 20__
THE BANK OF NEW YORK,
as Trustee
By____________________
Countersigned:
By___________________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee [Reserved]
D-3
EXHIBIT E
[FORM OF REVERSE OF CERTIFICATES]
CWMBS, INC.
Mortgage Pass-Through Certificates
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 Master 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.
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 Master Servicer and the Trustee with the consent of
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.
E-1
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 Master Servicer, the Seller 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 10% of the aggregate Cut-off Date Principal Balances of the Mortgage
Loans, the Master Servicer 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
(INITIAL MORTGAGE LOANS)
[date]
[Depositor]
[Master Servicer]
[Seller]
_______________________________
_______________________________
Re: Pooling and Servicing Agreement among
CWMBS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee,
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 Initial Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Initial 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 Initial
F-1-1
Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Initial
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
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUPPLEMENTAL MORTGAGE LOANS)
[date]
[Depositor]
[Master Servicer]
[Seller]
_______________________________
_______________________________
Re: Pooling and Servicing Agreement among
CWMBS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee,
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") and the
Supplemental Transfer Agreement, dated as of [month] ____, 200_, the
undersigned, as Trustee, hereby certifies that, as to each Supplemental
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Supplemental 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
F-2-1
or genuineness of any of the documents contained in each Mortgage File of any
of the Supplemental Mortgage Loans identified on the Mortgage Loan Schedule,
or (ii) the collectability, insurability, effectiveness or suitability of any
such Supplemental 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-2-2
EXHIBIT G-1
FORM OF DELAY DELIVERY CERTIFICATION
(INITIAL MORTGAGE LOANS)
[date]
[Depositor]
[Master Servicer]
[Seller]
_____________________
_____________________
Re: Pooling and Servicing Agreement among
CWMBS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 200_-_
-------------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to the
above-referenced series, with the schedule of exceptions attached thereto (the
"Schedule A"), delivered by the undersigned, as Trustee, on the Closing Date
in accordance with Section 2.02 of the above-captioned Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"). The undersigned hereby
certifies that, as to each Delay Delivery Initial Mortgage Loan listed on
Schedule A attached hereto (other than any Initial Mortgage Loan paid in full
or listed on Schedule B attached hereto) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _______________ without recourse", 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 Initial Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, [and in the case of
each Initial Mortgage Loan that is a MERS Mortgage Loan, the
original Mortgage, noting thereon the presence of the MIN of the
Initial Mortgage Loan and language indicating that the Initial
Mortgage Loan is a MOM Loan if the Initial Mortgage Loan is a MOM
Loan, with evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which such
Mortgage has been recorded];
G-1-1
(iii) in the case of each Initial 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, 2002, without recourse", or, in the
case of each Initial Mortgage Loan with respect to property located
in the State of California that is not a MERS Mortgage Loan, a duly
executed assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage
[(noting the presence of a MIN in the case of each MERS Mortgage
Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of
recording thereon if recordation thereof is permissible under
applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or, in
the event such original title policy has not been received from the
insurer, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company, with the original policy of
title insurance to be delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a MERS
Mortgage Loan the Seller cannot deliver the original recorded Mortgage or all
interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Initial 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
Initial Mortgage Loan, and (ii) the information set forth in items (i), (iv),
(v), (vi), (viii), (xi) and (xiv) of the definition of the "Mortgage Loan
Schedule" in Section 1.01 of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Initial 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.
G-1-2
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:
G-1-3
EXHIBIT G-2
FORM OF DELAY DELIVERY CERTIFICATION
(SUPPLEMENTAL MORTGAGE LOANS)
[date]
[Depositor]
[Master Servicer]
[Seller]
_____________________
_____________________
Re: Pooling and Servicing Agreement among
CWMBS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 200_-_
-------------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to the
above-referenced series, with the schedule of exceptions attached thereto (the
"Schedule A"), delivered by the undersigned, as Trustee, on [month] __, 200_
(such date being the related "Supplemental Transfer Date" in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"). The undersigned hereby certifies that, as
to each Delay Delivery Supplemental Mortgage Loan listed on Schedule A
attached hereto (other than any Supplemental Mortgage Loan paid in full or
listed on Schedule B attached hereto) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _______________ without recourse", 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 Supplemental Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, [and in the case of
each Supplemental Mortgage Loan that is a MERS Mortgage Loan, the
original Mortgage, noting thereon the presence of the MIN of the
Supplemental Mortgage Loan and language indicating that the
Supplemental Mortgage Loan is a MOM Loan if the Supplemental
Mortgage Loan is a MOM Loan, with evidence of recording
G-2-1
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 Supplemental 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, 2002, without recourse", or, in the
case of each Supplemental Mortgage Loan with respect to property
located in the State of California that is not a MERS Mortgage Loan,
a duly executed assignment of the Mortgage in blank (each such
assignment, when duly and validly completed, to be in recordable
form and sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment
relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage
[(noting the presence of a MIN in the case of each MERS Mortgage
Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of
recording thereon if recordation thereof is permissible under
applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or, in
the event such original title policy has not been received from the
insurer, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company, with the original policy of
title insurance to be delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a MERS
Mortgage Loan the Seller cannot deliver the original recorded Mortgage or all
interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Supplemental 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
Supplemental Mortgage Loan, and (ii) the information set forth in items (i),
(iv), (v), (vi), (viii), (xi) and (xiv) of the definition of the "Mortgage
Loan Schedule" in Section 1.01 of the Pooling and Servicing Agreement
accurately reflects information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage
G-2-2
File of any of the Supplemental 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:
G-2-3
EXHIBIT H-1
FORM OF FINAL CERTIFICATION OF TRUSTEE
(INITIAL MORTGAGE LOANS)
[date]
[Depositor]
[Master Servicer]
[Seller]
________________________________
________________________________
Re: Pooling and Servicing Agreement among
CWMBS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee,
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 Initial Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Initial 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 Initial Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, [and in the case of
each Initial 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
H-1-1
a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by
the public recording office in which such Mortgage has been
recorded];
(iii) in the case of each Initial 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, 2002, without recourse", or, in the
case of each Initial 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 Initial 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 Initial 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 Initial 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
Initial 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 Initial 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 Initial
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:
X-0-0
XXXXXXX X-0
FORM OF FINAL CERTIFICATION OF TRUSTEE
(SUPPLEMENTAL MORTGAGE LOANS)
[date]
[Depositor]
[Master Servicer]
[Seller]
________________________________
________________________________
Re: Pooling and Servicing Agreement among
CWMBS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee,
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 Supplemental Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Supplemental 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 Supplemental Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, [and in the case of
each Supplemental 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
H-2-1
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM
Loan, with evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which such
Mortgage has been recorded];
(iii) in the case of each Supplemental 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, 2002, without recourse", or, in the
case of each Supplemental 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 Supplemental
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 Supplemental 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 Supplemental 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
Supplemental 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-2-2
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 Supplemental 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 Supplemental 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:
H-2-3
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,
Countrywide Home Loans Servicing LP, as master servicer and The Bank of New
York, as Trustee. Capitalized terms used, but not defined herein or in Exhibit
1 hereto, shall have the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this affidavit on behalf of
the Transferee.
2. 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 knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a
I-1
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives and, except as
may be provided in Treasury Regulations, persons holding interests in
pass-through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide
by the provisions of Section 5.02(c) of the Agreement and the restrictions
noted on the face of the Certificate. The Transferee understands and agrees
that any breach of any of the representations included herein shall render the
Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit 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 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
I-2
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.
12. The Transferee is either(i) 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 to effect such
acquisition, or, (ii) the source of funds for the purchase of such Class A-R
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 Sections I and III of PTCE
95-60 are applicable to the acquisition and holding of such Class A-R
Certificate.
* * *
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. The
Trustee shall be entitled but not obligated to recover from any Holder of
a Class A-R
I-6
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.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
The Bank of New York
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
The Bank of New York
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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
By:______________________________________
Authorized Officer
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
________________________
Date
CWMBS, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
The Bank of New York
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
The Bank of New York
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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
L-1
acting on our behalf offered, transferred, pledged, sold or otherwise disposed
of the Certificates, any interest in the Certificates or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Certificates, any interest in the Certificates or any
other similar security from, or otherwise approached or negotiated with
respect to the Certificates, any interest in the Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(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.
L-3
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
L-4
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.
_________________________________________
Print Name of Buyer
By:______________________________________
Name:
Title:
Date:____________________________________
L-5
ANNEX 2 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.
___ The Buyer owned $________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
L-6
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
_________________________________________
Print Name of Buyer or Adviser
By: _____________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date: ___________________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
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 Master 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 the Trustee, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer and CWMBS,
Inc., as Depositor.
( ) 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 _________________________ of official records at
page/image _______________________________.
M-1
( ) Deed of Trust recorded on ______________________ as instrument no.
___________ in the County Recorder's Office of the County of
__________________________, State of _____________________ in
book/reel/docket _________________________ of official records at
page/image ____________________________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_____________________ as instrument no. __________________ in the County
Recorder's Office of the County of _____________________, State of
___________________ in book/reel/docket ________________ of official
records at page/image ______________________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( )__________________________________________________________________
( )__________________________________________________________________
( )__________________________________________________________________
( )__________________________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Servicer assert or seek to assert any claims or rights
of setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided
in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of
the Trustee, and the Master Servicer shall keep the Documents and
any proceeds separate and distinct from all other property in the
Master Servicer's possession, custody or control.
M-2
COUNTRYWIDE HOME LOANS
SERVICING LP
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, 2002 among
Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, CWMBS, Inc. 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.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
N-2
EXHIBIT O
[FORM OF FINANCIAL GUARANTY INSURANCE POLICY]
[RESERVED]
O-1
EXHIBIT P
FORM OF SUPPLEMENTAL TRANSFER AGREEMENT
THIS SUPPLEMENTAL TRANSFER AGREEMENT, dated as of ____________, 200_
(this "Supplemental Transfer Agreement"), among CWMBS, INC., a Delaware
corporation, as depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a
New York corporation, as seller under the Pooling and Servicing Agreement
referred to below ( the "Seller"), and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, the Seller, the Trustee and Countrywide Home
Loans Servicing LP, as Master Servicer, have entered in the Pooling and
Servicing Agreement, dated as of [month] 1, 2002 (the "Pooling and Servicing
Agreement"), in relation to the CHL Mortgage Pass-Through Trust 200_-_,
Mortgage Pass-Through Certificates, Series 200_-_;
WHEREAS, Section 2.01(e) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Supplemental Transfer
Agreement in accordance with the terms and conditions of the Pooling and
Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration the receipt and adequacy of which are hereby
acknowledged the parties hereto agree as follows:
(a) The "Supplemental Transfer Date" with respect to this Supplemental
Transfer Agreement shall be ________, 200_.
(b) The "Aggregate Supplemental Purchase Amount" with respect to this
Supplemental Transfer Agreement shall be $________; provided, however, that
such amount shall not exceed the amount on deposit in the Supplemental Loan
Account.
(c) The "Capitalized Interest Requirement" with respect to this
Supplemental Transfer Agreement shall be $________; provided, however, that
such amount shall not exceed the amount on deposit in the Capitalized Interest
Account.
(d) The Supplemental Mortgage Loans conveyed on the Supplemental Transfer
Date shall be determined by the Seller as follows:
(i) The Seller shall list all funded mortgage loans then owned by it
that qualify for inclusion in the Trust Fund by the date on which they
were funded, and for each date, the Mortgagors shall be listed
alphabetically. Beginning with the earliest date, sequentially by date
and within a date alphabetically, the listed loans shall be included in
the Trust Fund until either their aggregate Stated Principal Balance is
less than or equal to the Supplemental Purchase Amount without exceeding
it or all of the listed loans have been transferred.
(ii) Once the potential Supplemental Mortgage Loans are identified
in this manner, the total potential Trust Fund shall be tested for
compliance with the characteristics identified in Section 2.01(e) after
taking into account the addition of such potential Supplemental Mortgage
Loans. If any group characteristic is outside any permitted parameter by
more than 5% of the
P-1
parameter (or 10% of such parameter, with respect to the Average Stated
Principal Balance, or 10 basis points of such parameter, with respect to
the weighted average mortgage rate, or two months of such parameter, with
respect to the weighted average remaining term to maturity) then
beginning with the last mortgage loan initially added as a potential
Supplemental Mortgage Loan and progressing in reverse order, any
potential Supplemental Mortgage Loan having a characteristic that is
outside of the permitted parameters of a parameter violated by the
potential Supplemental Mortgage Loans in the aggregate shall be removed.
Then additional mortgage loans shall be added as provided in the
preceding paragraph except that no mortgage loan shall be added if it has
a characteristic that is outside of the permitted parameters of a
parameter violated by the potential Supplemental Mortgage Loans in the
aggregate. This procedure shall be repeated until the pool
characteristics for the Trust Fund identified in Section 2.01(e) are
satisfied within 5% of each parameter (other than with respect to the
Average Stated Principal Balance for which it must be within 10%, the
weighted average mortgage rate for which it must be within 10 basis
points, and the weighted average remaining term to maturity for which it
must be within two months) of each parameter specified in those
representations and warranties after taking into account the addition of
the potential Supplemental Mortgage Loans.
(e) In case any provision of this Supplemental Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions or obligations shall not in any way
be affected or impaired thereby.
(f) In the event of any conflict between the provisions of this
Supplemental Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.
(g) This Supplemental Transfer Agreement shall be governed by, and shall
be construed and enforced in accordance with the laws of the State of New
York.
(h) The Supplemental Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
P-2
IN WITNESS WHEREOF, the parties to this Supplemental Transfer Agreement
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:______________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By:______________________________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:______________________________________
Name:
Title:
P-3
Acknowledged and Agreed:
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: _____________________________
Name:
Title:
P-4
EXHIBIT Q
FORM OF TRANSFEREE CERTIFICATE
CWMBS, Inc.
00000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
The Bank of New York
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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
