EXHIBIT 99.1
B&W Draft No. 2
11/18/98
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CWABS, INC.,
as Depositor,
COUNTRYWIDE HOME LOANS, INC.
as Sponsor and Master Servicer,
and
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of November 14, 1998
----------------------
Revolving Home Equity Loan Asset Backed Certificates
Series 1998-D
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01. Definitions..................................................6
Section 1.02. Interest Calculations.......................................22
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates; Tax Treatment
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to
Fund Advances Under Credit Line Agreements..................23
Section 2.02. Acceptance by Trustee.......................................25
Section 2.03. Representations and Warranties Regarding the Master
Servicer....................................................28
Section 2.04. Representations and Warranties of the Sponsor Regarding
the Mortgage Loans; Retransfer of Certain Mortgage Loans....29
Section 2.05. Covenants of the Depositor..................................34
Section 2.06. Transfers of Mortgage Loans at Election of Transferor.......35
Section 2.07. Execution and Authentication of Certificates................36
Section 2.08. Tax Treatment...............................................36
Section 2.09. Representations and Warranties of the Depositor.............36
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. The Master Servicer.........................................37
Section 3.02. Collection of Certain Mortgage Loan Payments................39
Section 3.03. Withdrawals from the Collection Account.....................40
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses....................................................41
Section 3.05. Assumption and Modification Agreements......................41
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans......................................42
Section 3.07. Trustee to Cooperate........................................43
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Master Servicer.............................................43
Section 3.09. Annual Statement as to Compliance...........................44
Section 3.10. Annual Servicing Report.....................................44
Section 3.11. Access to Certain Documentation and Information Regarding
the Mortgage Loans..........................................44
Section 3.12. Maintenance of Certain Servicing Insurance Policies.........45
Section 3.13. Reports to the Securities and Exchange Commission...........45
Section 3.14. Tax Returns.................................................45
Section 3.15. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments
of Mortgaged Property.......................................46
ARTICLE IV
Servicing Certificate
Section 4.01. Servicing Certificate.......................................46
Section 4.02. Claims upon the Policy; Policy Payments Account.............48
Section 4.03. Replacement Policy..........................................50
Section 4.04. Effect of Payments by the Credit Enhancer; Subrogation......50
Section 4.05. Optional Advances of the Master Servicer....................51
ARTICLE V
Payments and Statements to Certificateholders; Rights of Certificateholders
Section 5.01. Distributions...............................................51
Section 5.02. Calculation of the Investor Certificate Rate................53
Section 5.03. Statements to Certificateholders............................53
Section 5.04. Rights of Certificateholders................................55
ARTICLE VI
The Certificates
Section 6.01. The Certificates............................................55
Section 6.02. Registration of Transfer and Exchange of Investor
Certificates; Appointment of Registrar......................56
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates...........58
Section 6.04. Persons Deemed Owners.......................................58
Section 6.05. Restrictions on Transfer of Transferor Certificates.........58
Section 6.06. Appointment of Paying Agent.................................60
Section 6.07. Acceptance of Obligations...................................60
ARTICLE VII
The Master Servicer, the Sponsor and the Depositor
Section 7.01. Liability of the Sponsor, the Master Servicer and the
Depositor...................................................60
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor........60
Section 7.03. Limitation on Liability of the Master Servicer and Others...61
Section 7.04. Master Servicer Not to Resign...............................61
Section 7.05. Delegation of Duties........................................62
Section 7.06. Indemnification of the Trust by the Master Servicer.........62
Section 7.07. Indemnification of the Trust by the Transferor..............62
Section 7.08. Limitation on Liability of the Transferor...................63
ARTICLE VIII
Servicing Termination
Section 8.01. Events of Servicing Termination.............................63
Section 8.02. Trustee to Act; Appointment of Successor....................65
Section 8.03. Notification to Certificateholders..........................66
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee...........................................66
Section 9.02. Certain Matters Affecting the Trustee.......................67
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans.......68
Section 9.04. Trustee May Own Certificates................................69
Section 9.05. Master Servicer to Pay Trustee's Fees and Expenses; Master
Servicer to Indemnify.......................................69
Section 9.06. Eligibility Requirements for Trustee........................70
Section 9.07. Resignation or Removal of Trustee...........................70
Section 9.08. Successor Trustee...........................................71
Section 9.09. Merger or Consolidation of Trustee..........................71
Section 9.10. Appointment of Co-Trustee or Separate Trustee...............71
Section 9.11. Limitation of Liability.....................................73
Section 9.12. Trustee May Enforce Claims Without Possession of
Certificates................................................73
Section 9.13. Suits for Enforcement.......................................73
ARTICLE X
Termination
Section 10.01. Termination.................................................73
ARTICLE XI
Rapid Amortization Events
Section 11.01. Rapid Amortization Events...................................75
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment...................................................76
Section 12.02. Recordation of Agreement....................................78
Section 12.03. Limitation on Rights of Certificateholders..................78
Section 12.04. Governing Law...............................................79
Section 12.05. Notices.....................................................79
Section 12.06. Severability of Provisions..................................80
Section 12.07. Assignment..................................................80
Section 12.08. Certificates Nonassessable and Fully Paid...................80
Section 12.09. Third-Party Beneficiaries...................................80
Section 12.10. Counterparts................................................80
Section 12.11. Effect of Headings and Table of Contents....................80
EXHIBIT A - FORM OF INVESTOR CERTIFICATE....................................A-1
EXHIBIT B - FORM OF TRANSFEROR CERTIFICATE..................................B-1
EXHIBIT C - MORTGAGE LOAN SCHEDULE..........................................C-1
EXHIBIT D - FORM OF CREDIT LINE AGREEMENT...................................D-1
EXHIBIT E - LETTER OF REPRESENTATIONS.......................................E-1
EXHIBIT F - FORM OF INVESTMENT LETTER.......................................F-1
EXHIBIT G - FORM OF REQUEST FOR RELEASE.....................................G-1
EXHIBIT H - FORM OF INITIAL CERTIFICATION...................................H-1
EXHIBIT I - FORM OF FINAL CERTIFICATION.....................................I-1
This Pooling and Servicing Agreement, dated as of November 14, 1998,
among CWABS, Inc., as Depositor (the "Depositor"), Countrywide Home Loans,
Inc., as Sponsor and Master Servicer (in such capacities, the "Sponsor" and
the "Master Servicer", respectively), and The First National Bank of Chicago,
as Trustee (the "Trustee"),
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
meanings specified in this Article.
Accelerated Principal Distribution Amount: With respect to any
Distribution Date, the amount, if any, required to reduce the Investor
Certificate Principal Balance (after giving effect to the distribution of all
other amounts actually distributed on the Investor Certificates on such
Distribution Date) so that the Invested Amount (immediately following such
Distribution Date) exceeds the Investor Certificate Principal Balance (as so
reduced) by the Required Overcollateralization Amount.
Additional Balance: As to any Mortgage Loan and day, the aggregate amount
of all Draws conveyed to the Trust pursuant to Section 2.01.
Adjustment Date: With respect to any Interest Period, the second LIBOR
Business Day preceding the first day of such Interest Period.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of
a Person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise and "controlling" and "controlled" shall
have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
Alternative Principal Payment: As to any Distribution Date, the amount
(but not less than zero) equal to Principal Collections for such Distribution
Date less the aggregate of Additional Balances created during the related
Collection Period.
Appraised Value: As to any Mortgaged Property, the value established by
any of the following: (i) with respect to Credit Line Agreements with Credit
Limits greater than $100,000, by a full appraisal, (ii) with respect to Credit
Line Agreements with Credit Limits equal to or less than $100,000, by a drive
by inspection of such Mortgaged Property made to establish compliance with the
underwriting criteria then in effect in connection with the application for
the Mortgage Loan secured by such Mortgaged Property, and (iii) with respect
to any Mortgage Loan as to which the Servicer consents to a new senior lien
pursuant to Section 3.01(a), in compliance with the underwriting criteria then
in effect in connection with the application for the related senior mortgage
loan.
Asset Balance: As to any Mortgage Loan, other than a Liquidated Mortgage
Loan, and day, the related Cut-off Date Asset Balance, plus (i) any Additional
Balance in respect of such Mortgage Loan, minus (ii) all collections credited
as principal against the Asset Balance of any such Mortgage Loan in accordance
with the related Credit Line Agreement. For purposes of this definition, a
Liquidated Mortgage Loan shall be deemed to have an Asset Balance equal to the
Asset Balance of the related Mortgage Loan immediately prior to the final
recovery of related Liquidation Proceeds and an Asset Balance of zero
thereafter.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the sale of the Mortgage to the Trustee, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction.
Available Transferor Subordinated Amount: As to any Distribution Date, an
amount equal to the lesser of (a) the Transferor Principal Balance for such
Distribution Date and (b) the Required Transferor Subordinated Amount for such
Distribution Date.
Bankruptcy Remote Entity: Any special or limited purpose corporation,
partnership or other entity structured in all material respects in accordance
with the requirements of one or more nationally recognized statistical rating
organizations and the Credit Enhancer for bankruptcy remote entities.
BIF: The Bank Insurance Fund, as from time to time constituted, created
under the Financial Institutions Reform, Recovery and Enhancement Act of 1989,
or if at any time after the execution of this instrument the Bank Insurance
Fund is not existing and performing duties now assigned to it, the body
performing such duties on such date.
Billing Cycle: With respect to any Mortgage Loan and Collection Period,
the billing period specified in the related Credit Line Agreement and with
respect to which amounts billed are received during such Collection Period.
Book-Entry Certificate: Any Investor Certificate registered in the name
of the Depository or its nominee, ownership of which is reflected on the books
of the Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the
rules of such Depository).
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the States of New York, California or
Illinois are required or authorized by law to be closed.
Certificate: An Investor Certificate or a Transferor Certificate.
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, direction, waiver or request pursuant to this Agreement,
(x) any Investor Certificate registered in the name of the Transferor, or any
Person known to a Responsible Officer to be an Affiliate of either the
Depositor or the Transferor and (y) any Investor Certificate for which the
Transferor, or any Person known to a Responsible Officer to be an Affiliate of
either the Depositor or the Transferor is the Certificate Owner shall be
deemed not to be outstanding (unless to the knowledge of a Responsible Officer
(i) the Transferor, or such Affiliate is acting as trustee or nominee for a
Person who is not an Affiliate of the Transferor and who makes the voting
decision with respect to such Investor Certificate or (ii) the Transferor, or
such Affiliate is the Certificate Owner of all the Investor Certificates) and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect any such consent, direction, waiver or request has been obtained.
Certificate Owner: The Person who is the beneficial owner of a Book-Entry
Certificate.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 6.02.
Closing Date: November 19, 1998.
Code: The Internal Revenue Code of 1986, as the same may be amended from
time to time (or any successor statute thereto).
Collection Account: The custodial account or accounts created and
maintained for the benefit of the Investor Certificateholders and the Credit
Enhancer pursuant to Section 3.02(b). The Collection Account shall be an
Eligible Account.
Collection Period: With respect to any Distribution Date and any Mortgage
Loan, the calendar month preceding the month of such Distribution Date (or, in
the case of the first Collection Period, the period from November 15, 1998
through December 31, 1998).
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan as of any
date, the percentage equivalent of the fraction, the numerator of which is the
sum of (i) the Credit Limit and (ii) the outstanding principal balance as of
the date of execution of the related original Credit Line Agreement (or any
subsequent date as of which such outstanding principal balance may be
determined in connection with an increase in the Credit Limit for such
Mortgage Loan) of any mortgage loan or mortgage loans that are senior or equal
in priority to the Mortgage Loan and which is secured by the same Mortgaged
Property and the denominator of which is the Valuation of the related
Mortgaged Property.
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate business shall be administered, which office
on the Closing Date is located at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Services Division.
Credit Enhancement Draw Amount: As to any Distribution Date, an amount
equal to the sum of (x) the amount by which the amount to be distributed to
Investor Certificateholders pursuant to Section 5.01(a)(iii) exceeds the sum
of (i) the amount of Investor Interest Collections on deposit in the
Collection Account on the Business Day preceding such Distribution Date that
is available to be applied therefor, (ii) the amount if any deposited in the
Collection Account in respect of such Distribution Date pursuant to Section
4.05 and (iii) the amount, if any, of Subordinated Transferor Collections
available to be applied therefor pursuant to Section 5.01(c), (y) the
Guaranteed Principal Distribution Amount and (z) any Preference Claim for such
Distribution Date.
Credit Enhancer: Ambac Assurance Corporation, a Wisconsin domiciled stock
insurance corporation, any successor thereto or any replacement credit
enhancer substituted pursuant to Section 4.03.
Credit Enhancer Default: The failure by the Credit Enhancer to make a
payment required under the Policy in accordance with the terms thereof.
Credit Limit: As to any Mortgage Loan, the maximum Asset Balance
permitted under the terms of the related Credit Line Agreement.
Credit Limit Utilization Rate: As to any Mortgage Loan, the percentage
equivalent of a fraction the numerator of which is the Cut-off Date Asset
Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
Credit Line Agreement: With respect to any Mortgage Loan, the related
credit line account agreement executed by the related Mortgagor and any
amendment or modification thereof.
Cumulative Loss Test Violation: As defined in the Insurance Agreement.
Cut-off Date: November 14, 1998.
Cut-off Date Asset Balance: With respect to any Mortgage Loan, the unpaid
principal balance thereof as of the Cut-off Date.
Cut-off Date Pool Balance: The Pool Balance calculated as of the Cut-off
Date.
Defective Mortgage Loan: A Mortgage Loan subject to retransfer pursuant
to Section 2.02 or 2.04.
Deficiency Amount: As defined in Section 5.01(d).
Definitive Certificates: As defined in Section 6.02(c).
Depositor: CWABS, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of Investor
Certificates evidencing $156,000,000 in initial aggregate principal amount of
the Investor Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the UCC 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 the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the third
Business Day prior to such Distribution Date.
Distribution Date: The fifteenth day of each month, or if such day is not
a Business Day, then the next Business Day, beginning in January 1999.
Draw: With respect to any Mortgage Loan, an additional borrowing by the
Mortgagor subsequent to the Cut-off Date in accordance with the related
Mortgage Note.
Due Date: As to any Mortgage Loan, the fifteenth day of the month.
Electronic Ledger: The electronic master record of home equity credit
line mortgage loans maintained by the Master Servicer or by the Sponsor, as
appropriate.
Eligible Account: (i) An account that is maintained with a depository
institution whose debt obligations throughout the time of any deposit therein
are rated in the highest short-term debt rating category by the Rating
Agencies, (ii) one or more accounts with a depository institution having a
minimum long-term unsecured debt rating of "BBB-" by Standard & Poor's and
"Baa3" by Moody's, which accounts are fully insured by either SAIF or BIF,
(iii) a segregated trust account maintained with the Trustee or an Affiliate
of the Trustee in its fiduciary capacity, or (iv) an account otherwise
acceptable to each Rating Agency and the Credit Enhancer, as evidenced at
closing by delivery of a rating letter by each Rating Agency and thereafter by
delivery of a letter from (a) each Rating Agency to the Trustee, within 30
days of receipt of notice of such deposit, to the effect that such deposit
shall not cause such Rating Agency to reduce or withdraw its then-current
rating of the Certificates without regard to the Policy and (b) from the
Credit Enhancer to the Trustee, within 30 days of receipt of notice of such
deposit, to the effect that such account is acceptable to it.
Eligible Investments: (i) obligations of the United States or any agency
thereof, provided the timely payment of 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
rating then assigned to the Certificates by any Rating Agency, without regard
to the Policy; (iii) commercial paper issued by Countrywide Home Loans, Inc.
or any of its Affiliates; provided that such commercial paper is rated no
lower than A-1 by Standard & Poor's and P-2 by Moody's, and the long-term debt
of Countrywide Home Loans, Inc. is rated at least A3 by Moody's, or such lower
ratings as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, without regard to the
Policy; (iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency, or
such lower rating as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, without regard
to the Policy; (v) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or 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
any Rating Agency, without regard to the Policy; (vi) demand or time deposits
or certificates of deposit issued by any bank or trust company or savings
institution to the extent that such deposits are fully insured by the FDIC;
(vii) guaranteed reinvestment agreements issued by any bank, insurance company
or other corporation containing, at the time of the issuance of such
agreements, such terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any Rating
Agency, without regard to the Policy; (viii) repurchase obligations with
respect to any security described in clauses (i) and (ii) above, in either
case entered into with a depository institution or trust company (acting as
principal) described in clause (v) above; (ix) securities (other than stripped
bonds, stripped coupons or instruments sold at a purchase price in excess of
115% of the face amount thereof) bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the two
highest ratings of each Rating Agency (except if the Rating Agency is Moody's,
such rating shall be the highest commercial paper rating of Moody's for any
such securities), or such lower rating as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any Rating
Agency, without regard to the Policy, as evidenced by a signed writing
delivered by each Rating Agency; (x) interests in any money market fund which
at the date of acquisition of the interests in such fund and throughout the
time such interests are held in such fund has the highest applicable rating by
each Rating Agency or such lower rating as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any Rating
Agency, without regard to the Policy; (xi) short term investment funds
sponsored by any trust company or national banking association incorporated
under the laws of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in their respective highest
applicable rating category or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any Rating Agency, without regard to the Policy; and (xii) such other
investments having a specified stated maturity and bearing interest or sold at
a discount acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any Rating Agency, without regard to the Policy, as evidenced by a signed
writing delivered by each Rating Agency; provided that no such instrument
shall be an Eligible Investment if such instrument evidences either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provided a yield to maturity at par greater
than 120% of the yield to maturity at par of the underlying obligations; and
provided, further, that no instrument described hereunder may be purchased at
a price greater than par if such instrument may be prepaid or called at a
price less than its purchase price prior to its stated maturity.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the
Sponsor for a Defective Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding Asset Balance (or in the case of a
substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an
aggregate Asset Balance), not 10% more or 10% less than the Transfer
Deficiency, if any, relating to such Defective Mortgage Loan; (ii) have a Loan
Rate not less than the Loan Rate of the Defective Mortgage Loan and not more
than 1% in excess of the Loan Rate of such Defective Mortgage Loan; (iii) have
a Loan Rate based on the same Index with adjustments to such Loan Rate made on
the same Interest Rate Adjustment Date as that of the Defective Mortgage Loan;
(iv) have a Gross Margin that is not less than the Gross Margin of the
Defective Mortgage Loan and not more than 100 basis points higher than the
Gross Margin for the Defective Mortgage Loan; (v) have a Mortgage of the same
or higher level of priority as the Mortgage relating to the Defective Mortgage
Loan at the time such Mortgage was transferred to the Trust; (vi) have a
remaining term to maturity not more than six months earlier and not more than
60 months later than the remaining term to maturity of the Defective Mortgage
Loan; (vii) comply with each representation and warranty set forth in Section
2.04 (deemed to be made as of the date of substitution); and (viii) have an
original Combined Loan-to-Value Ratio not greater than that of the Defective
Mortgage Loan. More than one Eligible Substitute Mortgage Loan may be
substituted for a Defective Mortgage Loan if such Eligible Substitute Mortgage
Loans meet the foregoing attributes in the aggregate and such substitution is
approved in writing in advance by the Credit Enhancer.
ERISA: Employee Retirement Income Security Act of 1974, as amended.
Event of Servicing Termination: As defined in Section 8.01.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Asset Balance (plus accrued and unpaid interest
thereon at the applicable Loan Rate from the date interest was last paid to
the end of the Collection Period during which such Mortgage Loan became a
Liquidated Mortgage Loan) of such Liquidated Mortgage Loan immediately prior
to the final recovery of its Liquidation Proceeds.
Gross Margin: As to any Mortgage Loan, the percentage set forth as the
"Gross Margin" for such Mortgage Loan on Exhibit C hereto.
Guaranteed Distribution: With respect to any Distribution Date, the sum
of the (i) the Guaranteed Prin cipal Distribution Amount and (ii) the amount
to be distributed to Certificateholders pursuant to Section 5.01(a)(iii) for
such Distribution Date.
Guaranteed Principal Distribution Amount: With respect to (i) any
Distribution Date on which the Available Transferor Subordinated Amount and
any Overcollateralization Amount has been reduced to or equals zero, other
than the Distribution Date in December 2024, the amount, if any, required to
reduce the Investor Certificate Principal Balance (after giving effect to the
distributions of Interest Collections and Principal Collections (including
without limitation Subordinated Transferor Collections) that are allocable to
principal on the Investor Certificates on such Distribution Date) to the
Invested Amount immediately following such Distribution Date and (ii) the
Distribution Date in December 2024, the amount by which the outstanding
Investor Certificate Principal Balance (after giving effect to Interest
Collections allocable and distributable as principal on the Investor
Certificates on such Distribution Date) exceeds the sum of the amounts on
deposit in the Collection Account available to be distributed to the Investor
Certificateholders pursuant to Section 5.01(b) hereof.
Increased Senior Lien Limitation: As defined in Section 3.01(a).
Index: With respect to each Interest Rate Adjustment Date for a Mortgage
Loan, the highest "prime rate" as published in the "Money Rates" table of The
Wall Street Journal as of the first business day of the calendar month.
Insurance Agreement: The insurance and indemnity agreement dated as of
November 19, 1998 among the Depositor, the Sponsor, the Master Servicer, the
Trustee and the Credit Enhancer, including any amendments and supplements
thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the Credit
Enhancer) pursuant to any insurance policy covering a Mortgage Loan, or
amounts required to be paid by the Master Servicer pursuant to the last
sentence of Section 3.04, net of any component thereof (i) covering any
expenses incurred by or on behalf of the Master Servicer in connection with
obtaining such proceeds, (ii) that is applied to the restoration or repair of
the related Mortgaged Property, (iii) released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures or (iv) required to be
paid to any holder of a mortgage senior to such Mortgage Loan.
Interest Collections: As to any Distribution Date, the sum of all
payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance Proceeds and
Net Liquidation Proceeds as is allocable to interest on the applicable
Mortgage Loan) collected by the Master Servicer under the Mortgage Loans
(excluding any fees (including annual fees) or late charges or similar
administrative fees paid by Mortgagors) during the related Collection Period
plus any optional advance made by the Master Service pursuant to Section 4.05
herein minus (i) the Servicing Fee payable to the Master Servicer with respect
to the related Collection Period and (ii) any such optional advance for which
the Master Service has been reimbursed. The terms of the related Credit Line
Agreement shall determine the portion of each payment in respect of such
Mortgage Loan that constitutes principal or interest.
Interest Period: With respect to any Distribution Date other than the
first Distribution Date, the period beginning on the preceding Distribution
Date and ending on the day preceding such Distribution Date, and in the case
of the first Distribution Date, the period beginning on the Closing Date and
ending on the day preceding the first Distribution Date.
Interest Rate Adjustment Date: With respect to each Mortgage Loan, any
date on which the Loan Rate is adjusted in accordance with the related Credit
Line Agreement.
Intervening Assignments: As defined in Section 2.01(iv).
Invested Amount: With respect to any Distribution Date, an amount equal
to the Original Invested Amount minus (i) the amount of Principal Collections
previously distributed to Investor Certificateholders and minus (ii) the
Investor Loss Amounts for prior Distribution Dates.
Investor Certificate: Any certificate executed and authenticated by the
Trustee substantially in the form set forth in Exhibit A hereto.
Investor Certificate Distribution Amount: As to any Distribution Date,
the sum of all amounts to be distributed to the Holders of Investor
Certificates pursuant to Article V hereof.
Investor Certificateholder: The Holder of an Investor Certificate.
Investor Certificate Interest: With respect to any Distribution Date,
interest for the related Interest Period at the applicable Investor
Certificate Rate on the Investor Certificate Principal Balance as of the first
day of such Interest Period (after giving effect to the distributions made on
the first day of such Interest Period).
Investor Certificate Principal Balance: With respect to any Distribution
Date, (a) the Original Investor Certificate Principal Balance less (b) the
aggregate of amounts actually distributed as principal on the Investor
Certificates.
Investor Certificate Rate: A per annum rate equal to, with respect to the
first Interest Period, 5.76391%, and for any subsequent Interest Period, a per
annum rate equal to the sum of (a) LIBOR as of the second LIBOR Business Day
prior to the first day of such Interest Period and (b) 0.50%; provided,
however, that in no event shall the Investor Certificate Rate with respect to
any Interest Period exceed the Maximum Rate for such Interest Period.
Investor Floating Allocation Percentage: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
Invested Amount at the close of business on the preceding Distribution Date
(or at the Closing Date in the case of the first Distribution Date) and the
denominator of which is the Pool Balance, calculated as of the beginning of
the related Collection Period.
Investor Fixed Allocation Percentage: 98.5%.
Investor Interest Collections: As to any Distribution Date, the product
of (i) the Interest Collections during the related Collection Period and (ii)
the Investor Floating Allocation Percentage for such Distribution Date.
Investor Loss Amount: With respect to any Distribution Date, the amount
equal to the product of (i) the Investor Floating Allocation Percentage for
such Distribution Date and (ii) the aggregate of the Liquidation Loss Amounts
for such Distribution Date.
Investor Loss Reduction Amount: With respect to any Distribution Date,
the portion, if any, of the Investor Loss Amount for such Distribution Date
and all prior Distribution Dates that has not been distributed to Investor
Certificateholders on such Distribution Date pursuant to Section 5.01(a)(iv)
or 5.01(a)(v) or by way of the Credit Enhancement Draw Amount.
Investor Principal Collections: As to any Distribution Date, the Investor
Fixed Allocation Percentage of Principal Collections in respect of such
Distribution Date.
LIBOR: As to any date, the rate for United States dollar deposits for one
month which appears on the Telerate Screen Page 3750 as of 11:00 A.M., London
time. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be
reasonably selected by the Depositor after consultation with the Trustee), the
rate will be the Reference Bank Rate. If no such quotations can be obtained
and no Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Distribution Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the State of New York or in the city of
London, England are required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory
or other), preference, priority right or interest or other security agreement
or preferential arrangement of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of
the foregoing and the filing of any financing statement under the UCC (other
than any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 7.02 hereof shall not be
deemed to constitute a Lien.
Lifetime Rate Cap: With respect to each Mortgage Loan with respect to
which the related Mortgage Note provides for a lifetime rate cap, the maximum
Loan Rate permitted over the life of such Mortgage Loan under the terms of the
related Credit Line Agreement, as set forth on the Mortgage Loan Schedule.
Liquidated Mortgage Loan: As to any Distribution Date, any Mortgage Loan
in respect of which the Master Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Collection
Period, that all Liquidation Proceeds which it expects to recover with respect
to the disposition of such Mortgage Loan or the related REO have been
recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead)
which are incurred by the Master Servicer in connection with the liquidation
of any Mortgage Loan and not recovered under any insurance policy, including,
without limitation, legal fees and expenses, any unreimbursed amount expended
pursuant to Section 3.06 (including, without limitation, amounts advanced to
correct defaults on any mortgage loan which is senior to such Mortgage Loan
and amounts advanced to keep current or pay off a mortgage loan that is senior
to such Mortgage Loan) respecting the related Mortgage Loan and any related
and unreimbursed expenditures with respect to real estate property taxes,
water or sewer taxes, condominium association dues, property restoration or
preservation or insurance against casualty, loss or damage.
Liquidation Loss Amount: With respect to any Distribution Date and any
Mortgage Loan that becomes a Liquidated Mortgage Loan during the related
Collection Period, the unrecovered Asset Balance thereof at the end of such
Collection Period, after giving effect to the Net Liquidation Proceeds applied
in reduction of such Asset Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not
including amounts drawn under the Policy) received in connection with the
liquidation of any Mortgage Loan or related REO, whether through trustee's
sale, foreclosure sale or otherwise.
Loan Rate: With respect to any Mortgage Loan and as of any day, the per
annum rate of interest applicable under the related Credit Line Agreement to
the calculation of interest for such day on the Asset Balance of such Mortgage
Loan.
Loan Rate Cap: With respect to each Mortgage Loan, the lesser of (i) the
Lifetime Rate Cap, if any, or (ii) the applicable state usury ceiling, if
any.
Loan-to-Value Ratio: As of any date of determination with respect to any
mortgage loan, the percentage equivalent of a fraction, the numerator of which
is the outstanding principal balance of such mortgage loan as of such date of
determination and the denominator of which is the Valuation of the related
Mortgage Property.
Managed Amortization Period: The period from the Closing Date to and
including the Distribution Date in December 2003.
Master Servicer: Countrywide Home Loans, Inc., a New York corporation and
any successor thereto and any successor hereunder.
Maximum Principal Payment: With respect to any Distribution Date, the
Investor Fixed Allocation Percentage of the Principal Collections for such
Distribution Date.
Maximum Rate: As to any Interest Period, the Weighted Average Net Loan
Rate for the Collection Period during which such Interest Period begins
(adjusted to an effective rate reflecting accrued interest calculated on the
basis of the actual number of days in the Collection Period commencing in the
month in which such Interest Period commences and a year assumed to consist of
360 days).
Minimum Monthly Payment: With respect to any Mortgage Loan and any month,
the minimum amount required to be paid by the related Mortgagor in that month.
Minimum Transferor Interest: With respect to any date, an amount equal to
the lesser of (a) 5% of the Pool Balance on such date and (b) the Transferor
Principal Balance as of the Closing Date.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: The mortgage loans, including Additional Balances with
respect thereto, that are transferred and assigned to the Trustee pursuant to
Section 2.01, together with all related Mortgage Files, exclusive of Mortgage
Loans that are retransferred to the Depositor, the Master Servicer or the
Sponsor or purchased by the Master Servicer from time to time pursuant to
Section 2.02, 2.04, 2.05, 2.06 or 3.06, as from time to time are held as a
part of the Trust. The Mortgage Loans originally so held are identified in the
Mortgage Loan Schedule delivered on the Closing Date. The Mortgage Loans shall
also include any Eligible Substitute Mortgage Loan substituted by the Sponsor
for a Defective Mortgage Loan pursuant to Sections 2.02 and 2.04.
Mortgage Loan Schedule: With respect to any date, the schedule of
Mortgage Loans included in the Trust on such date. The initial schedule of
Mortgage Loans as of the Cut-off Date is the schedule set forth herein as
Exhibit C, which schedule sets forth as to each Mortgage Loan (i) the Cut-off
Date Asset Balance, (ii) the Credit Limit, (iii) the Gross Margin, (iv) the
Lifetime Rate Cap, (v) the account number, (vi) the current Loan Rate, (vii)
the Combined Loan-to-Value Ratio, (viii) a code specifying the property type,
(ix) a code specifying documentation type and (x) a code specifying lien
position. The Mortgage Loan Schedule will be deemed to be amended from time to
time to reflect Additional Balances.
Mortgage Note: With respect to a Mortgage Loan, the Credit Line Agreement
pursuant to which the related mortgagor agrees to pay the indebtedness
evidenced thereby and secured by the related Mortgage.
Mortgaged Property: The underlying property, including any real property
and improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Credit Line Agreement.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: With respect to any Mortgage Loan and as to any day, the
Loan Rate less the Servicing Fee Rate, the Premium Percentage, the Trustee Fee
Rate and, commencing with the Distribution Date in January 2000, 0.50% per
annum.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor, the Transferor or the Master Servicer, or (ii),
if provided for in this Agreement, signed by a Servicing Officer, as the case
may be, and delivered to the Depositor and the Trustee, as the case may be, as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee, who may be in-house counsel for the Depositor, the Sponsor, the
Master Servicer or the Transferor (except that any opinion pursuant to
Sections 4.03 or 7.04 or relating to taxation must be an opinion of
independent outside counsel) and who, in the case of opinions delivered to the
Credit Enhancer or the Rating Agency, is reasonably acceptable to it.
Original Invested Amount: $156,000,000.
Original Investor Certificate Principal Balance: $156,000,000.
Overcollateralization Amount: At the time of reference thereto, the
amount, if any, by which the Invested Amount exceeds the Investor Certificate
Principal Balance.
Overcollateralization Step-Down Amount: With respect to any Distribution
Date, the lesser of (i) the Scheduled Principal Collections Distribution
Amount without giving effect to the proviso in the definition thereof and (ii)
the excess of the Overcollateralization Amount over the Required
Overcollateralization Amount for such Distribution Date.
Paying Agent: Any paying agent appointed pursuant to Section 6.06.
Percentage Interest: As to any Investor Certificate, the percentage
obtained by dividing the principal denomination of such Investor Certificate
by the Original Investor Certificate Principal Balance of such Certificate.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Policy: The certificate guaranty insurance policy number AB0207BE, and
all endorsements thereto, dated as of the Closing Date, issued by the Credit
Enhancer to the Trustee for the benefit of the Investor Certificateholders.
Policy Payments Account: As defined in Section 4.02(b).
Pool Balance: With respect to any date, the aggregate of the Asset
Balances of all Mortgage Loans as of such date.
Pool Factor: With respect to any Distribution Date, the percentage,
carried to seven places, obtained by dividing the Investor Certificate
Principal Balance for such Distribution Date by the Original Investor
Certificate Principal Balance.
Preference Claim: As defined in Section 4.02(d).
Premium: As defined in the Insurance Agreement.
Premium Percentage: As defined in the Insurance Agreement.
Principal Collections: As to any Distribution Date, the sum of all
payments by or on behalf of Mortgagors and any other amounts constituting
principal (including but not limited to any portion of Insurance Proceeds or
Net Liquidation Proceeds allocable to principal of the applicable Mortgage
Loan, and Transfer Deposit Amounts, but excluding Foreclosure Profits)
collected by the Master Servicer under the Mortgage Loans during the related
Collection Period. The terms of the related Credit Line Agreement shall
determine the portion of each payment in respect of a Mortgage Loan that
constitutes principal or interest.
Purchase Agreement: The Purchase Agreement, dated as of the Cut-off Date,
between Countrywide Home Loans, Inc., as seller, and the Depositor, as
purchaser, with respect to the Mortgage Loans.
Rapid Amortization Commencement Date: The earlier of (i) the Distribution
Date in January 2004 and (ii) the Distribution Date next succeeding the
Collection Period in which a Rapid Amortization Event is deemed to occur
pursuant to Section 11.01.
Rapid Amortization Event: As defined in Section 11.01.
Rapid Amortization Period: The period following the Managed Amortization
Period until the termination of the Trust pursuant to Section 10.01.
Rated Entity: A Person whose long-term unsecured debt obligations (at the
time of the transfer under Section 6.05(c)) are rated at least "A3" by Moody's
or "A" by Standard & Poor's.
Rating Agency: Any statistical credit rating agency, or its successor,
that rated the Investor Certificates at the request of the Depositor at the
time of the initial issuance of the Certificates. If such agency or a
successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency, or other comparable Person, designated by the Depositor
and the Credit Enhancer, notice of which designation shall be given to the
Trustee. References herein to the highest short-term unsecured rating category
of a Rating Agency shall mean A-1+ or better in the case of Standard & Poor's
and P-1 or better in the case of Moody's and in the case of any other Rating
Agency shall mean the ratings such other Rating Agency deems equivalent to the
foregoing ratings. References herein to the highest long-term rating category
of a Rating Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa"
in the case of Moody's and in the case of any other Rating Agency, the rating
such other Rating Agency deems equivalent to the foregoing ratings.
Record Date: The last day preceding the related Distribution Date;
provided, however, that following the date on which Definitive Certificates
are available pursuant to Section 6.02(c) the Record Date shall be the last
day of the calendar month preceding the month in which the related
Distribution Date occurs.
Reference Bank Rate: As to any Interest Period as follows: the arithmetic
mean (rounded upwards, if necessary, to the nearest one sixteenth of a
percent) of the offered rates for United States dollar deposits for one month
which are offered by the Reference Banks as of 11:00 A.M., London time, on the
second LIBOR Business Day prior to the first day of such Interest Period to
prime banks in the London interbank market for a period of one month in
amounts approximately equal to the outstanding Investor Certificate Principal
Balance; provided that at least two such Reference Banks provide such rate. If
fewer than two offered rates appear, the Reference Bank Rate will be the
arithmetic mean of the rates quoted by one or more major banks in New York
City, selected by the Depositor after consultation with the Trustee, as of
11:00 A.M., New York City time, on such date for loans in U.S. dollars to
leading European banks for a period of one month in amounts approximately
equal to the outstanding Investor Certificate Principal Balance. If no such
quotations can be obtained, the Reference Bank Rate shall be LIBOR applicable
to the preceding Interest Period.
Reference Banks: Three major banks that are engaged in transactions in
the London interbank market, selected by the Depositor after consultation with
the Trustee.
REO: A Mortgaged Property that is acquired by the Trust in foreclosure or
by deed in lieu of foreclosure.
Required Amount: With respect to any Distribution Date, the amount, if
any, by which the sum of the amounts distributable pursuant to Sections
5.01(a)(i) through 5.01(a)(iv) on such Distribution Date exceed Investor
Interest Collections for such Distribution Date.
Required Overcollateralization Amount: As defined in the Insurance
Agreement.
Required Transferor Subordinated Amount: As defined in the Insurance
Agreement.
Responsible Officer: When used with respect to the Trustee, any officer
of the Trustee with direct responsibility for the administration of this
Agreement and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
Revolving Period: With respect to each Mortgage Loan, the period
specified for such Mortgage Loan in the related Credit Line Agreement, during
which the Mortgagor is permitted to make Draws.
Rolling Six Month Delinquency Rate: As defined in the Insurance
Agreement.
SAIF: The Savings Association Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Savings Association Insurance Fund is not existing and
performing duties now assigned to it, the body performing such duties on such
date.
Scheduled Principal Collections Distribution Amount: With respect to any
Distribution Date during the Managed Amortization Period and the Investor
Certificates, an amount equal to the lesser of (i) the Maximum Principal
Payment and (ii) the Alternative Principal Payment; provided, however, that on
any Distribution Date, such amount shall be reduced by the
Overcollateralization Step-Down Amount for such Distribution Date. With
respect to any Distribution Date in respect of the Rapid Amortization Period,
the Maximum Principal Payment; provided, however, that on any Distribution
Date, such amount shall be reduced by the Overcollateralization Step-Down
Amount for such Distribution Date.
Servicing Certificate: A certificate completed and executed by a
Servicing Officer in accordance with Section 4.01.
Servicing Fee: With respect to any Distribution Date, the product of (i)
the Servicing Fee Rate divided by 12 and (ii) the aggregate Asset Balance of
the Mortgage Loans as of the first day of the Collection Period preceding such
Distribution Date (or as of the close of business on the Cut-off Date with
respect to the first Distribution Date).
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished
to the Trustee (with a copy to the Credit Enhancer) by the Master Servicer on
the Closing Date, as such list may be amended from time to time.
Sponsor: Countrywide Home Loans, Inc., a New York corporation and any
successor thereto.
Standard & Poor's: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., or its successor in interest.
Subordinated Transferor Collections: With respect to any Distribution
Date, Interest Collections and Principal Collections allocable to the
Transferor Interest on such Distribution Date up to the Available Transferor
Subordinated Amount for such Distribution Date.
Telerate Screen Page 3750: The display designated as page 3750 on the
Bridge Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London inter-bank offered rates of major
banks).
Transfer Date: As defined in Section 2.06.
Transfer Deficiency: As defined in Section 2.02(b).
Transfer Deposit Amount: As defined in Section 2.02(b).
Transfer Notice Date: As defined in Section 2.06.
Transferor or Transferor Certificateholders: The Holders of the
Transferor Certificates.
Transferor Certificates: The certificates executed and authenticated by
the Trustee substantially in the form set forth in Exhibit B hereto.
Transferor Collections: As to any period, the sum of Transferor Interest
Collections and Transferor Principal Collections for such period.
Transferor Interest Collections: Interest Collections that are not
Investor Interest Collections.
Transferor Principal Balance: As of any date of determination, the amount
equal to (i) the Pool Balance as of the close of business on the day next
preceding such date of determination less (ii) the Invested Amount as of the
close of business on the preceding Distribution Date.
Transferor Principal Collections: On any Distribution Date, Principal
Collections received during the related Collection Period minus the amount of
such Principal Collections required to be distributed to Investor
Certificateholders pursuant to Section 5.01(b).
Trust: The trust created by this Agreement, the corpus of which consists
of the Mortgage Loans, related Credit Line Agreements such other assets as
shall from time to time be identified as deposited in the Collection Account
in accordance with this Agreement, property that secured a Mortgage Loan and
that has become REO, the interest of the Depositor in certain hazard insurance
policies maintained by the Mortgagors or the Master Servicer in respect of the
Mortgage Loans, the Policy, an assignment of the Depositor's rights under the
Purchase Agreement and all proceeds of each of the foregoing (exclusive of
payments of accrued interest on the Mortgage Loans which are due on or prior
to the Cut-off Date).
Trustee: The First National Bank of Chicago or any successor Trustee
appointed in accordance with this Agreement that has accepted such appointment
in accordance with this Agreement.
Trustee Fee: A fee which is separately agreed to between the Master
Servicer and the Trustee.
Trustee Fee Rate: The per annum rate at which the Trustee Fee is
calculated.
UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.
Unpaid Investor Certificate Interest Shortfall: With respect to any
Distribution Date, the aggregate amount, if any, of Investor Certificate
Interest that was accrued in respect of a prior Distribution Date and has not
been distributed to Investor Certificateholders.
Valuation: With respect to any Mortgaged Property, the lesser of (i) the
Appraised Value of the Mortgaged Property and (ii) in the case of a Mortgaged
Property purchased within one year of the origination of the related Mortgage
Loan, the purchase price of the Mortgaged Property.
Weighted Average Net Loan Rate: As to any Collection Period, the average
of the daily Net Loan Rate for each Mortgage Loan (assuming that each Mortgage
Loan is fully indexed) for each day during the related Billing Cycle, weighted
on the basis of the daily average of the related Asset Balances outstanding
for each day in such Billing Cycle for each Mortgage Loan as determined by the
Master Servicer in accordance with the Master Servicer's normal servicing
procedures.
Section 1.02. Interest Calculations. All calculations of interest
hereunder that are made in respect of the Asset Balance of a Mortgage Loan
shall be made on a daily basis using a 365-day year. All calculations of
interest on the Investor Certificates shall be made on the basis of the actual
number of days in an Interest Period and a year assumed to consist of 360
days. The calculation of the Servicing Fee shall be made on the basis of a
360-day year consisting of twelve 30-day months. All dollar amounts calculated
hereunder shall be rounded to the nearest cent with one-half of one cent being
rounded down.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates;
Tax Treatment
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to
Fund Advances Under Credit Line Agreements. (a) The Depositor, concurrently
with the execution and delivery of this Agreement, does hereby transfer,
assign, set over and otherwise convey to the Trust without recourse (subject
to Sections 2.02 and 2.04) all of its right, title and interest in and to (i)
each Mortgage Loan, including its Asset Balance (including all Additional
Balances) and all collections in respect thereof received after the Cut-off
Date (excluding payments in respect of accrued interest due on or prior to the
Cut-off Date); (ii) property that secured a Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure; (iii) the Depositor's rights under
the Purchase Agreement; (iv) the Depositor's rights under the hazard insurance
policies; (v) all other assets included or to be included in the Trust for the
benefit of Certificateholders and the Credit Enhancer; and (vi) all proceeds
of the foregoing; provided, however, neither the Trustee nor the Trust assumes
the obligation under any Credit Line Agreement that provides for the funding
of future advances to the Mortgagor thereunder, and neither the Trust nor the
Trustee shall be obligated or permitted to fund any such future advances.
Additional Balances shall be part of the related Asset Balance and are hereby
transferred to the Trust on the Closing Date pursuant to this Section 2.01,
and therefore part of the Trust property. In addition, on or prior to the
Closing Date, the Depositor shall cause the Credit Enhancer to deliver the
Policy to the Trustee for the benefit of the Investor Certificateholders. The
foregoing transfer, assignment, set-over and conveyance to the Trust shall be
made to the Trustee, on behalf of the Trust, and each reference in this
Agreement to such transfer, assignment, set-over and conveyance shall be
construed accordingly.
The Depositor agrees (subject to paragraph (c) below) to take or cause to
be taken such actions and execute such documents, including without
limitation, the filing of all necessary continuation statements for the UCC-1
financing statements filed in the State of California (which shall have been
filed within 90 days of the Closing Date) describing the Cut-off Date Asset
Balances and Additional Balances and naming the Depositor as debtor and the
Trustee as secured party and any amendments to UCC-1 financing statements
required to reflect a change in the name or corporate structure of the
Depositor or the filing of any additional UCC-1 financing statements due to
the change in the principal office of the Depositor (within 90 days of any
event necessitating such filing) as are necessary to perfect and protect the
Certificateholders' and Credit Enhancer's interests in each Cut-off Date Asset
Balance and Additional Balances and the proceeds thereof.
In connection with such transfer and assignment by the Depositor, the
Depositor shall deliver or cause the Sponsor to deliver to the Trustee within
thirty (30) days following the Closing Date the following documents or
instruments with respect to each Mortgage Loan:
(i) the original Mortgage Note endorsed in blank;
(ii) an original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage or, if, in connection with any
Mortgage Loan, the original recorded Mortgage with evidence of recording
thereon cannot be delivered on or prior to the Closing Date because of a
delay caused by the public recording office where such original Mortgage
has been delivered for recordation or because such original Mortgage has
been lost, the Sponsor, at the direction of the Depositor, shall deliver
or cause to be delivered to the Custodian, as agent for the Trustee, a
true and correct copy of such Mortgage, together with (i) in the case of
a delay caused by the public recording office, an Officer's Certificate
of the Depositor stating that such original Mortgage has been dispatched
to the appropriate public recording official or (ii) in the case of an
original Mortgage that has been lost, a certificate by the appropriate
county recording office where such Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if any
("Intervening Assignments"), with evidence of recording thereon, showing
a complete chain of title to the Mortgage from the originator to the
Depositor or, if any such original Intervening Assignment has not been
returned from the applicable recording office or has been lost, a true
and correct copy thereof, together with (i) in the case of a delay caused
by the public recording office, an Officer's Certificate of the Sponsor
stating that such original Intervening Assignment has been dispatched to
the appropriate public recording official for recordation or (ii) in the
case of an original Intervening Assignment that has been lost, a
certificate by the appropriate county recording office where such
Mortgage is recorded;
(v) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(vi) the original of any guaranty executed in connection with the
Mortgage Note;
(vii) the original of each assumption, modification, consolidation
or substitution agreement, if any, relating to the Mortgage Loan; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage;
provided, however, that as to any Mortgage Loan, if (a) as evidenced by an
Opinion of Counsel delivered to and in form and substance satisfactory to the
Trustee and the Credit Enhancer, (x) an optical image or other representation
of the related documents specified in clauses (i) through (vii) above are
enforceable in the relevant jurisdictions to the same extent as the original
of such document and (y) such optical image or other representation does not
impair the ability of an owner of such Mortgage Loan to transfer its interest
in such Mortgage Loan, and (b) the retention of such documents in such format
will not result in a reduction in the then current rating of the Investor
Certificates, without regard to the Policy, such optical image or other
representation may be held by the Trustee or assignee in lieu of the physical
documents specified above.
The Sponsor hereby confirms to the Trustee that it has caused the
portions of the Electronic Ledgers relating to the Mortgage Loans to be
clearly and unambiguously marked, and has made the appropriate entries in its
general accounting records, to indicate that such Mortgage Loans have been
transferred to the Trust at the direction of the Depositor. The Master
Servicer hereby confirms to the Trustee that it has clearly and unambiguously
made appropriate entries in its general accounting records indicating that
such Mortgage Loans constitute part of the Trust and are serviced by it on
behalf of the Trust in accordance with the terms hereof.
Notwithstanding the characterization of the Investor Certificates as debt
for Federal, state and local income and franchise tax purposes, the parties
hereto intend to treat the transfer of the Mortgage Loans as provided herein
as a sale for accounting and other purposes, by the Depositor to the Trust of
all the Depositor's right, title and interest in and to the Mortgage Loans and
other property described above. In the event such transfer is deemed not to be
a sale as contemplated in the immediately preceding sentence, the Depositor
hereby grants to the Trust a security interest in all of the Depositor's
right, title and interest in, to and under the Mortgage Loans whether now
existing or hereafter created, all monies due or to become due on the Mortgage
Loans and all proceeds of any thereof; and this Agreement shall constitute a
security agreement under applicable law.
(b) In the event that neither the Depositor nor the Sponsor delivers the
Mortgage File for any Mortgage Loan to the Trustee as and when required
pursuant to paragraph (a) of this Section 2.01, such Mortgage Loan shall be
deemed to be retransferred, reassigned and otherwise reconveyed to the
Sponsor, subject to the conditions set forth in Section 2.02(b) (as if such
Mortgage Loan were otherwise subject to the provisions thereof). In the event
of a Transfer Deficiency, the Sponsor, within five (5) Business Days of
notification thereof by the Trustee, shall substitute an Eligible Substitute
Mortgage Loan for the related Mortgage Loan or, if unable to effect such
substitution, deposit into the Collection Account the Transfer Deposit Amount
in immediately available funds equal to the Transfer Deficiency (or a
combination of substitution and deposit). Any such substitution or deposit
shall be accomplished in the manner specified in, and have the effect set
forth in, Section 2.02(b) (as if the related Mortgage Loan were otherwise
subject to the provisions thereof).
(c) Should the long term senior unsecured corporate debt rating of
Countrywide Home Loans, Inc. fall below "BBB" by Standard & Poor's or "Baa2"
by Xxxxx'x, as promptly as practicable but in no event more than 90 days
following the occurrence of such event, the Master Servicer shall, at its
expense, (i) either (x) request that the Trustee deliver to it the original
Assignment of Mortgage previously delivered to the Trustee pursuant to
paragraph (v)(ii) of this Section 2.01 and thereupon record such Assignment of
Mortgage in favor of the Trustee (which may be a blanket assignment if
permitted by applicable law) in the appropriate real property or other records
or (y) deliver to the Trustee an Opinion of Counsel addressed to the Trustee
and the Credit Enhancer to the effect that recording is not required to
protect the Trustee's right, title and interest in and to the related Mortgage
Loan or, in case a court should recharacterize the sale of the Mortgage Loans
as a financing, to perfect a first priority security interest in favor of the
Trustee in the related Mortgage Loan, which Opinion of Counsel also shall be
reasonably acceptable to each of the Rating Agencies (as evidenced in writing)
and the Credit Enhancer.
Section 2.02. Acceptance by Trustee. (a) The Trustee hereby acknowledges
its receipt of the Policy and declares that the Trustee holds and will hold
such Policy, and will hold all other documents delivered to it pursuant to
Section 2.01, and all amounts received by it thereunder and hereunder, in
trust, upon the terms herein set forth, for the use and benefit of all present
and future Certificateholders and the Credit Enhancer.
On the day the Mortgage Files are delivered to the Trustee pursuant to
the third paragraph of Section 2.01, the Trustee shall execute and deliver to
the Depositor, the Master Servicer and the Sponsor (with a copy to the Credit
Enhancer) an Initial Certification in the form annexed hereto as Exhibit H.
Based on its review and examination, and only as to the documents identified
in such Initial Certification, the Trustee shall acknowledge that such
documents appear regular on their face and relate to each Mortgage Loan.
Not later than 180 days after the Closing Date, the Trustee shall deliver
to the Depositor, the Master Servicer and the Sponsor (with a copy to the
Credit Enhancer) a Final Certification in the form annexed hereto as Exhibit
I, with any applicable exceptions noted thereon.
If, in the course of its review in connection with the Final
Certification, 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. The
Sponsor shall promptly correct or cure such defect within 90 days from the
date it was so notified of such defect.
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.
In reviewing any Mortgage File pursuant to this Section, the Trustee
shall have no responsibility for determining whether any document is valid and
binding, whether the text of any assignment or endorsement is in proper or
recordable form (except, if applicable, to determine if the Trustee is the
assignee or endorsee), whether any document has been recorded in accordance
with the requirements of any applicable jurisdiction, or whether a blanket
assignment is permitted in any applicable jurisdiction, whether any Person
executing any document is authorized to do so or whether any signature thereon
is genuine, but shall only be required to determine whether a document has
been executed, that it appears to be what it purports to be, and, where
applicable, that it purports to be recorded.
(b) If (i) the time to correct or cure any defect in respect of any
Mortgage Loan of which the Trustee has notified the Sponsor and the Depositor
following the review pursuant to subsection (a) above has expired or if at any
time any loss is suffered by the Trustee on behalf of the Certificateholders
or the Credit Enhancer, in respect of any Mortgage Loan as a result of a
defect in any document constituting a part of its Mortgage File, or (ii) an
Assignment of Mortgage to the Trustee has not been recorded if, as and when
required by subsection (a) above, then on the next succeeding Business Day
upon the deposit to the Collection Account of the Transfer Deposit Amount, if
any, and upon satisfaction of the applicable conditions described herein, all
right, title and interest of the Trust in and to such Mortgage Loan shall be
deemed to be retransferred, reassigned and otherwise reconveyed, without
recourse, representation or warranty, to the Sponsor on such Business Day and
the Asset Balance of such Mortgage Loan shall be deducted from the Pool
Balance; provided, however, that interest accrued on the Asset Balance of such
Mortgage Loan to the end of the related Collection Period shall be the
property of the Trust. The Trustee shall determine if the reduction of such
Asset Balance from the Pool Balance in accordance with the preceding sentence
would cause the Transferor Principal Balance to be less than the Minimum
Transferor Interest ("Transfer Deficiency"), in which event the Trustee shall
deliver written notice of such deficiency to the Sponsor, and within five
Business Days after the Business Day of such retransfer the Sponsor shall
either (x) substitute an Eligible Substitute Mortgage Loan or (y) deposit into
the Collection Account an amount (the "Transfer Deposit Amount") in
immediately available funds equal to the Transfer Deficiency or a combination
of both (x) and (y) above. Such reduction or substitution and the actual
payment of any Transfer Deposit Amount, if any, shall be deemed to be payment
in full for such Mortgage Loan. Upon receipt of any Eligible Substitute
Mortgage Loan or of written notification signed by a Servicing Officer to the
effect that the Transfer Deposit Amount in respect of a Defective Mortgage
Loan has been deposited into the Collection Account or, if the Transferor
Principal Balance is not reduced below the Minimum Transferor Interest as a
result of the deemed retransfer of a Defective Mortgage Loan, then as promptly
as practicable following such deemed transfer, the Trustee shall execute such
documents and instruments of transfer presented by the Sponsor, in each case
without recourse, representation or warranty, and take such other actions as
shall reasonably be requested by the Sponsor to effect such transfer by the
Trust of such Defective Mortgage Loan pursuant to this Section. It is
understood and agreed that the obligation of the Sponsor to accept a transfer
of a Defective Mortgage Loan and to either convey an Eligible Substitute
Mortgage Loan or to make a deposit of any related Transfer Deposit Amount into
the Collection Account shall constitute the sole remedy respecting such defect
available to Certificateholders, the Trustee and the Credit Enhancer against
the Sponsor.
The Master Servicer, promptly following the transfer of a Defective
Mortgage Loan from or to the Trust pursuant to this Section, shall amend the
Mortgage Loan Schedule and make appropriate entries in its general account
records to reflect such transfer. The Master Servicer shall, following such
retransfer, appropriately xxxx its records to indicate that it is no longer
servicing such Mortgage Loan on behalf of the Trust. The Sponsor, promptly
following such transfer, shall appropriately xxxx its Electronic Ledger and
make appropriate entries in its general account records to reflect such
transfer.
Notwithstanding any other provision of this Section, a retransfer of a
Defective Mortgage Loan to the Sponsor pursuant to this Section that would
cause the Transferor Principal Balance to be less than the Minimum Transferor
Interest shall not occur if either the Sponsor fails to convey an Eligible
Substitute Mortgage Loan or to deposit into the Collection Account any related
Transfer Deposit Amount required by this Section with respect to the transfer
of such Defective Mortgage Loan.
(c) As to any Eligible Substitute Mortgage Loan or Loans, the Sponsor
shall deliver to the Trustee with respect to such Eligible Substitute Mortgage
Loan or Loans such documents and agreements as are required to be held by the
Trustee in accordance with Section 2.01. For any Collection Period during
which the Sponsor substitutes one or more Eligible Substitute Mortgage Loans,
the Master Servicer shall determine the Transfer Deposit Amount which amount
shall be deposited by the Sponsor in the Collection Account at the time of
substitution. All amounts received in respect of the Eligible Substitute
Mortgage Loan or Loans during the Collection Period in which the circumstances
giving rise to such substitution occur shall not be a part of the Trust and
shall not be deposited by the Master Servicer in the Collection Account. All
amounts received by the Master Servicer during the Collection Period in which
the circumstances giving rise to such substitution occur in respect of any
Defective Mortgage Loan so removed by the Trust shall be deposited by the
Master Servicer in the Collection Account. Upon such substitution, the
Eligible Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects, and the Sponsor shall be deemed to have made
with respect to such Eligible Substitute Mortgage Loan or Loans, as of the
date of substitution, the covenants, representations and warranties set forth
in Section 2.04. The procedures applied by the Sponsor in selecting each
Eligible Substitute Mortgage Loan shall not be materially adverse to the
interests of the Trustee, the Certificateholders and the Credit Enhancer.
(d) 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.
Section 2.03. Representations and Warranties Regarding the Master
Servicer. The Master Servicer represents and warrants to the Trustee and the
Credit Enhancer that as of the Closing Date:
(i) The Master Servicer is a New York corporation, validly existing
and in good standing under the laws of the State of New York, and has the
corporate power to own its assets and to transact the business in which
it is currently engaged. The Master Servicer is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
any properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on
the business, properties, assets, or condition (financial or other) of
the Master Servicer;
(ii) The Master Servicer has the power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary corporate
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of the Master Servicer
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies;
(iii) The Master Servicer is not required to obtain the consent of
any other party or any consent, license, approval or authorization from,
or registration or declaration with, any governmental authority, bureau
or agency in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, except for such consent,
license, approval or authorization, or registration or declaration, as
shall have been obtained or filed, as the case may be, prior to the
Closing Date;
(iv) The execution, delivery and performance of this Agreement by
the Master Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the Master
Servicer or any provision of the Certificate of Incorporation or Bylaws
of the Master Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Master Servicer is a
party or by which the Master Servicer may be bound; and
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the
knowledge of the Master Servicer threatened, against the Master Servicer
or any of its properties or with respect to this Agreement or the
Certificates which in the opinion of the Master Servicer has a reasonable
likelihood of resulting in a material adverse effect on the transactions
contemplated by this Agreement.
The representations and warranties set forth in this Section shall survive the
sale and assignment of the Mortgage Loans to the Trust. Upon discovery of a
breach of any representations and warranties which materially and adversely
affects the interests of the Certificateholders or the Credit Enhancer, the
person discovering such breach shall give prompt written notice to the other
parties and to the Credit Enhancer. Within 90 days of its discovery or its
receipt of notice of breach, or, with the prior written consent of a
Responsible Officer of the Trustee, such longer period specified in such
consent, the Master Servicer shall cure such breach in all material respects.
Section 2.04. Representations and Warranties of the Sponsor Regarding the
Mortgage Loans; Retransfer of Certain Mortgage Loans. (a) The Sponsor hereby
represents and warrants to the Trustee and the Credit Enhancer that as of the
Cut-off Date, unless otherwise specifically set forth herein:
(i) As of the Closing Date, this Agreement constitutes a legal,
valid and binding obligation of the Sponsor, enforceable against the
Sponsor in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement
of creditors' rights generally and by the availability of equitable
remedies;
(ii) As of the Closing Date with respect to the Mortgage Loans and
as of the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, either (A) the Purchase Agreement constitutes a
valid transfer and assignment to the Depositor of all right, title and
interest of the Sponsor in and to the Cut-off Date Asset Balances with
respect to the applicable Mortgage Loans, all monies due or to become due
with respect thereto (excluding payments in respect of accrued interest
due on or prior to the Cut-off Date), and all proceeds of such Cut-off
Date Asset Balances with respect to the Mortgage Loans and such funds as
are from time to time deposited in the Collection Account (excluding any
investment earnings thereon) and all other property specified in the
first paragraph of Section 2.01 as being part of the corpus of the Trust
conveyed to the Trust by the Sponsor, and upon payment for the Additional
Balances, will constitute a valid transfer and assignment to the Trustee
of all right, title and interest of the Sponsor in and to the Additional
Balances, all monies due or to become due with respect thereto, and all
proceeds of such Additional Balances and all other property specified in
the first paragraph of Section 2.01(a) relating to the Additional
Balances or (B) the Purchase Agreement or this Agreement, as appropriate,
constitutes a grant of a security interest (as defined in the UCC as in
effect in California) in such property to the Trustee on behalf of the
Trust. If this Agreement constitutes the grant of a security interest to
the Trust in such property, the Trust shall have a first priority
perfected security interest in such property, subject to the effect of
Section 9-306 of the UCC with respect to collections on the Mortgage
Loans that are deposited in the Collection Account in accordance with the
next to last paragraph of Section 3.02(b);
(iii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan and as of the date any Additional Balance is
created, the information set forth in the Mortgage Loan Schedule for such
Mortgage Loans is true and correct in all material respects;
(iv) The applicable Cut-off Date Asset Balance has not been assigned
or pledged, and the Sponsor is the sole owner and holder of such Cut-off
Date Asset Balance free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature, and has full right and authority, under
all governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loan, to sell, assign or transfer
the same pursuant to the Purchase Agreement;
(v) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage Note and the Mortgage with
respect to each Mortgage Loan have not been assigned or pledged, and
immediately prior to the sale of the Mortgage Loans to the Depositor, the
Sponsor was the sole owner and holder of the Mortgage Loan free and clear
of any and all liens, claims, encumbrances, participation interests,
equities, pledges, charges or security interests of any nature, and has
full right and authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of the applicable Mortgage Loans,
to sell and assign the same pursuant to the Purchase Agreement;
(vi) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage is a valid and subsisting
first or second lien, as set forth on the Mortgage Loan Schedule with
respect to each related Mortgage Loan, on the property therein described,
and as of the Cut-off Date the related Mortgaged Property is free and
clear of all encumbrances and liens having priority over the first or
second lien, as applicable, of such Mortgage except for liens for (i)
real estate taxes and special assessments not yet delinquent; (ii) any
first mortgage loan secured by such Mortgaged Property and specified on
the Mortgage Loan Schedule; (iii) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of the
date of recording that are acceptable to mortgage lending institutions
generally; and (iv) 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;
(vii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, there is no valid offset, defense or
counterclaim of any obligor under any Credit Line Agreement or Mortgage;
(viii) To the best knowledge of the Sponsor, as of the Closing Date
with respect to the Mortgage Loans and the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan, there
is no delinquent recording or other tax or fee or assessment lien against
any related Mortgaged Property;
(ix) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, there is no proceeding pending or, to the best
knowledge of the Sponsor, threatened for the total or partial
condemnation of the related Mortgaged Property, and such property is free
of material damage;
(x) To the best knowledge of the Sponsor, as of the Closing Date
with respect to the Mortgage Loans and the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan, there
are no mechanics' or similar liens or claims which have been filed for
work, labor or material affecting the related Mortgaged Property which
are, or may be, liens prior or equal to the lien of the related Mortgage,
except liens which are fully insured against by the title insurance
policy referred to in clause (xiv);
(xi) No Minimum Monthly Payment is more than 59 days delinquent
(measured on a contractual basis) and no Mortgage Loans (by Cut-off Date
Pool Balance) were 30-59 days delinquent (measured on a contractual
basis);
(xii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, for each Mortgage Loan, the related Mortgage
File contains each of the documents and instruments specified to be
included therein;
(xiii) The related Mortgage Note and the related Mortgage at
origination complied in all material respects with applicable state and
federal laws, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws applicable to the Mortgage Loan;
(xiv) Either a lender's title insurance policy or binder was issued
on the date of origination of the Mortgage Loan and each such policy is
valid and remains in full force and effect, or a title search or guaranty
of title customary in the relevant jurisdiction was obtained with respect
to a Mortgage Loan as to which no title insurance policy or binder was
issued;
(xv) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, none of the Mortgaged Properties is a mobile
home or a manufactured housing unit that is not considered or classified
as part of the real estate under the laws of the jurisdiction in which it
is located;
(xvi) As of the Cut-off Date for the Mortgage Loans no more than
0.52% of such Mortgage Loans, by aggregate principal balance, are secured
by Mortgaged Properties located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Mortgage Loan was
not in excess of 100%;
(xviii) No selection procedure reasonably believed by the Sponsor to
be adverse to the interests of the Certificateholders or the Credit
Enhancer was utilized in selecting the Mortgage Loans;
(xix) The Sponsor has not transferred the Mortgage Loans to the
Trust with any intent to hinder, delay or defraud any of its creditors;
(xx) The Minimum Monthly Payment with respect to any Mortgage Loan
is not less than the interest accrued at the applicable Loan Rate on the
average daily Asset Balance during the interest period relating to the
date on which such Minimum Monthly Payment is due;
(xxi) Within 90 days of the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing
with respect to the Mortgage Loans, the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the Sponsor will
file UCC-1 financing statements with respect to the Mortgage Loans;
(xxii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, each Credit Line Agreement and each Mortgage
Loan is an enforceable obligation of the related Mortgagor, except as the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, the Sponsor has not received a notice of
default of any senior mortgage loan related to a Mortgaged Property that
has not been cured by a party other than the Master Servicer;
(xxiv) The definition of "prime rate" in each Credit Line Agreement
relating to a Mortgage Loan does not differ materially from the
definition in the form of Credit Line Agreement in Exhibit D;
(xxv) The weighted average remaining term to maturity of the
Mortgage Loans on a contractual basis as of the Cut-off Date for the
Mortgage Loans is approximately 272 months. On each date that the Loan
Rates have been adjusted, interest rate adjustments on the Mortgage Loans
were made in compliance with the related Mortgage and Mortgage Note and
applicable law. Over the term of each Mortgage Loan, the Loan Rate may
not exceed the related Loan Rate Cap, if any. The Loan Rate Caps range
between 12.00% and 18.00% and the weighted average Loan Rate Cap is
approximately 17.86%. The Gross Margins range between -1.375% and 6.500%
and the weighted average Gross Margin is approximately 2.030% as of the
Cut-off Date for the Mortgage Loans. The Loan Rates on such Mortgage
Loans range between 5.99% and 12.75% and the weighted average Loan Rate
is approximately 6.81%.
(xxvi) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, each Mortgaged Property consists of a single
parcel of real property with a one-to-four unit single family residence
erected thereon, or an individual condominium unit, planned unit
development unit or townhouse;
(xxvii) No more than 17.66% (by Cut-off Date Pool Balance) of the
Mortgage Loans are secured by real property improved by individual
condominium units, units in planned unit developments, townhouses or
two-to-four family residences erected thereon, and at least 82.34% (by
Cut-off Date Pool Balance) of the Mortgage Loans are secured by real
property with a detached one-family residence erected thereon;
(xxviii) The Credit Limits on the Mortgage Loans range between
$10,000 and $1,000,000 with an average of approximately $35,607.89. As of
the Cut-off Date for the Mortgage Loans, no Mortgage Loan had a principal
balance in excess of approximately $1,000,000 and the average principal
balance of the Mortgage Loans is equal to approximately $22,104.03; and
(xxix) Approximately 3.07% and 96.93% of the Mortgage Loans, by
aggregate principal balance as of the Cut-off Date for the Mortgage
Loans, are first and second liens, respectively.
With respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of the Sponsor's knowledge or as to
which the Sponsor has no knowledge, if it is discovered by the Sponsor, the
Depositor, the Master Servicer, the Credit Enhancer or a Responsible Officer
of 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 then, notwithstanding the Sponsor's lack of
knowledge with respect to the substance of such representation and warranty
being inaccurate at the time the representation or warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the respective
Mortgage Files to the Trustee pursuant to Section 2.01 and the termination of
the rights and obligations of the Master Servicer pursuant to Section 7.04 or
8.02. Upon discovery by the Sponsor, the Depositor, the Master Servicer, the
Credit Enhancer or a Responsible Officer of the Trustee of a breach of any of
the foregoing representations and warranties (other than the representation
and warranty set forth in Section 2.04(a)(iv) above), without regard to any
limitation set forth therein concerning the knowledge of the Sponsor as to the
facts stated therein, which materially and adversely affects the interests of
the Trust or the Investor Certificateholders or the Credit Enhancer in the
related Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties and the Credit Enhancer. Within 90 days of
its discovery or its receipt of notice of such breach, the Sponsor shall use
all reasonable efforts to cure such breach in all material respects or shall,
not later than the Business Day next preceding the Distribution Date in the
month following the Collection Period in which any such cure period expired
(or such later date that is acceptable to the Trustee and the Credit Enhancer
as evidenced by their written consents), either (a) accept a transfer of such
Mortgage Loan from the Trust or (b) substitute an Eligible Substitute Mortgage
Loan in the same manner and subject to the same conditions as set forth in
Section 2.02; provided, however, that the cure for any breach of a
representation and warranty relating to the characteristics of the Mortgage
Loans in the aggregate shall be a repurchase of or substitution for only the
Mortgage Loans necessary to cause such characteristics to be in compliance
with the related representation and warranty. Upon accepting such transfer and
making any required deposit into the Collection Account or substitution of an
Eligible Substitute Mortgage Loan, as the case may be, the Sponsor shall be
entitled to receive an instrument of assignment or transfer from the Trustee
to the same extent as set forth in Section 2.02 with respect to the transfer
of Mortgage Loans under that Section.
It is understood and agreed that the obligation of the Sponsor to accept
a transfer of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit in the Collection Account or to
substitute an Eligible Substitute Mortgage Loan, as the case may be, shall
constitute the sole remedy against the Sponsor respecting such breach
available to Investor Certificateholders, the Trustee on behalf of Investor
Certificateholders and the Credit Enhancer; provided, however, that the
Sponsor shall defend and indemnify the Trustee, the Credit Enhancer and the
Investor Certificateholders against all reasonable costs and expenses, and all
losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and the amount of any settlement entered into with the
consent of the Sponsor (such consent not to be unreasonably withheld), which
may be asserted against or incurred by any of them as a result of any
third-party action arising out of any breach of any such representation and
warranty. Notwithstanding the foregoing, with regard to any breach of the
representation and warranty set forth in Section 2.04(a)(iv), the sale and
assignment of the affected Mortgage Loans to the Trust shall be deemed void
and the Sponsor shall pay to the Trust the sum of (i) the amount of the
related Asset Balances, plus unpaid accrued interest on each such Asset
Balance at the applicable Loan Rate to the date of payment and (ii) the amount
of any loss suffered by Certificateholders or the Credit Enhancer with respect
to the affected Mortgage Loans.
Section 2.05. Covenants of the Depositor. The Depositor hereby covenants
that:
(a) Security Interests. Except for the transfer hereunder, the Depositor
will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Mortgage Loan,
whether now existing or hereafter created, or any interest therein; the
Depositor will notify the Trustee of the existence of any Lien on any Mortgage
Loan immediately upon discovery thereof; and the Depositor will defend the
right, title and interest of the Trust in, to and under the Mortgage Loans,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Depositor; provided, however, that nothing in
this Section 2.05(a) shall prevent or be deemed to prohibit the Depositor from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Depositor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with
respect thereto.
(b) Negative Pledge. The Depositor hereby agrees not to transfer, assign,
exchange, pledge, finance, hypothecate, grant a security interest in or
otherwise convey the Transferor Certificates except in accordance with
Sections 6.05 and 7.02.
(c) Additional Indebtedness. So long as the Investor Certificates are
outstanding the Depositor will not incur any debt other than debt that (i) is
non-recourse to the assets of the Depositor other than the mortgage loans
specifically pledged as security for such debt, or (ii) is subordinated in
right of payment to the rights of the Investor Certificateholders or (iii) is
assigned a rating by each of the Rating Agencies that is the same as the then
current rating of the Investor Certificates.
(d) Downgrading. The Depositor will not engage in any activity which
would result in a downgrading of the Investor Certificates.
(e) Amendment to Certificate of Incorporation. The Depositor will not
amend its Certificate of Incorporation without prior written notice to the
Rating Agencies and the Credit Enhancer.
(f) Principal Place of Business. The Depositor's principal place of
business is in California and it will not change its principal place of
business without prior written notice to the Rating Agencies and the Credit
Enhancer.
Section 2.06. Transfers of Mortgage Loans at Election of Transferor.
Subject to the conditions set forth below, the Transferor may, but shall not
be obligated to, require the transfer of Mortgage Loans from the Trust to the
Transferor as of the close of business on a Distribution Date (the "Transfer
Date"). On the fifth Business Day (the "Transfer Notice Date") prior to the
Transfer Date designated in such notice, the Transferor shall give the
Trustee, the Master Servicer and the Credit Enhancer a notice of the proposed
transfer that contains a list of the Mortgage Loans to be transferred. Such
transfers of Mortgage Loans shall be permitted upon satisfaction of the
following conditions:
(i) No Rapid Amortization Event has occurred;
(ii) On the Transfer Date the Transferor Principal Balance (after
giving effect to the removal from the Trust of the Mortgage Loans
proposed to be transferred) exceeds the Minimum Transferor Interest;
(iii) The transfer of any Mortgage Loans on any Transfer Date during
the Managed Amortization Period shall not, in the reasonable belief of
the Transferor, cause a Rapid Amortization Event to occur or an event
which with notice or lapse of time or both would constitute a Rapid
Amortization Event;
(iv) On or before the Transfer Date, the Transferor shall have
delivered to the Trustee a revised Mortgage Loan Schedule, reflecting the
proposed transfer and the Transfer Date, and the Master Servicer shall
have marked the Electronic Ledger to show that the Mortgages Loans
transferred to the Transferor are no longer owned by the Trust;
(v) The Transferor shall represent and warrant that no selection
procedures reasonably believed by the Transferor to be adverse to the
interests of the Investor Certificateholders or the Credit Enhancer were
utilized in selecting the Mortgage Loans to be removed from the Trust;
(vi) In connection with the first transfer of Mortgage Loans
pursuant to this Section, each Rating Agency and the Credit Enhancer
shall have received on or prior to the related Transfer Notice Date
notice of such proposed transfer of Mortgage Loans and, prior to the
Transfer Date, each Rating Agency shall have notified the Trustee and the
Credit Enhancer in writing that such transfer of Mortgage Loans would not
result in a reduction or withdrawal of its then current rating of the
Investor Certificates without regard to the Policy;
(vii) The Transferor shall have delivered to the Trustee and the
Credit Enhancer an Officer's Certificate certifying that the items set
forth in subparagraphs (i) through (vi), inclusive, have been performed
or are true and correct, as the case may be. The Trustee may conclusively
rely on such Officer's Certificate, shall have no duty to make inquiries
with regard to the matters set forth therein and shall incur no liability
in so relying; and
(viii) The Transferor shall have satisfied all requirements with
respect to such retransfer which may be imposed by the U.S. Department of
Labor after the Closing Date and prior to the date of such retransfer in
order to ensure that any administrative exemption from the prohibited
transaction rules of ERISA and the related excise tax provisions of
Section 4975 of the Code granted by such Department to any underwriter of
the Certificates shall continue to apply to the purchase, holding and
resale of Certificates by Plans and to the servicing, management or
operation of the Trust; provided, however, that the Transferor shall not
be required to satisfy such requirements if it obtains an Opinion of
Counsel to the effect that such retransfer would not result in a
non-exempt prohibited transaction.
Upon receiving the requisite information from the Transferor, the Master
Servicer shall perform in a timely manner those acts required of it, as
specified above. Upon satisfaction of the above conditions, on the Transfer
Date the Trustee shall deliver, or cause to be delivered, to the Transferor
the Mortgage File for each Mortgage Loan being so transferred, and the Trustee
shall execute and deliver to the Transferor such other documents prepared by
the Transferor as shall be reasonably necessary to transfer such Mortgage
Loans to the Transferor. Any such transfer of the Trust's right, title and
interest in and to Mortgage Loans shall be without recourse, representation or
warranty by or of the Trustee or the Trust to the Transferor.
Section 2.07. Execution and Authentication of Certificates. The Trustee,
on behalf of the Trust, has caused to be executed, authenticated and delivered
to or upon the order of the Depositor, in exchange for the Trust, concurrently
with the sale, assignment and conveyance to the Trustee of the Trust, Investor
Certificates in authorized denominations and the Transferor Certificates,
together evidencing the ownership of the entire Trust.
Section 2.08. Tax Treatment. It is the intention of the Depositor, the
Transferor and the Investor Certificateholders that the Investor Certificates
will be indebtedness of the Transferor for federal, state and local income and
franchise tax purposes and for purposes of any other tax imposed on or
measured by income. The Transferor, the Depositor, the Trustee and each
Investor Certificateholder (or Certificate Owner) by acceptance of its
Investor Certificate (or, in the case of a Certificate Owner, by virtue of
such Certificate Owner's acquisition of a beneficial interest therein) agrees
to treat the Investor Certificates (or beneficial interest therein), for
purposes of federal, state and local income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness of the Transferor
secured by the assets of the Trust and to report the transactions contemplated
by this Agreement on all applicable tax returns in a manner consistent with
such treatment. Each Investor Certificateholder agrees that it will cause any
Certificate Owner acquiring an interest in an Investor Certificate through it
to comply with this Agreement as to treatment of the Investor Certificates as
indebtedness for federal, state and local income and franchise tax purposes
and for purposes of any other tax imposed on or measured by income. The
Trustee will prepare and file all tax reports required hereunder.
Section 2.09. Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Trustee on behalf of the
Certificateholders and the Credit Enhancer as follows:
(i) This Agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor
to the Trustee of each Mortgage Loan, the Depositor was the sole
beneficial owner of each Mortgage Loan (insofar as such title was
conveyed to it by the Sponsor) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title and interest in the Mortgage Loans to the Trustee; and
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee with any intent to hinder, delay or defraud any of its creditors.
ARTICLE III
Administration and Servicing
of Mortgage Loans
Section 3.01. The Master Servicer. (a) The Master Servicer shall service
and administer the Mortgage Loans in a manner consistent with the terms of
this Agreement and with general industry practice and shall have full power
and authority, acting alone or through a subservicer, to do any and all things
in connection with such servicing and administration which it may deem
necessary or desirable, it being understood, however, that the Master Servicer
shall at all times remain responsible to the Trustee, the Certificateholders
and the Credit Enhancer for the performance of its duties and obligations
hereunder in accordance with the terms hereof. Any amounts received by any
subservicer in respect of a Mortgage Loan shall be deemed to have been
received by the Master Servicer whether or not actually received by it.
Without limiting the generality of the foregoing, the Master Servicer shall
continue, and is hereby authorized and empowered by the Trustee, to execute
and deliver, on behalf of itself, the Certificateholders and the Trustee, 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. The Trustee shall, upon the written request of a Servicing
Officer, furnish the Master Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Master Servicer to carry out
its servicing and administrative duties hereunder. The Master Servicer in such
capacity may also consent to the placing of a lien senior to that of any
Mortgage on the related Mortgaged Property, provided that (i) the new senior
lien secures a mortgage loan that refinances an existing first mortgage loan
and (ii) the Loan-to-Value Ratio of the new mortgage loan (without taking into
account any closing costs that may be financed by such new mortgage loan) is
equal to or less than the Loan-to-Value Ratio of the first mortgage loan to be
replaced measured either (A) as of the Cut-off Date or (B) as of the date of
the refinancing referenced in clause (i); provided, however, that the
aggregate Asset Balance of such Mortgage Loans with respect to which the
senior lien may be modified in accordance with clause (ii)(A) shall not exceed
10% of the Cut-off Date Pool Balance and clause (ii)(B) shall not exceed 40%
of the Cut-off Date Pool Balance; and provided, further, that the aggregate
Asset Balance of all such Mortgage Loans with respect to which the senior lien
may be so modified shall not exceed 50% of the Cut-off Date Pool Balance (such
50% herein referred to as the "Increased Senior Lien Limitation").
The Master Servicer may also, without prior approval from the Rating
Agencies or the Credit Enhancer, increase the Credit Limits on Mortgage Loans
provided that (i) new appraisals are obtained and the Combined Loan-to-Value
Ratios of the Mortgage Loans after giving effect to such increase are less
than or equal to the Combined Loan-to-Value Ratios of the Mortgage Loans as of
the Cut-off Date and (ii) such increases are consistent with the Master
Servicer's underwriting policies. In addition, the Master Servicer may (i)
increase the Credit Limits on Mortgage Loans having aggregate Asset Balances
of up to 2.5% of the Cut-off Date Pool Balance, provided that (x) the increase
in the Credit Limit of a Mortgage Loan does not cause the Combined
Loan-to-Value Ratio of such Mortgage Loan to exceed 90%, (y) the increase in
the Credit Limit of a Mortgage Loan does not cause the Combined Loan-to-Value
Ratio of such Mortgage Loan to increase by more than 25% (for example, a
Combined Loan-to-Value Ratio of 50% can be increased to 75%, a Combined
Loan-to-Value Ratio of 60% can be increased to 85%, and so forth) and (z) the
increase is consistent with the Master Servicer's underwriting policies and
(ii) increase the Credit Limits on the Mortgage Loans having aggregate Asset
Balances of up to an additional 2.5% of the Cut-off Date Pool Balance,
provided that (x) the increase in the Credit Limit of a Mortgage Loan does not
cause the Combined Loan-to-Value Ratio of such Mortgage Loan to exceed 100%,
(y) the increase in the Credit Limit of a Mortgage Loan does not cause the
Combined Loan-to-Value Ratio of such Mortgage Loan to increase by more than
25% (for example, a Combined Loan-to-Value Ratio of 50% can be increased to
75%, a Combined Loan-to-Value Ratio of 60% can be increased to 85%, and so
forth) and (z) the increase is consistent with the Master Servicer's
underwriting policies.
Furthermore, the Master Servicer may, without prior approval from the
Rating Agencies and the Credit Enhancer solicit Mortgagors for a reduction in
Loan Rates; provided that the Master Servicer can only reduce such Loan Rates
on up to 10% of the Mortgage Loans by Cut-off Date Pool Balance. Any such
solicitations shall not result in a reduction in the weighted average Gross
Margin of the Mortgage Loans in the pool by more than 25 basis points taking
into account any such prior reductions.
In addition, the Master Servicer may agree to changes in the terms of a
Mortgage Loan at the request of the Mortgagor provided that such changes (i)
do not materially and adversely affect the interests of Certificateholders or
the Credit Enhancer and (ii) are consistent with prudent and customary
business practice as evidenced by a certificate signed by a Servicing Officer
delivered to the Trustee and the Credit Enhancer.
In addition to the foregoing, the Master Servicer may solicit Mortgagors
to change any other terms of the related Mortgage Loans, provided that such
changes (i) do not materially and adversely affect the interest of
Certificateholders or the Credit Enhancer and (ii) are consistent with prudent
and customary business practice as evidenced by a certificate signed by a
Servicing Officer delivered to the Trustee and the Credit Enhancer. Nothing
herein shall limit the right of the Master Servicer to solicit Mortgagors with
respect to new loans (including mortgage loans) that are not Mortgage Loans.
The relationship of the Master Servicer (and of any successor to the
Master Servicer as master servicer under this Agreement) to the Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) In the event that the rights, duties and obligations of the Master
Servicer are terminated hereunder, any successor to the Master Servicer in its
sole discretion may, to the extent permitted by applicable law, terminate the
existing subservicer arrangements with any subservicer or assume the
terminated Master Servicer's rights under such subservicing arrangements which
termination or assumption will not violate the terms of such arrangements.
Section 3.02. Collection of Certain Mortgage Loan Payments. (a) The
Master Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans, and shall, to the
extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to mortgage loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or any
assumption fees or other fees which may be collected in the ordinary course of
servicing such Mortgage Loan and (ii) arrange with a Mortgagor a schedule for
the payment of interest due and unpaid; provided that such arrangement is
consistent with the Master Servicer's policies with respect to the mortgage
loans it owns or services; provided, further, that notwithstanding such
arrangement such Mortgage Loans will be included in the information regarding
delinquent Mortgage Loans set forth in the Servicing Certificate and monthly
statement to Certificateholders pursuant to Section 5.03.
(b) The Master Servicer shall establish and maintain a trust account (the
"Collection Account") titled "The First National Bank of Chicago, as Trustee,
in trust for the registered holders of Revolving Home Equity Loan Asset Backed
Certificates, Series 1998-D and Ambac Assurance Corporation." The Collection
Account shall be an Eligible Account. The Master Servicer shall (i) on the
Business Day immediately preceding each of the first three Distribution Dates,
deposit in the Collection Account any shortfall in the amount required to pay
the Investor Certificate Interest on such Distribution Dates resulting solely
from the failure of certain Mortgage Loans to be fully indexed and (ii) on the
Business Day immediately preceding the first Distribution Date, deposit in the
Collection Account any amounts representing payments on, and any collections
in respect of, the Mortgage Loans received after the Cut-off Date and prior to
the Closing Date (exclusive of payments in respect of accrued interest due on
or prior to the Cut-off Date), and thereafter the Master Servicer, or the
Sponsor, as the case may be, shall deposit within two Business Days following
receipt thereof the following payments and collections received or made by it
(without duplication):
(i) all collections on and in respect of the Mortgage Loans;
(ii) the amounts, if any, deposited to the Collection Account
pursuant to Section 4.05;
(iii) Net Liquidation Proceeds net of any related Foreclosure
Profit;
(iv) Insurance Proceeds (including, for this purpose, any amount
required to be credited by the Master Servicer pursuant to the last
sentence of Section 3.04 and excluding the portion thereof, if any, that
has been applied to the restoration or repair of the related Mortgaged
Property or released to the related Mortgagor in accordance with the
normal servicing procedures of the Master Servicer); and
(v) any amounts required to be deposited therein pursuant to Section
10.01;
provided, however, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Mortgage Loans, the Servicing Fee for such Collection Period and the
amount of any unreimbursed optional advance made by the Master Servicer
pursuant to Section 4.05; and provided, further, that, notwithstanding the
foregoing, so long as Countrywide is the Master Servicer and (x) the Master
Servicer's long-term senior unsecured debt obligations are rated at least
"Baa2" by Moody's and "BBB" by Standard & Poor's and (y) the Credit Enhancer's
claims-paying ability is rated "Aaa" by Moody's and "AAA" by Standard &
Poor's, the Master Servicer need not make daily deposits in the Collection
Account for any Collection Period, but instead may make a single deposit in
the Collection Account of amounts to be remitted by it for such Collection
Period in immediately available funds on the Business Day prior to the related
Distribution Date. The foregoing requirements respecting deposits to the
Collection Account are exclusive, it being understood that, without limiting
the generality of the foregoing, the Master Servicer need not deposit in the
Collection Account amounts representing Foreclosure Profits, fees (including
annual fees) or late charge penalties payable by Mortgagors, or amounts
received by the Master Servicer for the accounts of Mortgagors for application
towards the payment of taxes, insurance premiums, assessments, excess pay off
amounts and similar items. The Master Servicer shall remit all Foreclosure
Profits to the Sponsor.
The Trustee shall hold amounts deposited in the Collection Account as
trustee for the Certificateholders and for the Credit Enhancer. In addition,
the Master Servicer shall notify the Trustee and the Credit Enhancer in
writing on each Determination Date of the amount of payments and collections
in the Collection Account allocable to Interest Collections and Principal
Collections for the related Distribution Date. Following such notification,
the Master Servicer shall be entitled to withdraw from the Collection Account
and retain any amounts that constitute income and gain realized from the
investment of such payments and collections.
Amounts on deposit in the Collection Account will, at the direction of
the Master Servicer, be invested in Eligible Investments maturing no later
than the day before the next Distribution Date. All income and gain realized
from any investment in Eligible Investments of funds in the Collection Account
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal from time to time. The amount of any losses incurred in respect of
the principal amount of any such investments shall be deposited in the
Collection Account by the Master Servicer out of its own funds immediately as
realized.
Section 3.03. Withdrawals from the Collection Account. From time to time,
withdrawals may be made from the Collection Account by the Master Servicer for
the following purposes:
(i) To the Master Servicer as payment for its Servicing Fee pursuant
to Section 3.08;
(ii) To pay to the Master Servicer amounts on deposit in the
Collection Account that are not to be included in the distributions and
payments pursuant to Section 5.01 to the extent provided by the second to
the last and the last paragraph of Section 3.02(b); and
(iii) To make or to permit the Paying Agent to make distributions
and payments pursuant to Section 5.01;
provided, however, that, if the Master Servicer makes monthly deposits in the
Collection Account pursuant to the second proviso of Section 3.02(b), in lieu
of making the foregoing withdrawals (except in the case of clause (iii)), the
Master Servicer may make a net deposit in the Collection Account pursuant to
Section 3.02(b).
If the Master Servicer deposits in the Collection Account any amount not
required to be deposited therein or any amount in respect of payments by
Mortgagors made by checks subsequently returned for insufficient funds or
other reason for non-payment it may at any time withdraw such amount from the
Collection Account, and any such amounts shall not be included in the amounts
to be deposited in the Collection Account pursuant to Section 3.02(b), any
provision herein to the contrary notwithstanding.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Master Servicer shall cause to be maintained for each Mortgage
Loan hazard insurance naming the Master Servicer or the related subservicer as
loss payee thereunder providing extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan from time to time or (ii) the
combined principal balance owing on such Mortgage Loan and any mortgage loan
senior to such Mortgage Loan from time to time. The Master Servicer shall also
maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, hazard insurance with extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value from time to time
of the improvements which are a part of such property or (ii) the combined
principal balance owing on such Mortgage Loan and any mortgage loan senior to
such Mortgage Loan at the time of such foreclosure or deed in lieu of
foreclosure plus accrued interest and the good-faith estimate of the Master
Servicer of related Liquidation Expenses to be incurred in connection
therewith. Amounts collected by the Master Servicer under any such policies
shall be deposited in the Collection Account to the extent called for by
Section 3.02. In cases in which any Mortgaged Property is located in a
federally designated flood area, the hazard insurance to be maintained for the
related Mortgage Loan shall include flood insurance. All such flood insurance
shall be in such amounts as are required under applicable guidelines of the
Federal Flood Emergency Act. The Master Servicer shall be under no obligation
to require that any Mortgagor maintain earthquake or other additional
insurance and shall be under no obligation itself to maintain any such
additional insurance on property acquired in respect of a Mortgage Loan, 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 Master
Servicer shall obtain and maintain a blanket policy consistent with prudent
industry standards insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry standards, it shall conclusively
be deemed to have satisfied its obligations as set forth in the first sentence
of this Section 3.04, it being understood and agreed that such policy may
contain a deductible clause on terms substantially equivalent to those
commercially available and maintained by comparable servicers. If such policy
contains a deductible clause, the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section, and there shall have
been a loss which would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause.
Section 3.05. Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall exercise its right to accelerate the
maturity of such Mortgage Loan consistent with the then current practice of
the Master Servicer and without regard to the inclusion of such Mortgage Loan
in the Trust. If it elects not to enforce its right to accelerate or if it is
prevented from doing so by applicable law, the Master Servicer (so long as
such action conforms with the underwriting standards generally acceptable in
the industry at the time for new origination) is authorized to take or enter
into an assumption and modification agreement from or with the Person to whom
such Mortgaged Property has been or is about to be conveyed, pursuant to which
such Person becomes liable under the Credit Line Agreement and, to the extent
permitted by applicable law, the Mortgagor remains liable thereon. The Master
Servicer shall notify the Trustee that any assumption and modification
agreement has been completed by delivering to the Trustee an Officer's
Certificate certifying that such agreement is in compliance with this Section
3.05 and by forwarding the original copy of such assumption and modification
agreement to the Trustee. Any such assumption and modification agreement
shall, for all purposes, be considered a part of the related Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. No change in the terms of the related Credit Line Agreement may be
made by the Master Servicer in connection with any such assumption to the
extent that such change would not be permitted to be made in respect of the
original Credit Line Agreement pursuant to the fourth paragraph of Section
3.01(a). Any fee collected by the Master Servicer for entering into any such
agreement will be retained by the Master Servicer as additional servicing
compensation.
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans. The Master Servicer shall foreclose upon or otherwise
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default when, in the opinion of
the Master Servicer based upon the practices and procedures referred to in the
following sentence, no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 3.02; provided that if the Master
Servicer has actual knowledge or reasonably believes that any Mortgaged
Property is affected by hazardous or toxic wastes or substances and that the
acquisition of such Mortgaged Property would not be commercially reasonable,
then the Master Servicer will not cause the Trust to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. In connection with
such foreclosure or other conversion, the Master Servicer shall follow such
practices (including, in the case of any default on a related senior mortgage
loan, the advancing of funds to correct such default) and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities. The foregoing is subject to the proviso
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the correction of any default on a
related senior mortgage loan or restoration of any property unless it shall
determine that such expenditure will increase Net Liquidation Proceeds.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders.
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust any Mortgage Loan which is 91 days
or more delinquent at a price equal to the purchase price described below. The
price for any Mortgage Loan purchased hereunder (which shall be an amount
equal to 100% of the Asset Balance of such Mortgage Loan plus accrued interest
thereon at the applicable Loan Rate from the date through which interest was
last paid by the related Mortgagor to the first day of the month in which such
amount is to be distributed to Certificateholders) shall be deposited in the
Collection Account and the Trustee, upon receipt of a certificate from the
Master Servicer in the form of Exhibit G hereto, shall release or cause to be
released to the Master Servicer the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment prepared by the Master
Servicer, 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 Master Servicer 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 Master Servicer shall thereupon own such Mortgage Loan, and all security
and documents, free of any further obligation to the Trustee, the Credit
Enhancer or the Certificateholders with respect thereto.
Section 3.07. Trustee to Cooperate. On or before each Distribution Date,
the Master Servicer will notify the Trustee of the payment in full of the
Asset Balance of any Mortgage Loan during the preceding Collection Period,
which notification shall be by a certification (which certification shall
include a statement to the effect that all amounts received in connection with
such payment which are required to be deposited in the Collection Account
pursuant to Section 3.02 have been so deposited or credited) of a Servicing
Officer. Upon any such payment in full, the Master Servicer is authorized to
execute, pursuant to the authorization contained in Section 3.01, if the
assignments of Mortgage have been recorded as required hereunder, an
instrument of satisfaction regarding the related Mortgage, which instrument of
satisfaction shall be recorded by the Master Servicer if required by
applicable law and be delivered to the Person entitled thereto. It is
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. From time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, or in connection with the
payment in full of the Asset Balance of any Mortgage Loan, the Trustee shall,
upon request of the Master Servicer and delivery to the Trustee of a Request
for Release substantially in the form attached hereto as Exhibit G signed by a
Servicing Officer, release the related Mortgage File to the Master Servicer
and the Trustee shall execute such documents, in the forms provided by the
Master Servicer, as shall be necessary to the prosecution of any such
proceedings or the taking of other servicing actions. Such trust receipt shall
obligate the Master Servicer to return the Mortgage File to the Trustee when
the need therefor by the Master Servicer no longer exists, unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of a certificate of a
Servicing Officer similar to that hereinabove specified, the trust receipt
shall be released by the Trustee to the Master Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the assignments of
Mortgage in accordance with the provisions hereof, the Trustee shall, if so
requested in writing by the Master Servicer, execute an appropriate assignment
in the form provided to the Trustee by the Master Servicer to assign such
Mortgage Loan for the purpose of collection to the Master Servicer or to the
related subservicer (any such assignment shall unambiguously indicate that the
assignment is for the purpose of collection only), and, upon such assignment,
the Master Servicer will thereupon bring all required actions in its own name
and otherwise enforce the terms of the Mortgage Loan and deposit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments
due under any such Mortgage Loan are paid by the Mortgagor and any other
defaults are cured, then the Master Servicer shall promptly reassign such
Mortgage Loan to the Trustee and return the related Mortgage File to the place
where it was being maintained.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Master Servicer. The Master Servicer shall be entitled to receive the
Servicing Fee pursuant to Section 3.03 as compensation for its services in
connection with servicing the Mortgage Loans. Moreover, additional servicing
compensation in the form of late payment charges or other receipts not
required to be deposited in the Collection Account (other than Foreclosure
Profits) shall be retained by the Master Servicer. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its
activities hereunder (including payment of all other fees and expenses not
expressly stated hereunder to be for the account of the Certificateholders)
and shall not be entitled to reimbursement therefor except as specifically
provided herein. Liquidation Expenses are reimbursable to the Master Servicer
first, from related Liquidation Proceeds and second, from the Collection
Account pursuant to Section 5.01(a)(ix).
Section 3.09. Annual Statement as to Compliance. (a) The Master Servicer
will deliver to the Trustee, the Credit Enhancer and the Rating Agencies, on
or before May 31st of each year, beginning May 31, 1999, an Officer's
Certificate stating that (i) a review of the activities of the Master Servicer
during the preceding fiscal year (or such shorter period as is applicable in
the case of the first report) and of its performance 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 of its material obligations under this Agreement throughout such fiscal
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.
(b) The Master Servicer shall deliver to the Trustee, the Credit Enhancer
and each of the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice by means of an Officer's Certificate of any event which with the giving
of notice or the lapse of time or both, would become an Event of Servicing
Termination.
Section 3.10. Annual Servicing Report. On or before May 31 of each year,
beginning May 31, 1999, the Master Servicer, at its expense, shall cause a
firm of nationally recognized independent public accountants (who may also
render other services to the Master Servicer) to furnish a report to the
Trustee, the Credit Enhancer and each Rating Agency to the effect that such
firm has examined certain documents and records relating to the servicing of
mortgage loans during the most recent fiscal year then ended under pooling and
servicing agreements (substantially similar to this Agreement, including this
Agreement) that such examination, was conducted substantially in compliance
with the audit guide for audits of non-supervised mortgagees approved by the
Department of Housing and Urban Development for use by independent public
accountants (to the extent that the procedures in such audit guide are
applicable to the servicing obligations set forth in such agreements) and that
such examination has disclosed no items of noncompliance with the provisions
of this Agreement which, in the opinion of such firm, are material, except for
such items of noncompliance as shall be set forth in such report.
Section 3.11. Access to Certain Documentation and Information Regarding
the Mortgage Loans. (a) The Master Servicer shall provide to the Trustee, the
Credit Enhancer, any Investor Certificateholders that are federally insured
savings and loan associations, the Office of Thrift Supervision, successor to
the Federal Home Loan Bank Board, the FDIC and the supervisory agents and
examiners of the Office of Thrift Supervision access to the documentation
regarding the Mortgage Loans required by applicable regulations of the Office
of Thrift Supervision and the FDIC (acting as operator of the SAIF or the
BIF), such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Master
Servicer. Nothing in this Section 3.11 shall derogate from 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 3.11 as a result of such obligation
shall not constitute a breach of this Section 3.11.
(b) The Master Servicer shall supply information in such form as the
Trustee shall reasonably request to the Trustee and the Paying Agent, on or
before the start of the Determination Date preceding the related Distribution
Date, as is required in the Trustee's reasonable judgment to enable the Paying
Agent or the Trustee, as the case may be, to make required distributions and
to furnish the required reports to Certificateholders and to make any claim
under the Policy.
Section 3.12. Maintenance of Certain Servicing Insurance Policies. The
Master Servicer shall during the term of its service as master servicer
maintain in force (i) a policy or policies of insurance covering errors and
omissions in the performance of its obligations as master servicer hereunder
and (ii) a fidelity bond in respect of its officers, employees or agents. Each
such policy or policies and bond together shall comply with the requirements
from time to time of the Federal National Mortgage Association for persons
performing servicing for mortgage loans purchased by such Association.
Section 3.13. Reports to the Securities and Exchange Commission. The
Trustee shall, on behalf of the Trust, cause to be filed with the Securities
and Exchange Commission any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission thereunder. Upon the
request of the Trustee, each of the Sponsor, the Master Servicer, the
Depositor and the Transferor shall cooperate with the Trustee in the
preparation of any such report and shall provide to the Trustee in a timely
manner all such information or documentation as the Trustee may reasonably
request in connection with the performance of its duties and obligations under
this Section.
Section 3.14. Tax Returns. In accordance with Section 2.08 hereof, the
Trustee shall prepare and file any federal, state or local income and
franchise tax return for the Trust as well as any other applicable return and
apply for a taxpayer identification number on behalf of the Trust. The
Transferor shall treat the Mortgage Loans as its property for all federal,
state or local tax purposes and shall report all income earned thereon
(including amounts payable as fees to the Master Servicer) as its income for
income tax purposes. In the event the Trust shall be required pursuant to an
audit or administrative proceeding or change in applicable regulations to file
federal, state or local tax returns, the Trustee shall prepare and file or
shall cause to be prepared and filed any tax returns required to be filed by
the Trust; the Trustee shall promptly sign such returns and deliver such
returns after signature to the Master Servicer and such returns shall be filed
by the Master Servicer. The Trustee shall also prepare or shall cause to be
prepared all tax information required by law to be distributed to Investor
Certificateholders. In no event shall the Trustee or the Master Servicer be
liable for any liabilities, costs or expenses of the Trust, the Investor
Certificateholders, the Transferor Certificateholders or the Certificate
Owners arising under any tax law, including without limitation federal, state
or local income and franchise or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto or arising
from a failure to comply therewith).
Section 3.15. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
The Master Servicer shall prepare and deliver all federal and state
information reports when and as required by all applicable state and federal
income tax laws. In particular, with respect to the requirement under Section
6050J of the Code to the effect that the Master Servicer shall make reports of
foreclosures and abandonments of any mortgaged property for each year
beginning in 1999, the Master Servicer shall file reports relating to each
instance occurring during the previous calendar year in which the Master
Servicer (i) on behalf of the Trustee acquires an interest in any Mortgaged
Property through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan, or (ii) knows or has reason to know that any
Mortgaged Property has been abandoned. The reports from the Master Servicer
shall be in form and substance sufficient to meet the reporting requirements
imposed by Section 6050J.
ARTICLE IV
Servicing Certificate
Section 4.01. Servicing Certificate. Not later than each Determination
Date, the Master Servicer shall deliver (a) to the Trustee, the Statement to
Certificateholders required to be prepared pursuant to Section 5.03 and (b) to
the Trustee, the Sponsor, the Depositor, the Paying Agent, the Credit Enhancer
and each Rating Agency a Servicing Certificate (in written form or the form of
computer readable media or such other form as may be agreed to by the Trustee
and the Master Servicer), together with an Officer's Certificate to the effect
that such Servicing Certificate is true and correct in all material respects,
stating the related Collection Period, Distribution Date, the series number of
the Certificates, the date of this Agreement, and:
(i) the aggregate amount of collections received on the Mortgage
Loans on or prior to the Determination Date in respect of such Collection
Period;
(ii) the aggregate amount of (a) Interest Collections and (b)
Principal Collections for such Collection Period;
(iii) the Investor Floating Allocation Percentage and the Investor
Fixed Allocation Percentage for such Collection Period;
(iv) the Investor Interest Collections and Investor Principal
Collections for such Collection Period;
(v) the Transferor Interest Collections and Transferor Principal
Collections for such Collection Period;
(vi) Investor Certificate Interest and the Investor Certificate Rate
for the related Interest Period;
(vii) the amount, if any, of such Investor Certificate Interest that
is not payable on account of insufficient Investor Interest Collections;
(viii) the portion of the Unpaid Investor Certificate Interest
Shortfall, if any, the amount of interest on such shortfall at the
Certificate Rate applicable from time to time (separately stated) to be
distributed on such Distribution Date;
(ix) the Unpaid Investor Certificate Interest Shortfall, if any, to
remain after the distribution on such Distribution Date;
(x) the Accelerated Principal Distribution Amount and the portion
thereof that will be distributed pursuant to Section 5.01(a)(vii);
(xi) the Scheduled Principal Collections Distribution Amount,
separately stating the components thereof;
(xii) the amount of any Transfer Deposit Amount paid by the Sponsor
or the Depositor pursuant to Section 2.02 or 2.04;
(xiii) any accrued and unpaid Servicing Fees for previous Collection
Periods and the Servicing Fee for such Collection Period;
(xiv) the Investor Loss Amount for such Collection Period;
(xv) the aggregate amount, if any, of Investor Loss Reduction
Amounts for previous Distribution Dates that have not been previously
reimbursed to Investor Certificateholders pursuant to Section 5.01(a)(v);
(xvi) the aggregate Asset Balance of the Mortgage Loans as of the
end of the preceding Collection Period and as of the end of the second
preceding Collection Period;
(xvii) the Pool Balance as of the end of the preceding Collection
Period and as of the end of the second preceding Collection Period;
(xviii) the Invested Amount as of the end of the preceding
Collection Period;
(xix) the Investor Certificate Principal Balance and Pool Factor
after giving effect to the distribution on such Distribution Date and to
any reduction on account of the Investor Loss Amount;
(xx) the Transferor Principal Balance and the Available Transferor
Subordinated Amount after giving effect to the distribution on such
Distribution Date;
(xxi) the aggregate amount of Additional Balances created during the
previous Collection Period;
(xxii) the number and aggregate Asset Balances of Mortgage Loans (x)
as to which the Minimum Monthly Payment is delinquent for 30-59 days,
60-89 days and 90 or more days, respectively and (y) that have become
REO, in each case as of the end of the preceding Collection Period;
(xxiii) whether a Rapid Amortization Event has occurred since the
prior Determination Date, specifying each such Rapid Amortization Event
if one has occurred;
(xxiv) whether an Event of Servicing Termination has occurred since
the prior Determination Date, specifying each such Event of Servicing
Termination if one has occurred;
(xxv) the amount to be distributed to the Credit Enhancer pursuant
to Section 5.01(a)(vi) and Section 5.01(a)(viii), stated separately;
(xxvi) the Guaranteed Principal Distribution Amount for such
Distribution Date;
(xxvii) the Credit Enhancement Draw Amount, if any, for such
Distribution Date;
(xxviii) the amount to be distributed to the Transferor pursuant to
Section 5.01(a)(x);
(xxix) the amount to be paid to the Master Servicer pursuant to
Section 5.01(a)(ix);
(xxx) the Maximum Rate for the related Collection Period and the
Weighted Average Net Loan Rate;
(xxxi) the expected amount of any optional advances pursuant to
Section 4.05 hereof by the Master Servicer included in the distribution
on such Distribution Date and the aggregate expected amount of optional
advances pursuant to Section 4.05 hereof by the Master Servicer
outstanding as of the close of business on such Distribution Date;
(xxxii) the Overcollateralization Amount after giving effect to the
distribution to be made on such Distribution Date; and
(xxxiii) the number and principal balances of any Mortgage Loans
transferred to the Transferor pursuant to Section 2.06;
(xxxiv) the aggregate of all Liquidation Loss Amounts since the
Cut-off Date and whether a Cumulative Loss Test Violation has occurred
since the prior Determination Date; and
(xxxv) the Rolling Six Month Delinquency Rate for such Distribution
Date.
The Trustee shall conclusively rely upon the information contained in a
Servicing Certificate for purposes of making distributions pursuant to Section
5.01, shall have no duty to inquire into such information and shall have no
liability in so relying. The format and content of the Servicing Certificate
may be modified by the mutual agreement of the Master Servicer, the Trustee
and the Credit Enhancer. The Master Servicer shall give notice of any such
change to the Rating Agencies.
Section 4.02. Claims upon the Policy; Policy Payments Account.
(a) If, by the close of business on the third Business Day prior to a
Distribution Date, the sum of the funds then on deposit in the Collection
Account for the related Collection Period which are payable to the Investor
Certificateholders pursuant to Sections 5.01(a) (excluding the amount, if any,
payable pursuant to clause (vii) thereof) and (b) (after giving effect to the
distribution of the Trustee Fee and the Premium) and the amount, if any,
deposited into the Collection Account pursuant to Section 4.05 are
insufficient to pay the Guaranteed Distribution on such Distribution Date
(after application of Subordinated Transferor Collections), then the Trustee
shall give notice to the Credit Enhancer by telephone or telecopy of the
amount equal to the Credit Enhancement Draw Amount. Such notice of such sum
shall be confirmed in writing in the form of Notice of Nonpayment and Demand
for Payment of Insured Amounts set forth as Exhibit A to the Policy, to the
Credit Enhancer at or before 10:00 a.m., New York City time, on the second
Business Day prior to such Distribution Date. Following receipt by the Credit
Enhancer of such notice in such form, the Credit Enhancer will pay any amount
payable under the Policy as set forth in such form on the later to occur of
(i) 12:00 noon, New York City time, on the second Business Day following such
receipt and (ii) 12:00 noon, New York City time, on the Distribution Date to
which such deficiency relates.
(b) The Trustee shall establish a separate special purpose trust account,
which account shall be an Eligible Account, for the benefit of Holders of the
Investor Certificates and the Credit Enhancer referred to herein as the
"Policy Payments Account" over which the Trustee shall have exclusive control
and sole right of withdrawal. The Trustee shall deposit any amount paid under
the Policy in the Policy Payments Account and distribute such amount only for
purposes of payment to Holders of the Investor Certificates of the Guaranteed
Distribution for which a claim was made and such amount may not be applied to
satisfy any costs, expenses or liabilities of the Master Servicer, the Trustee
or the Trust. Amounts paid under the Policy shall be transferred to the
Collection Account in accordance with the next succeeding paragraph and
disbursed by the Trustee to Holders of Investor Certificates in accordance
with Section 5.01. It shall not be necessary for such payments to be made by
checks or wire transfers separate from the checks or wire transfers used to
pay the Guaranteed Distribution with other funds available to make such
payment. However, the amount of any payment of principal of or interest on the
Investor Certificates to be paid from funds transferred from the Policy
Payments Account shall be noted as provided in paragraph (c) below in the
Certificate Register and in the statement to be furnished to Holders of the
Investor Certificates pursuant to Section 5.03. Funds held in the Policy
Payments Account shall not be invested.
On any Distribution Date with respect to which a claim has been made
under the Policy, the amount of any funds received by the Trustee as a result
of any claim under the Policy, to the extent required to make the Guaranteed
Distribution on such Distribution Date, shall be withdrawn from the Policy
Payments Account and deposited in the Collection Account and applied by the
Trustee, together with the other funds to be withdrawn from the Collection
Account pursuant to Section 5.01 directly to the payment in full of the
Guaranteed Distribution due on the Investor Certificates. Any funds received
by the Trustee shall be used solely for payment to the Holders of Investor
Certificates and may not be applied to satisfy any costs, expenses or
liabilities of the Master Servicer, the Trustee or the Trust. Any funds
remaining in the Policy Payments Account on the first Business Day following a
Distribution Date shall be remitted to the Credit Enhancer, pursuant to the
instructions of the Credit Enhancer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of the amount
of interest and principal paid in respect of any Investor Certificate from
moneys received under the Policy. The Credit Enhancer shall have the right to
inspect such records at reasonable times during normal business hours upon one
Business Day's prior notice to the Trustee.
(d) The Trustee shall promptly notify the Credit Enhancer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law
(a "Preference Claim") of any distribution made with respect to the Investor
Certificates. Each Investor Certificateholder, by its purchase of Investor
Certificates, the Master Servicer and the Trustee hereby agree that, the
Credit Enhancer (so long as no Credit Enhancer Default exists) may at any time
during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition and without limitation
of the foregoing, the Credit Enhancer shall be subrogated to the rights of the
Master Servicer, the Trustee and each Investor Certificateholder in the
conduct of any such Preference Claim, including, without limitation, all
rights of any party to an adversary proceeding action with respect to any
court order issued in connection with any such Preference Claim.
Section 4.03. Replacement Policy. In the event of a Credit Enhancer
Default or if the claims paying ability rating of the Credit Enhancer is
downgraded and such downgrade results in a downgrading of the then current
rating of the Investor Certificates (in each case, a "Replacement Event"), the
Depositor may, in accordance with and upon satisfaction of the conditions set
forth in the Policy, including, without limitation, payment in full of all
amounts owed to the Credit Enhancer, but shall not be required to, substitute
a new surety bond or surety bonds for the existing Policy, provided, however,
that in each case the Investor Certificates shall be rated no lower than the
rating assigned by each Rating Agency to the Investor Certificates immediately
prior to such Replacement Event and that such new surety bond will qualify as
a "similar commercially available credit enhancement contract" within the
meaning of Treas. Reg. Section 1.1001-3(e)(4)(iv)(B). It shall be a condition
to substitution of any new credit enhancement that there be delivered to the
Trustee a legal opinion, acceptable in form and substance to the Trustee, from
counsel to the provider of such new credit enhancement with respect to the
enforceability thereof and such other matters as the Trustee may require. Upon
receipt of the items referred to above and the taking of physical possession
of the new credit enhancement, the Trustee shall, within five Business Days
following receipt of such items and such taking of physical possession,
deliver the replaced Policy to the Credit Enhancer. Any other form of credit
enhancement may also be substituted for the Policy upon the occurrence of a
Replacement Event, provided, however, that the Trustee receives an Opinion of
Counsel to the effect that such substitution will not be treated as a
significant modification within the meaning of Treas. Reg. Section 1.1001-3.
Section 4.04. Effect of Payments by the Credit Enhancer; Subrogation.
Anything herein to the contrary notwithstanding, any payment with respect to
principal of or interest on any of the Investor Certificates which is made
with moneys received pursuant to the terms of the Policy shall not be
considered payment of such Investor Certificates from the Trust and shall not
result in the payment of or the provision for the payment of the principal of
or interest on such Investor Certificates within the meaning of Section 5.01.
The Depositor, the Master Servicer and the Trustee acknowledge, and each
Holder by its acceptance of an Investor Certificate agrees, that without the
need for any further action on the part of the Credit Enhancer, the Depositor,
the Master Servicer, the Trustee or the Certificate Registrar (a) to the
extent the Credit Enhancer makes payments, directly or indirectly, on account
of principal of or interest on any Investor Certificates to the Holders of
such Certificates, the Credit Enhancer will be fully subrogated to the rights
of such Holders to receive such principal and interest from the Trust and (b)
the Credit Enhancer shall be paid such principal and interest but only from
the sources and in the manner provided herein for the payment of such
principal and interest.
The Trustee and the Master Servicer shall cooperate in all respects with
any reasonable request by the Credit Enhancer for action to preserve or
enforce the Credit Enhancer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.
Section 4.05. Optional Advances of the Master Servicer. The Master
Servicer, in its sole discretion, may advance the interest component of any
delinquent Minimum Monthly Payment (or any portion thereof) by depositing such
amount into the Collection Account on or prior to the related Determination
Date.
ARTICLE V
Payments and Statements to
Certificateholders; Rights of Certificateholders
Section 5.01. Distributions.
(a) Distributions of Investor Interest Collections and Investment
Proceeds. On each Distribution Date, the Trustee or the Paying Agent, as the
case may be, shall distribute out of the Collection Account to the extent of
Investor Interest Collections collected during the related Collection Period
and the amount, if any, deposited into the Collection Account pursuant to
Section 4.05, the following amounts and in the following order of priority to
the following Persons (based on the information set forth in the Servicing
Certificate):
(i) the Trustee Fee for such Distribution Date to the Trustee;
(ii) the Premium pursuant to the Insurance Agreement to the Credit
Enhancer;
(iii) the Investor Certificate Interest for such Distribution Date
to the Investor Certificateholders and the Unpaid Investor Certificate
Interest Shortfall, if any, for such Distribution Date to the Investor
Certificateholders plus, to the extent legally permissible, interest
thereon at the Investor Certificate Rate;
(iv) the Investor Loss Amount for such Distribution Date to the
Investor Certificateholders as principal in reduction of the Investor
Certificate Principal Balance;
(v) to Investor Certificateholders as principal in reduction of the
Investor Certificate Principal Balance the aggregate amount of the
Investor Loss Reduction Amounts, if any, for previous Distribution Dates
that have not been previously reimbursed to Investor Certificateholders
pursuant to this clause (v);
(vi) to reimburse the Credit Enhancer for previously unreimbursed
Credit Enhancement Draw Amounts together with interest thereon at the
applicable rate set forth in the Insurance Agreement;
(vii) the Accelerated Principal Distribution Amount, if any, to the
Investor Certificateholders;
(viii) to the Credit Enhancer for any amounts owed to the Credit
Enhancer pursuant to the Insurance Agreement;
(ix) any amounts required to be paid to the Master Servicer pursuant
to Sections 3.08 and 7.03 which have not been previously paid to the
Master Servicer; and
(x) any remaining amount to the Transferor.
(b) Distribution of Principal Collections. Except on the Distribution
Date in December 2024, on each Distribution Date, the Trustee shall distribute
out of the Collection Account to the Investor Certificateholders the Principal
Collections up to the Scheduled Principal Collections Distribution Amount but
not in excess of the Investor Certificate Principal Balance. On the
Distribution Date in December 2024, the Trustee shall distribute to Investor
Certificateholders Principal Collections up to the Investor Certificate
Principal Balance.
(c) Application of Subordinated Transferor Collections. If, after
applying Investor Interest Collections as provided in Section 5.01(a) above,
any Required Amount remains unpaid, the Trustee shall, based on information
set forth in the Servicing Certificate for such Distribution Date, apply
Subordinated Transferor Collections to make such payments. If Investor
Interest Collections and Subordinated Transferor Collections are insufficient
to cover the Required Amount for such Distribution Date, then the remaining
Investor Loss Amount (but only to the extent of the Available Transferor
Subordinated Amount) shall be reallocated to the Transferor Principal Balance
and shall not be allocated to the Investor Certificates; provided, however,
that no such allocation of Investor Loss Amounts shall reduce the Transferor
Principal Balance below zero.
(d) Distribution of the Credit Enhancement Draw Amount. With respect to
any Distribution Date, to the extent that Investor Interest Collections on the
related Distribution Date and any amounts, if any, deposited to the Collection
Account pursuant to Section 4.05 applied in the order specified in Section
5.01(a) are insufficient to make distributions as provided in clause (iii) of
Section 5.01(a) above after giving effect to the application of Subordinated
Transferor Collections pursuant to Section 5.01(c), the Trustee will make such
payments (the "Deficiency Amount") from the amount drawn under the Policy for
such Distribution Date pursuant to Section 4.02. For any Distribution Date as
to which there is a Guaranteed Principal Distribution Amount, the Trustee
shall distribute the Guaranteed Principal Distribution Amount to
Certificateholders from the amount drawn under the Policy for such
Distribution Date pursuant to Section 4.02.
The aggregate amount of principal distributed to the Investor
Certificateholders under this Agreement shall not exceed the Original Investor
Certificate Principal Balance.
(e) Method of Distribution. The Trustee shall make distributions in
respect of a Distribution Date to each Investor Certificateholder of record on
the related Record Date (other than as provided in Section 10.01 respecting
the final distribution) by check or money order mailed to such Investor
Certificateholder at the address appearing in the Certificate Register, or
upon written request by an Investor Certificateholder delivered to the Trustee
at least five Business Days prior to such Record Date, by wire transfer (but
only if such Certificateholder is the Depository or such Certificateholder
owns of record one or more Investor Certificates having principal
denominations aggregating at least $1,000,000), or by such other means of
payment as such Investor Certificateholder and the Trustee shall agree.
Distributions among Investor Certificateholders shall be made in proportion to
the Percentage Interests evidenced by the Investor Certificates held by such
Investor Certificateholders.
(f) Distributions on Book-Entry Certificates. Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which
shall credit the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing
funds to the Certificate Owners that it represents. All such credits and
disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions
of the Investor Certificates. None of the Trustee, the Paying Agent, the
Certificate Registrar, the Depositor, the Credit Enhancer or the Master
Servicer shall have any responsibility therefor except as otherwise provided
by applicable law.
(g) Distributions to Holders of Transferor Certificates. On each
Distribution Date, the Trustee shall, based upon the information set forth in
the Servicing Certificate for such Distribution Date and subject to Section
5.01(c), distribute to the Transferor (i) the Transferor Interest Collections
for the related Collection Period and (ii) the portion, if any, of Transferor
Principal Collections for the related Collection Period in excess of
Additional Balances created during such Collection Period; provided that
collections allocable to the Transferor Certificates will be distributed to
the Transferor only to the extent that such distribution will not reduce the
amount of the Transferor Principal Balance as of the related Distribution Date
below the Minimum Transferor Interest. Amounts not distributed to the
Transferor because of such limitations will be retained in the Collection
Account until the Transferor Principal Balance exceeds the Minimum Transferor
Interest, at which time such excess shall be released to the Transferor. If
any such amounts are still retained in the Collection Account upon the
commencement of the Rapid Amortization Period, such amounts will be paid to
the Investor Certificateholders as a reduction of the Investor Certificate
Principal Balance.
Section 5.02. Calculation of the Investor Certificate Rate. On the second
LIBOR Business Day immediately preceding each Distribution Date, the Trustee
shall determine LIBOR for the Interest Period commencing on such Distribution
Date and inform the Master Servicer (at the facsimile number given to the
Trustee in writing) of such rates. On each Determination Date, the Trustee
shall determine the applicable Investor Certificate Rate for the related
Distribution Date.
Section 5.03. Statements to Certificateholders. Concurrently with each
distribution to Investor Certificateholders, the Trustee shall forward to each
Investor Certificateholder, the Master Servicer, the Credit Enhancer and each
Rating Agency a statement prepared by the Master Servicer pursuant to Section
4.01 with respect to such distribution setting forth:
(i) the Investor Floating Allocation Percentage for the preceding
Collection Period;
(ii) the Investor Certificate Distribution Amount;
(iii) the amount of Investor Certificate Interest in such
distribution and the related Investor Certificate Rate;
(iv) the amount, if any, of any Unpaid Investor Certificate Interest
Shortfall in such distribution;
(v) the amount, if any, of the remaining Unpaid Investor Certificate
Interest Shortfall after giving effect to such distribution;
(vi) the amount, if any, of principal in such distribution,
separately stating the components thereof;
(vii) the amount, if any, of the reimbursement of previous Investor
Loss Amounts in such distribution;
(viii) the amount, if any, of the aggregate of unreimbursed Investor
Loss Reduction Amounts after giving effect to such distribution;
(ix) the Servicing Fee for such Distribution Date;
(x) the Invested Amount, the Investor Certificate Principal Balance
and the Pool Factor, each after giving effect to such distribution;
(xi) the Pool Balance as of the end of the preceding Collection
Period and the aggregate of the Asset Balances of the Mortgage Loans at
the close of business on the last day of the related Collection Period;
(xii) the Credit Enhancement Draw Amount, if any;
(xiii) the number and aggregate Asset Balances of Mortgage Loans as
to which the Minimum Monthly Payment is delinquent for 30-59 days, 60-89
days and 90 or more days, respectively, as of the end of the preceding
Collection Period;
(xiv) the book value (within the meaning of 12 X.X.X.xx. 571.13 or
comparable provision) of any real estate acquired through foreclosure or
grant of a deed in lieu of foreclosure;
(xv) the amount of any optional advances pursuant to Section 4.05
hereof by the Master Servicer included in the distribution on such
Distribution Date and the aggregate amount of optional advances pursuant
to Section 4.05 hereof by the Master Servicer outstanding as of the close
of business on such Distribution Date;
(xvi) the Investor Certificate Rate applicable to such distribution;
(xvii) the number and principal balances of any Mortgage Loans
retransferred to the Transferor pursuant to (a) Section 2.04 and (b)
Section 2.06;
(xviii) the amount of Subordinated Transferor Collections, if any,
included in such distribution;
(xix) the amount of Overcollateralization Step-Down Amount, if any,
included in such distribution;
(xx) the Available Transferor Subordinated Amount for such
Distribution Date; and
(xxi) the Overcollateralization Amount for the following
Distribution Date.
In the case of information furnished pursuant to clauses (ii), (iii) in
respect of Investor Certificate Interest, (iv), (v), (vi), (vii) and (viii)
above, the amounts shall be expressed as a dollar amount per $1,000 increment
of Certificates.
Within 60 days after the end of each calendar year, the Master Servicer
shall prepare or cause to be prepared and shall forward to the Trustee the
information set forth in clauses (iii) and (vi) above aggregated for such
calendar year. Such obligation of the Master Servicer shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be provided by the Master Servicer or a Paying Agent pursuant to any
requirements of the Code.
The Trustee shall prepare or cause to be prepared (in a manner consistent
with the treatment of the Investor Certificates as indebtedness of the
Transferor, or as may be otherwise required by Section 3.14) Internal Revenue
Service Form 1099 (or any successor form) and any other tax forms required to
be filed or furnished to Certificateholders in respect of distributions by the
Trustee (or the Paying Agent) on the Investor Certificates and shall file and
distribute such forms as required by law.
Section 5.04. Rights of Certificateholders. The Investor Certificates
shall represent fractional undivided interests in the Trust, including the
benefits of the Collection Account and the right to receive Investor Interest
Collections, Principal Collections and other amounts at the times and in the
amounts specified in this Agreement; the Transferor Certificates shall
represent the remaining interest in the Trust.
ARTICLE VI
The Certificates
Section 6.01. The Certificates. The Investor Certificates and Transferor
Certificates shall be substantially in the forms set forth in Exhibits A and
B, respectively, and shall, on original issue, be executed, authenticated and
delivered by the Trustee to or upon the order of the Depositor concurrently
with the sale and assignment to the Trustee of the Trust. The Investor
Certificates shall be initially evidenced by one or more certificates
representing the entire Original Investor Certificate Principal Balance and
shall be held in minimum dollar denominations of $25,000 and integral
multiples of $1,000 in excess thereof, except that one Investor Certificate
may be in a different denomination of less than $1,000 so that the sum of the
denominations of all outstanding Investor Certificates shall equal the
Original Investor Certificate Principal Balance. The sum of the denominations
of all outstanding Investor Certificates shall equal the Original Investor
Certificate Principal Balance. The Transferor Certificates shall be issuable
as one or more certificates representing the entire interest in the assets of
the Trust other than that represented by the Investor Certificates and shall
initially be issued to the Sponsor.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer under its seal imprinted
thereon. 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 Trust,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Transferor
Certificates or did not hold such offices at the date of such Transferor
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless such Certificate shall have
been manually authenticated by the Trustee substantially in the form provided
for herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication. Subject to Section 6.02(c), the Investor
Certificates shall be Book-Entry Certificates. The Transferor Certificates
shall not be Book-Entry Certificates.
Section 6.02. Registration of Transfer and Exchange of Investor
Certificates; Appointment of Registrar. (a) The Certificate Registrar shall
cause to be kept at the Corporate Trust Office a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Investor
Certificates and of transfers and exchanges of Investor Certificates as herein
provided. The Trustee shall initially serve as Certificate Registrar for the
purpose of registering Investor Certificates and transfers and exchanges of
Investor Certificates as herein provided.
Upon surrender for registration of transfer of any Investor Certificate
at any office or agency of the Certificate Registrar maintained for such
purpose pursuant to the foregoing paragraph, the Trustee on behalf of the
Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Investor Certificates of the same
aggregate Percentage Interest.
At the option of the Investor Certificateholders, Investor Certificates
may be exchanged for other Investor Certificates in authorized denominations
and the same aggregate Percentage Interests, upon surrender of the Investor
Certificates to be exchanged at any such office or agency. Whenever any
Investor Certificates are so surrendered for exchange, the Trustee shall
execute and authenticate and deliver the Investor Certificates which the
Investor Certificateholder making the exchange is entitled to receive. Every
Investor Certificate presented or surrendered for transfer or exchange shall
(if so required by the Trustee or the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(b) Except as provided in paragraph (c) 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 Investor
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
Investor Certificates; (iii) ownership and transfers of registration of the
Investor 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 as representative
of the Certificate Owners of the Investor Certificates for purposes of
exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representative 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 Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such Letter of Representation and this
Agreement the terms of this Agreement shall control.
(c) If (i) (x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository, and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole
option, with the consent of the Trustee, elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of an Event of
Servicing Termination, the Depository, at the direction of Certificate Owners
representing Percentage Interests aggregating not less than 51% advises the
Trustee in writing that the continuation of a book-entry system through the
Depository to the exclusion of definitive, fully registered Investor
Certificates (the "Definitive Certificates") to Certificate Owners is no
longer in the best interests of the Certificate Owners, then upon surrender to
the Certificate Registrar of the Investor Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall execute and authenticate the Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed
by the Trustee, to the extent applicable with respect to such Definitive
Certificates, and the Trustee, the Certificate Registrar, the Master Servicer
and the Depositor shall recognize the Holders of the Definitive Certificates
as Certificateholders hereunder.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Certificate Registrar may require
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.
All Investor Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate is surrendered to the Certificate Registrar or the
Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar 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 or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section 6.03, the Trustee or the Certificate Registrar 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 and the Certificate Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 6.03,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 6.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Master Servicer, the Depositor,
the Trustee, the Certificate Registrar, any Paying Agent and any agent of the
Master Servicer, the Depositor, the Trustee, any Paying Agent or the
Certificate Registrar may treat the Person, including a Depository, in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 5.01 and for all other
purposes whatsoever, and none of the Master Servicer, the Depositor, the
Trustee, the Certificate Registrar, any Paying Agent or any agent of any of
them shall be affected by notice to the contrary.
Section 6.05. Restrictions on Transfer of Transferor Certificates. (a)
The Transferor Certificates shall be assigned, transferred, exchanged,
pledged, financed, hypothecated or otherwise conveyed (collectively, for
purposes of this Section 6.05 and any other Section referring to the
Transferor Certificates, "transferred" or a "transfer") only in accordance
with this Section 6.05.
(b) No transfer of a Transferor Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. Except for the initial issuance of the
Transferor Certificate to the Transferor (and any subsequent transfer by such
Transferor to one of its Affiliates), the Trustee shall require (i) the
transferee to execute an investment letter acceptable to and in form and
substance satisfactory to the Trustee certifying to the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee or (ii) if the investment letter is not delivered, a written
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
said Act or is being made pursuant to said Act, which Opinion of Counsel shall
not be an expense of the Trustee or the Depositor. The Holder of a Transferor
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Transferor 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.
(c) The Transferor Certificates and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent:
(i) the Person that acquires a Transferor Certificate shall (A) be organized
and existing under the laws of the United States of America or any state or
the District of Columbia thereof, (B) expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, the performance of
every covenant and obligation of the Transferor hereunder and (C) as part of
its acquisition of a Transferor Certificate, acquire all rights of the
Transferor or any transferee under this Section 6.05(c) to amounts payable to
such Transferor or such transferee under Sections 5.01(a)(x) and 5.01(g); (ii)
the Holder of the Transferor Certificates shall deliver to the Trustee an
Officer's Certificate stating that such transfer and such supplemental
agreement comply with this Section 6.05(c) and that all conditions precedent
provided by this Section 6.05(c) have been complied with and an Opinion of
Counsel stating that all conditions precedent provided by this Section 6.05(c)
have been complied with, and the Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying; (iii)
the Holder of the Transferor Certificates shall deliver to the Trustee a
letter from each Rating Agency confirming that its rating of the Investor
Certificates, after giving effect to such transfer, will not be reduced or
withdrawn without regard to the Policy; (iv) the transferee of the Transferor
Certificates shall deliver to the Trustee an Opinion of Counsel to the effect
that (a) such transfer will not adversely affect the treatment of the Investor
Certificates after such transfer as debt for federal and applicable state
income tax purposes, (b) such transfer will not result in the Trust being
subject to tax at the entity level for federal or applicable state tax
purposes, (c) such transfer will not have any material adverse impact on the
federal or applicable state income taxation of an Investor Certificateholder
or any Certificate Owner and (d) such transfer will not result in the
arrangement created by this Agreement or any "portion" of the Trust, being
treated as a taxable mortgage pool as defined in Section 7701(i) of the Code;
(v) all filings and other actions necessary to continue the perfection of the
interest of the Trust in the Mortgage Loans and the other property conveyed
hereunder shall have been taken or made and (vi) the transferee shall have
assumed the obligations of the Transferor pursuant to Section 7.07 hereof.
Notwithstanding the foregoing, the requirement set forth in subclause (i) (A)
of this Section 6.05(c) shall not apply in the event the Trustee shall have
received a letter from each Rating Agency confirming that its rating of the
Investor Certificates, after giving effect to a proposed transfer to a Person
that does not meet the requirement set forth in subclause (i) (A), shall not
be reduced or withdrawn. Notwithstanding the foregoing, the requirements set
forth in this paragraph (c) shall not apply to the initial issuance of the
Transferor Certificates to the Transferor.
(d) Except for the initial issuance of the Transferor Certificate to the
Transferor, no transfer of a Transferor 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, nor a Person acting on
behalf of any such plan, which representation letter shall not be an expense
of the Trustee, (ii) 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 PTCE 95-60, or (iii) in the case of any
Transferor Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, and Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan, an
Opinion of Counsel to the effect that the purchase or holding of such
Certificate will not result in the assets of the Trust 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 this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee or the Depositor.
Section 6.06. Appointment of Paying Agent. (a) The Paying Agent shall
make distributions to Investor Certificateholders from the Collection Account
pursuant to Section 5.01 and shall report the amounts of such distributions to
the Trustee. The duties of the Paying Agent may include the obligation (i) to
withdraw funds from the Collection Account pursuant to Section 3.03 and for
the purpose of making the distributions referred to above and (ii) to
distribute statements and provide information to Certificateholders as
required hereunder. The Paying Agent hereunder shall at all times be a
corporation duly incorporated and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the Trustee)
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent shall hold all sums, if
any, held by it for payment to the Investor Certificateholders in trust for
the benefit of the Investor Certificateholders entitled thereto until such
sums shall be paid to such Certificateholders and shall agree that it shall
comply with all requirements of the Code regarding the withholding of payments
in respect of federal income taxes due from Certificate Owners and otherwise
comply with the provisions of this Agreement applicable to it.
Section 6.07. Acceptance of Obligations. The Transferor, by its
acceptance of the Transferor Certificates, agrees to be bound by and to
perform all the duties of the Transferor set forth in this Agreement.
ARTICLE VII
The Master Servicer, the Sponsor and the Depositor
Section 7.01. Liability of the Sponsor, the Master Servicer and the
Depositor. The Sponsor and the Master Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Sponsor or Master Servicer, as the case may be, herein. The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Depositor herein.
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor. Any corporation into
which the Master Servicer or the Depositor may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Master Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, 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.
Section 7.03. Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors or officers or employees
or agents of the Master Servicer shall be under any liability to the Trust or
the Certificateholders for any action taken or for refraining from the taking
of any action by the Master Servicer in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Master Servicer or any such Person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties of the Master Servicer or by
reason of reckless disregard of obligations and duties of the Master Servicer
hereunder. The Master Servicer and any director or officer or employee or
agent of 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 Master Servicer and any director or officer or
employee or agent of the Master Servicer shall be indemnified by the Trust and
held harmless against any loss, liability or expense incurred in connection
with 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 its willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Master Servicer shall not
be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to duties to service the Mortgage Loans in accordance
with this Agreement, and which in its opinion may involve it in any expense or
liability; provided, however, that the Master Servicer may in its sole
discretion undertake any such action which it may deem necessary or desirable
in respect of this Agreement, and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, the
reasonable legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust and the Master
Servicer shall only be entitled to be reimbursed therefor pursuant to Section
5.01(a)(ix). The Master Servicer's right to indemnity or reimbursement
pursuant to this Section 7.03 shall survive any resignation or termination of
the Master Servicer pursuant to Section 7.04 or 8.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination).
Section 7.04. Master Servicer Not to Resign. Subject to the provisions of
Section 7.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with
any other activities carried on by it or its subsidiaries or Affiliates, the
other activities of the Master Servicer so causing such a conflict being of a
type and nature carried on by the Master Servicer or its subsidiaries or
Affiliates at the date of this Agreement or (ii) upon satisfaction of the
following conditions: (a) the Master Servicer has proposed a successor master
servicer to the Trustee in writing and such proposed successor master servicer
is reasonably acceptable to the Trustee; (b) each Rating Agency shall have
delivered a letter to the Trustee prior to the appointment of the successor
master servicer stating that the proposed appointment of such successor master
servicer as Master Servicer hereunder will not result in the reduction or
withdrawal of the then current rating of the Investor Certificates without
regard to the Policy; and (c) such proposed successor master servicer is
reasonably acceptable to the Credit Enhancer, as evidenced by a letter to the
Trustee; provided, however, that no such resignation by the Master Servicer
shall become effective until the Trustee or successor master servicer
designated by the Master Servicer as provided above shall have assumed the
Master Servicer's responsibilities and obligations hereunder or the Trustee
shall have designated a successor master servicer in accordance with Section
8.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 8.01 and 8.02
as obligations that survive the resignation or termination of the Master
Servicer. Any such determination permitting the resignation of the Master
Servicer pursuant to clause (i) above shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee and the Credit Enhancer. The
Master Servicer shall have no claim (whether by subrogation or otherwise) or
other action against any Certificateholder or the Credit Enhancer for any
amounts paid by the Master Servicer pursuant to any provision of this
Agreement.
Section 7.05. Delegation of Duties. In the ordinary course of business,
the Master Servicer at any time may delegate any of its duties hereunder to
any Person, including any of its Affiliates, or any subservicer referred to in
Section 3.01, who agrees to conduct such duties in accordance with standards
comparable to those with which the Master Servicer complies pursuant to
Section 3.01. Such delegation shall not relieve the Master Servicer of its
liabilities and responsibilities with respect to such duties and shall not
constitute a resignation within the meaning of Section 7.04.
Section 7.06. Indemnification of the Trust by the Master Servicer. The
Master Servicer shall indemnify and hold harmless the Trust and the Trustee
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of the Master Servicer's actions or omissions in servicing
or administering the Mortgage Loans that are not in accordance with this
Agreement, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim. Any
such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this
Section 7.06 shall survive termination of this Agreement.
Section 7.07. Indemnification of the Trust by the Transferor.
Notwithstanding anything to the contrary contained herein, the Transferor (i)
agrees to be liable directly to the injured party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than
those attributable to an Investor Certificateholder in the capacity as an
investor in the Investor Certificates as a result of defaults on the Mortgage
Loans) to the extent that the Transferor would be liable if the Trust were a
partnership under the Delaware Revised Uniform Limited Partnership Act in
which the Transferor was a general partner and (ii) shall indemnify and hold
harmless the Trust and the Trustee from and against any loss, liability,
expense, damage, claim or injury (other than those attributable to an Investor
Certificateholder in the capacity as an investor in the Investor Certificates
as a result of defaults on the Mortgage Loans) arising out of or based on this
Agreement by reason of any acts, omissions, or alleged acts or omissions
arising out of activities of the Trust or the Trustee, or the actions of the
Master Servicer including, but not limited to, amounts payable to the Master
Servicer pursuant to Section 7.03, any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided that
the Transferor shall not indemnify the Trustee (but shall indemnify any other
injured party) if such loss, liability, expense, damage or injury is due to
the Trustee's willful malfeasance, bad faith or gross negligence or by reason
of the Trustee's reckless disregard of its obligations hereunder. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof.
Section 7.08. Limitation on Liability of the Transferor. None of the
directors or officers or employees or agents of the Transferor shall be under
any liability to the Trust, the Trustee or the Certificateholders, it being
expressly understood that all such liability is expressly waived and released
as a condition of, and as consideration for, the execution of this Agreement
and the issuance of the Certificates; provided, however, that this provision
shall not protect any such Person against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of the duties hereunder. Except as provided in Section 7.07,
the Transferor shall not be under any liability to the Trust, the Trustee or
the Certificateholders for any action taken or for refraining from the taking
of any action in its capacity as Transferor pursuant to this Agreement whether
arising from express or implied duties under this Agreement; provided,
however, that this provision shall not protect the Transferor against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder. The Transferor and
any director or officer or employee or agent of the Transferor 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.
ARTICLE VIII
Servicing Termination
Section 8.01. Events of Servicing Termination. If any one of the
following events ("Events of Servicing Termination") shall occur and be
continuing:
(i) Any failure by the Master Servicer to deposit in the Collection
Account any deposit required to be made under the terms of this Agreement
which continues unremedied for a period of five Business Days (or, if the
Master Servicer is permitted to remit collections on a monthly basis
pursuant to Section 3.02(b), three Business Days) after the date upon
which written notice of such failure shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the
Credit Enhancer or Holders of Investor Certificates evidencing Percentage
Interests aggregating not less than 25%; or
(ii) Failure on the part of the Master Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Master Servicer set forth in the Certificates or in this Agreement, which
failure materially and adversely affects the interests of the
Certificateholders or the Credit Enhancer and continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, and stating that such notice is a
"Notice of Default" hereunder, shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the
Credit Enhancer or the Holders of Investor Certificates evidencing
Percentage Interests aggregating not less than 25%; or
(iii) The entry against the Master Servicer of a decree or order by
a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60
consecutive days; or
(iv) The consent by the Master Servicer to the appointment of a
trustee, conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Master Servicer or of or relating to substantially all of its property;
or 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
any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations;
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Master Servicer, with respect
to an Event of Servicing Termination specified in (i) through (iv), above,
either the Trustee, the Credit Enhancer or the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than 51%
with the consent of the Credit Enhancer, by notice then given in writing to
the Master Servicer (and to the Trustee if given by the Credit Enhancer or the
Holders of Investor Certificates) may terminate all of the rights and
obligations of the Master Servicer as servicer under this Agreement. Any such
notice to the Master Servicer shall also be given to each Rating Agency and
the Credit Enhancer. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section 8.01; and, without limitation, 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 of each Mortgage Loan and related documents, or
otherwise. The Master Servicer agrees to cooperate with the Trustee in
effecting the termination of the responsibilities and rights of the Master
Servicer hereunder, including, without limitation, the transfer to the Trustee
for the administration by it of all cash amounts that shall at the time be
held by the Master Servicer and to be deposited by it in the Collection
Account, or that have been deposited by the Master Servicer in the Collection
Account or thereafter received by the Master Servicer with respect to the
Mortgage Loans. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Mortgage Files to the successor
Master Servicer and amending this Agreement to reflect such succession as
Master Servicer pursuant to this Section 8.01 shall be paid by the predecessor
Master Servicer (or if the predecessor Master Servicer is the Trustee, the
initial Master Servicer) upon presentation of reasonable documentation of such
costs and expenses.
Notwithstanding the foregoing, a delay in or failure of performance under
Section 8.01(i) for a period of ten Business Days or under Section 8.01(ii)
for a period of 60 Business Days, shall not constitute an Event of Servicing
Termination if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Master Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of declared or undeclared
war, public disorder, rebellion or sabotage, epidemics, landslides, lightning,
fire, hurricanes, earthquakes, floods or similar causes. The preceding
sentence shall not relieve the Master Servicer from using its best efforts to
perform its respective obligations in a timely manner in accordance with the
terms of this Agreement and the Master Servicer shall provide the Trustee, the
Transferor, the Credit Enhancer and the Investor Certificateholders with an
Officers' Certificate giving prompt notice of such failure or delay by it,
together with a description of its efforts to so perform its obligations. The
Master Servicer shall immediately notify the Trustee in writing of any Events
of Servicing Termination.
Section 8.02. Trustee to Act; Appointment of Successor. (a) On and after
the time the Master Servicer receives a notice of termination pursuant to
Section 8.01 or resigns pursuant to Section 7.04, the Trustee shall be the
successor in all respects 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. Notwithstanding the above, if the Trustee becomes the
Master Servicer hereunder, it shall have no responsibility or obligation (i)
of repurchase or substitution with respect to any Mortgage Loan, (ii) with
respect to any representation or warranty of the Master Servicer, and (iii)
for any act or omission of either a predecessor or successor Master Servicer
other than the Trustee. As compensation therefor, the Trustee shall be
entitled to such compensation as the Master Servicer would have been entitled
to hereunder if no such notice of termination had been given. In addition, the
Trustee will be entitled to compensation with respect to its expenses in
connection with conversion of certain information, documents and record
keeping, as provided in Section 7.04(b). Notwithstanding the above, (i) if the
Trustee is unwilling to act as successor Master Servicer, or (ii) if the
Trustee is legally unable so to act, the Trustee may (in the situation
described in clause (i)) or shall (in the situation described in clause (ii))
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan
or home equity loan servicer having a net worth of not less than $15,000,000
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; provided that any such successor Master Servicer shall be
acceptable to the Credit Enhancer, as evidenced by the Credit Enhancer's prior
written consent, which consent shall not be unreasonably withheld; and
provided further that the appointment of any such successor Master Servicer
will not result in the qualification, reduction or withdrawal of the ratings
assigned to the Certificates by the Rating Agencies without regard to the
Policy. Pending appointment of a successor to the Master Servicer hereunder,
unless the Trustee is prohibited by law from so acting, the Trustee shall act
in such capacity as hereinabove provided. In connection with such appointment
and assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Master Servicer would otherwise have received pursuant to Section 3.08 (or
such lesser compensation as the Trustee and such successor shall agree). The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) Any successor, including the Trustee, to the Master Servicer as
master servicer shall during the term of its service as master servicer (i)
continue to service and administer the Mortgage Loans for the benefit of
Certificateholders and the Credit Enhancer and (ii) maintain in force a policy
or policies of insurance covering errors and omissions in the performance of
its obligations as Master Servicer hereunder and a fidelity bond in respect of
its officers, employees and agents to the same extent as the Master Servicer
is so required pursuant to Section 3.12. The appointment of a successor Master
Servicer shall not affect any liability of the predecessor Master Servicer
which may have arisen under this Agreement prior to its termination as Master
Servicer (including, without limitation, any deductible under an insurance
policy pursuant to Section 3.04), nor shall any successor Master Servicer be
liable for any acts or omissions of the predecessor Master Servicer or for any
breach by such Master Servicer of any of their representations or warranties
contained herein.
Section 8.03. Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer pursuant to this Article
VIII or Section 7.04, the Trustee shall give prompt written notice thereof to
the Certificateholders at their respective addresses appearing in the
Certificate Register, the Credit Enhancer and each Rating Agency.
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee. The Trustee, prior to the occurrence of
an Event of Servicing Termination and after the curing or waiver of all Events
of Servicing Termination which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Agreement.
If an Event of Servicing Termination has occurred (which has not been cured or
waived) of which a Responsible Officer has knowledge, 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 man would
exercise or use under the circumstances in the conduct of his own affairs;
provided, however, that if the Trustee is acting as Master Servicer it shall
use the same degree of care and skill as is required of the Master Servicer
under this Agreement.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
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) prior to the occurrence of an Event of Servicing Termination of
which a Responsible Officer of the Trustee has knowledge, and after the
curing or waiver of all such Events of Servicing Termination which may
have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable 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, in the absence of bad faith on the part of the Trustee, 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;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the consent or direction of the Credit Enhancer or in
accordance with the direction of the Holders of Investor Certificates
evidencing Percentage Interests aggregating not less than 51% relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any failure
by the Master Servicer to comply with the obligations of the Master
Servicer referred to in clauses (i) and (ii) of Section 8.01 or of the
occurrence of a Rapid Amortization Event unless a Responsible Officer of
the Trustee at the Corporate Trust Office obtains actual knowledge of
such failure or the Trustee receives written notice of such failure from
the Master Servicer, the Credit Enhancer or the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than
51%.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. None
of the provisions contained in this Agreement shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of the Master Servicer under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested
with the rights, duties, powers and privileges of, the Master Servicer in
accordance with the terms of this Agreement and in no event shall it be
required to perform or accept responsibility for the obligations of the
Depositor, the Sponsor or the Transferor.
Section 9.02. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 9.01:
(i) the Trustee may request and rely upon, and shall be protected in
acting or refraining from acting upon, any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of
the 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 or the
Credit Enhancer, pursuant to the provisions of this Agreement, unless
such Certificateholders or the Credit Enhancer shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the
Trustee to perform any discretionary act enumerated in this Agreement
shall not be construed as a duty, and the Trustee shall not be answerable
for other than its negligence or wilful misconduct in the performance of
any such act; nothing contained herein shall, however, relieve the
Trustee of the obligations, upon the occurrence of an Event of Servicing
Termination (which has not been cured or waived) of which a Responsible
Officer has knowledge, to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs, unless it is acting as
Master Servicer;
(iv) the Trustee shall not be personally 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;
(v) prior to the occurrence of an Event of Servicing Termination and
after the curing or waiver of all Events of Servicing Termination which
may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or documents, unless
requested in writing to do so by Holders of Investor Certificates
evidencing Percentage Interests aggregating not less than 51%; provided,
however, that if the payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to such
proceeding. The reasonable expense of every such examination shall be
paid by the Master Servicer or, if paid by the Trustee, shall be
reimbursed by the Master Servicer upon demand. Nothing in this clause (v)
shall derogate from the obligation of the Master Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors;
(vi) the Trustee shall not be accountable, shall have no liability
and makes no representation as to any acts or omissions hereunder of the
Master Servicer until such time as the Trustee may be required to act as
Master Servicer pursuant to Section 8.02; and
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through an
Affiliate, agents or attorneys or a custodian.
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans. The
recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than
the signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for
the use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer.
The Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than
if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 8.02); the validity of the assignment of any Mortgage Loan to the
Trustee or of any intervening assignment; the completeness of any Mortgage
Loan; the performance or enforcement of any Mortgage Loan (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
8.02); the compliance by the Depositor, the Sponsor or the Master Servicer
with any warranty or representation made under this Agreement or in any
related document or the accuracy of any such warranty or representation prior
to the Trustee's receipt of notice or other discovery of any non-compliance
therewith or any breach thereof; any investment of monies by or at the
direction of the Master Servicer or any loss resulting therefrom, it being
understood that the Trustee shall remain responsible for any Trust property
that it may hold in its individual capacity; the acts or omissions of any of
the Depositor, the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 8.02), any subservicer or
any Mortgagor; any action of the Master Servicer (other than if the Trustee
shall assume the duties of the Master Servicer pursuant to Section 8.02), or
any subservicer taken in the name of the Trustee; the failure of the Master
Servicer or any subservicer to act or perform any duties required of it as
agent of the Trustee hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 8.02); provided, however,
that the foregoing shall not relieve the Trustee of its obligation to perform
its duties under this Agreement. The Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder (unless the Trustee shall have become
the successor Master Servicer) or, except as otherwise provided in Section
3.13, to prepare or file any Securities and Exchange Commission filing for the
Trust or to record this Agreement.
Section 9.04. 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 Trustee and may transact any
banking and trust business with the Sponsor, the Master Servicer, the Credit
Enhancer or the Depositor.
Section 9.05. Master Servicer to Pay Trustee's Fees and Expenses; Master
Servicer to Indemnify. The Master Servicer covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered
by it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Master Servicer will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith or which
is the responsibility of Certificateholders hereunder. The Master Servicer
covenants and agrees to indemnify the Trustee from, and hold it harmless
against, any and all losses, liabilities, damages, claims or expenses other
than those resulting from the negligence or bad faith of the Trustee. This
section shall survive termination of this Agreement or the resignation or
removal of any Trustee hereunder.
Section 9.06. Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be a corporation duly incorporated and validly existing
under the laws of the United States of America or any state thereof,
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. If such corporation 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 9.06, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The principal office of the Trustee
(other than the initial Trustee) shall be in a state with respect to which an
Opinion of Counsel has been delivered to such Trustee at the time such Trustee
is appointed Trustee to the effect that the Trust will not be a taxable entity
under the laws of such state. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 9.06, the
Trustee shall resign immediately in the manner and with the effect specified
in Section 9.07.
Section 9.07. Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Transferor, the Depositor, the Master Servicer, the
Credit Enhancer and each Rating Agency. Upon receiving such notice of
resignation, the Transferor shall promptly appoint a successor Trustee
(approved in writing by the Credit Enhancer, so long as such approval is not
unreasonably withheld) by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee (who shall deliver a
copy to the Master Servicer) and one copy to the successor Trustee; provided,
however, that any such successor Trustee shall be subject to the prior written
approval of the Transferor. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of
such notice of 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 9.06 and shall fail to resign after written request
therefor by the Transferor or the Credit Enhancer, or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a 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 if a tax is imposed or threatened with respect to the Trust by
any state in which the Trustee or the Trust is located (which tax cannot be
vacated by the appointment of a co-Trustee or separate trustee pursuant to
Section 9.10), then the Transferor or the Credit Enhancer may remove the
Trustee. If the Transferor or the Credit Enhancer removes the Trustee under
the authority of the immediately preceding sentence, the Transferor shall
promptly appoint a successor Trustee (approved in writing by the Credit
Enhancer, which approval shall not be unreasonably withheld) by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee.
The Holders of Investor Certificates evidencing Percentage Interests
aggregating over 50% of all Investor Certificates or the Credit Enhancer may
at any time remove the Trustee by written instrument or instruments delivered
to the Master Servicer, the Transferor and the Trustee; the Transferor shall
thereupon use its best efforts to appoint a successor trustee in accordance
with this Section.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 9.07 shall not
become effective until acceptance of appointment by the successor Trustee as
provided in Section 9.08.
Section 9.08. Successor Trustee. Any successor Trustee appointed as
provided in Section 9.07 shall execute, acknowledge and deliver to the
Transferor, the Depositor, the Master Servicer, the Credit Enhancer and to its
predecessor Trustee 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 like effect as if originally
named as Trustee. The Transferor, 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 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
9.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 9.08, the successor Trustee shall mail notice of the succession of
such Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency. If the Master
Servicer fails to mail such notice within 30 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Master Servicer.
Section 9.09. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated,
or any Person resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any Person succeeding to all or substantially
all of the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such Person shall be eligible under the provisions of
Section 9.06, 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.
Section 9.10. 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 or any Mortgaged Property may at the time be located, the
Transferor and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments necessary to appoint one or more Persons
approved by the Credit Enhancer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 9.10, such
powers, duties, obligations, rights and trusts as the Transferor and the
Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Master Servicer. If
the Transferor shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in the case an Event of Servicing
Termination 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 9.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 9.08. The Master Servicer shall be responsible for the fees of any
co-trustee or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of an Event of Servicing
Termination, the Trustee acting alone may accept the resignation or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article IX. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Transferor and the Master Servicer.
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 9.11. Limitation of Liability. The Certificates are executed by
the Trustee, not in its individual capacity but solely as Trustee of the
Trust, in the exercise of the powers and authority conferred and vested in it
by this Agreement. Each of the undertakings and agreements made on the part of
the Trustee in the Certificates is made and intended not as a personal
undertaking or agreement by the Trustee but is made and intended for the
purpose of binding only the Trust.
Section 9.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery
of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents
and counsel, be for the ratable benefit or the Certificateholders in respect
of which such judgment has been recovered.
Section 9.13. Suits for Enforcement. In case an Event of Servicing
Termination or other default by the Master Servicer, the Transferor, the
Depositor or the Sponsor hereunder shall occur and be continuing, the Trustee,
in its discretion, may proceed to protect and enforce its rights and the
rights of the Investor Certificateholders under this Agreement by a suit,
action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement
or in aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy, as the Trustee,
being advised by counsel, shall deem most effectual to protect and enforce any
of the rights of the Trustee and the Certificateholders.
ARTICLE X
Termination
Section 10.01. Termination. (a) The respective obligations and
responsibilities of the Sponsor, the Master Servicer, the Depositor, the
Transferor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Master Servicer to send certain
notices as hereinafter set forth) shall terminate upon the last action
required to be taken by the Trustee on the final Distribution Date pursuant to
this Article X following the later of (A) payment in full of all amounts owing
to the Credit Enhancer and (B) the earliest of (i) the transfer, under the
conditions specified in Section 10.01(b), to the Transferor of the Investor
Certificateholders' interest in each Mortgage Loan and all property acquired
in respect of any Mortgage Loan remaining in the Trust for an amount equal to
the sum of (w) the Investor Certificate Principal Balance, (x) accrued and
unpaid Investor Certificate Interest through the day preceding the final
Distribution Date, and (y) interest accrued on any Unpaid Investor Certificate
Interest Shortfall, to the extent legally permissible, (ii) the day following
the Distribution Date on which the distribution made to Investor
Certificateholders has reduced the Investor Certificate Principal Balance to
zero, (iii) the final payment or other liquidation of the last Mortgage Loan
remaining in the Trust (including without limitation the disposition of the
Mortgage Loans pursuant to Section 10.02) or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan
and (iv) the Distribution Date in December 2024; provided, however, that in no
event shall the trust created hereby continue beyond the expiration of 21
years from the date of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. James's,
living on the date hereof. Upon termination in accordance with clause (i) or
(ii) of this Section 10.01, the Trustee shall execute such documents and
instruments of transfer presented by the Transferor, in each case without
recourse, representation or warranty, and take such other actions as the
Transferor may reasonably request to effect the transfer of the Mortgage Loans
to the Transferor.
(b) The Transferor shall have the right to exercise the option to effect
the transfer to the Transferor of each Mortgage Loan pursuant to Section
10.01(a) above on any Distribution Date on or after the Distribution Date
immediately prior to which the Investor Certificate Principal Balance is less
than or equal to 10% of the Original Investor Certificate Principal Balance
and all amounts due and owing to the Credit Enhancer for unpaid premiums and
unreimbursed draws on the Policy, together with interest thereon as provided
under the Insurance Agreement, have been paid.
(c) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Investor Certificateholders may surrender their Investor Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee (upon receipt of written directions from the
Transferor, if the Transferor is exercising its right to transfer of the
Mortgage Loans, given not later than the first day of the month preceding the
month of such final distribution) to the Credit Enhancer and to the Master
Servicer by letter to Investor Certificateholders mailed not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of such final distribution specifying (i) the Distribution Date upon which
final distribution of the Investor Certificates will be made upon presentation
and surrender of Investor Certificates at the office or agency of the Trustee
therein designated, (ii) the amount of any such final distribution and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
the Investor Certificates at the office or agency of the Trustee therein
specified. In the event written directions are delivered by the Transferor to
the Trustee as described in the preceding sentence, the Transferor shall
deposit in the Collection Account on or before the Distribution Date for such
final distribution in immediately available funds an amount which, when added
to the funds on deposit in the Collection Account that are payable to the
Investor Certificateholders, will be equal to the retransfer amount for the
Mortgage Loans computed as above provided.
(d) Upon presentation and surrender of the Investor Certificates, the
Trustee shall cause to be distributed to the Holders of Investor Certificates
on the Distribution Date for such final distribution, in proportion to the
Percentage Interests of their respective Investor Certificates and to the
extent that funds are available for such purpose, an amount equal to (i) if
such final distribution is not being made pursuant to the transfer to the
Transferor pursuant to Section 10.01(a)(i), the amount required to be
distributed to Investor Certificateholders pursuant to Section 5.01 for such
Distribution Date and (ii) if such final distribution is being made pursuant
to such retransfer, the amount specified in Section 10.01(a)(i). The
distribution on such final Distribution Date pursuant to a retransfer pursuant
to Section 10.01(a)(i) shall be in lieu of the distribution otherwise required
to be made on such Distribution Date in respect of the Certificates. On the
final Distribution Date prior to having made the distributions called for
above, the Trustee shall, based upon the information set forth in the
Servicing Certificate for such Distribution Date, withdraw from the Collection
Account and remit to the Credit Enhancer the lesser of (x) the amount
available for distribution on such final Distribution Date, net of any portion
thereof necessary to pay the amounts described in clauses (d)(i) and (ii)
above and (y) the unpaid amounts due and owing to the Credit Enhancer for
unpaid premiums and unreimbursed draws on the Policy, together with interest
thereon as provided under the Insurance Agreement.
(e) In the event that all of the Investor Certificateholders shall not
surrender their Investor Certificates for final payment and cancellation on or
before such final Distribution Date, the Trustee shall on such date cause all
funds in the Collection Account not distributed in final distribution to
Investor Certificateholders to be withdrawn therefrom and credited to the
remaining Investor Certificateholders by depositing such funds in a separate
escrow account for the benefit of such Investor Certificateholders and the
Transferor (if the Transferor has exercised its right to transfer the Mortgage
Loans) or the Trustee (in any other case) shall give a second written notice
to the remaining Investor Certificateholders to surrender their Investor
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Investor
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 Investor Certificateholders concerning surrender of
their Investor Certificates, and the cost thereof shall be paid out of the
funds on deposit in such escrow account.
ARTICLE XI
Rapid Amortization Events
Section 11.01. Rapid Amortization Events. If any one of the following
events shall occur during the Managed Amortization Period:
(a) failure on the part of the Sponsor (i) to make any payment or
deposit required by the terms of this Agreement, on or before the date
occurring three Business Days after the date such payment or deposit is
required to be made herein, or (ii) to cause the Depositor to duly
observe or perform in any material respect the covenants of the Depositor
set forth in Section 2.05 or (iii) duly to observe or perform in any
material respect any other covenants or agreements of the Sponsor set
forth in this Agreement, which failure, in each case, materially and
adversely affects the interests of the Certificateholders or the Credit
Enhancer and which, in the case of clause (iii), continues unremedied and
continues to affect materially and adversely the interests of the
Certificateholders or the Credit Enhancer for a period of 60 days (five
days in the case of any failure to take the action specified in the
second sentence of Section 2.01(b)) after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Sponsor by the Trustee, or to the Sponsor and the
Trustee by the Credit Enhancer or the Holders of Investor Certificates
evidencing Percentage Interests aggregating not less than 51%;
(b) any representation or warranty made by the Sponsor or the
Depositor in this Agreement shall prove to have been incorrect in any
material respect when made, as a result of which the interests of the
Investor Certificateholders or the Credit Enhancer are materially and
adversely affected and which continues to be incorrect in any material
respect and continues to affect materially and adversely the interests of
the Certificateholders or the Credit Enhancer for a period of 60 days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Sponsor or the
Depositor, as the case may be, by the Trustee, or to the Sponsor, the
Depositor and the Trustee by either the Credit Enhancer or the Holders of
Investor Certificates evidencing Percentage Interests aggregating not
less than 51%; provided, however, that a Rapid Amortization Event
pursuant to this subparagraph (b) shall not be deemed to have occurred
hereunder if the Sponsor has accepted retransfer of the related Mortgage
Loan or Mortgage Loans or made a substitution therefor during such period
(or such longer period (not to exceed an additional 60 days) as the
Trustee may specify) in accordance with the provisions hereof;
(c) the Transferor or the Depositor shall voluntarily go into
liquidation, consent to the appointment of a conservator or receiver or
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Transferor or the Depositor, or of or relating to all or
substantially all of such Person's property, or a decree or order of a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, liquidator or
similar person 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
Transferor or the Depositor and such decree or order shall have remained
in force undischarged or unstayed for a period of 30 days; or the
Transferor or the Depositor shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations;
(d) the Trust shall become subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended; or
(e) the aggregate of all draws under the Policy exceeds 1% of the
Cut-off Date Pool Balance;
then, in the case of any event described in subparagraph (a) or (b) after the
applicable grace period, if any, set forth in such subparagraphs, either the
Trustee, the Credit Enhancer or the Holders of Investor Certificates
evidencing Percentage Interests aggregating more than 51%, by notice given in
writing to the Transferor, the Depositor and the Master Servicer (and to the
Trustee if given by either the Credit Enhancer or the Investor
Certificateholders) may declare that an early amortization event (a "Rapid
Amortization Event") has occurred as of the date of such notice, and in the
case of any event described in subparagraph (c), (d) or (e), a Rapid
Amortization Event shall occur without any notice or other action on the part
of the Trustee, the Credit Enhancer or the Investor Certificateholders,
immediately upon the occurrence of such event.
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment. This Agreement may be amended from time to time
by the Sponsor, the Master Servicer, the Depositor and the Trustee, in each
case without the consent of any of the Certificateholders, but only with the
consent of the Credit Enhancer (which consent shall not be unreasonably
withheld), (i) to cure any ambiguity, (ii) to correct any defective provisions
or to correct or supplement any provisions herein that may be inconsistent
with any other provisions herein, (iii) to add to the duties of the Sponsor,
the Depositor, the Transferor or the Master Servicer, (iv) to add any other
provisions with respect to matters or questions arising under this Agreement
or the Policy, as the case may be, which shall not be inconsistent with the
provisions of this Agreement, (v) to add or amend any provisions of this
Agreement as required by any Rating Agency or any other nationally recognized
statistical rating organization in order to maintain or improve any rating of
the Investor Certificates (it being understood that, after obtaining the
ratings in effect on the Closing Date, neither the Trustee, the Transferor,
the Sponsor, the Depositor nor the Master Servicer is obligated to obtain,
maintain or improve any such rating), (vi) to add or amend any provisions of
this Agreement to correct or cure any defective provision or ambiguity as a
result of a transfer of the Transferor Certificates pursuant to Section 6.05,
(vii) to comply with any requirement imposed by the Code or (viii) to increase
the Increased Senior Lien Limitation; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, materially and adversely
affect the interests of any Certificateholder or the Credit Enhancer; and
provided, further, that the amendment shall not be deemed to adversely affect
in any material respect the interests of the Certificateholders and no opinion
referred to in the preceding proviso shall be required to be delivered 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 Investor Certificates without
regard to the Policy. Notwithstanding the foregoing, any amendment pursuant to
clause (viii) above shall be permissible only upon receipt of 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
Investor Certificateholders without regard to the Policy.
This Agreement also may be amended from time to time by the Master
Servicer, the Sponsor, the Depositor and the Trustee, and the Master Servicer
and the Credit Enhancer, may from time to time consent to the amendment of the
Policy, with the consent of the Holders of the Investor Certificates
evidencing Percentage Interests aggregating not less than 51%, and in the case
of an amendment to this Agreement, with the consent of the Credit Enhancer,
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 Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments on the Certificates or distributions or payments under the Policy
which are required to be made on any Certificate without the consent of the
Holder of such Certificate or (ii) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding or (iii) adversely effect in any material
respect the interests of the Credit Enhancer.
Notwithstanding the foregoing, the Agreement may not be amended unless,
in connection with such amendment, an Opinion of Counsel is furnished to the
Trustee that such amendment will not (i) adversely affect the status of the
Investor Certificates as debt; (ii) result in the Trust being taxable at the
entity level; or (iii) result in the Trust being classified as a taxable
mortgage pool (as defined in Section 7701(i) of the Code).
Following the execution and delivery of any such amendment hereto or to
the Policy to which the Credit Enhancer was required to consent, either the
Transferor, if the Transferor requested the amendment, or the Master Servicer,
if the Master Servicer requested the amendment, shall reimburse the Credit
Enhancer for the reasonable out-of-pocket costs and expenses incurred by the
Credit Enhancer in connection with such amendment.
Prior to the execution of any such amendment, the party hereto requesting
any such amendment shall furnish written notification of the substance of such
amendment to each Rating Agency. In addition, promptly after the execution of
any such amendment made with the consent of the Investor Certificateholders,
the Trustee shall furnish written notification of the substance of such
amendment to each Investor Certificateholder and fully executed original
counterparts of the instruments effecting such amendment to the Credit
Enhancer.
It shall not be necessary for the consent of Investor Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment or consent, 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 requirements as the Trustee may prescribe.
In executing any amendment permitted by this Section 12.01, the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that such amendment is authorized or permitted
hereby and that all conditions precedent to the execution and delivery of such
amendment have been satisfied. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights, duties
or immunities under this Agreement or otherwise.
Section 12.02. Recordation of Agreement. 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
Trustee, but only upon direction of Investor Certificateholders accompanied by
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Investor Certificateholders. The
Investor Certificateholders requesting such recordation shall bear all costs
and expenses of such recordation. The Trustee shall have no obligation to
ascertain whether such recordation so 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 12.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Investor Certificateholder shall not operate to terminate
this Agreement or the Trust, nor entitle such Investor Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor 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 in
Sections 8.01, 9.01, 9.02, 11.01 and 12.01) or in any manner otherwise control
the operation and management of the Trust, 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 Investor
Certificateholder be under any liability to any third person 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 default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Investor Certificates evidencing
Percentage Interests aggregating not less than 51% shall have made written
request upon 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 equal, ratable and
common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 12.03, each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or
in equity.
By accepting its Investor Certificate, each Investor Certificateholder
agrees that unless a Credit Enhancer Default exists, the Credit Enhancer shall
have the right to exercise all rights of the Investor Certificateholders under
this Agreement without any further consent of the Investor Certificateholders.
Section 12.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 12.05. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified mail, return receipt requested, to (a) in
the case of the Depositor, 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Legal Department, (b) in the case of the Master Servicer,
Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Legal Department, (c) in the case of the Trustee, at the Corporate
Trust Office, (d) in the case of the Credit Enhancer, Xxx Xxxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxx (telecopy number (212)
363-1459), (e) in the case of Xxxxx'x, Residential Loan Monitoring Group, 4th
Floor, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (f) in the case of
Standard & Poor's, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. In each case in which a notice or other
communication to the Credit Enhancer refers to an Event of Servicing
Termination or a claim under the Policy or with respect to which failure on
the part of the Credit Enhancer to respond shall be deemed to constitute
consent or acceptance, then a copy of such notice or other communication
should also be sent to the attention of the General Counsel and shall be
marked to indicate "URGENT MATERIAL ENCLOSED." Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder receives such notice. Any notice or other document
required to be delivered or mailed by the Trustee to any Rating Agency shall
be given on a best efforts basis and only as a matter of courtesy and
accommodation and the Trustee shall have no liability for failure to deliver
such notice or document to any Rating Agency.
Section 12.06. 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 12.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.05, 7.02 and 7.04, this
Agreement may not be assigned by the Depositor or the Master Servicer without
the prior written consent of the Credit Enhancer and Holders of the Investor
Certificates evidencing Percentage Interests aggregating not less than 66%.
Section 12.08. Certificates Nonassessable and Fully Paid. The parties
agree that the Investor Certificateholders shall not be personally liable for
obligations of the Trust, that the beneficial ownership interests represented
by the Certificates shall be nonassessable for any losses or expenses of the
Trust or for any reason whatsoever, and that the Certificates upon execution,
authentication and delivery thereof by the Trustee pursuant to Section 2.07 or
6.02 are and shall be deemed fully paid.
Section 12.09. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders,
the Certificate Owners, the Credit Enhancer and their respective successors
and permitted assigns. Except as otherwise provided in this Agreement, no
other Person will have any right or obligation hereunder.
Section 12.10. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 12.11. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
IN WITNESS WHEREOF, the Depositor, the Sponsor, the Master Servicer and
the Trustee have caused this Agreement to be duly executed by their respective
officers all as of the day and year first above written.
CWABS, INC.,
as Depositor
By: ___________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Sponsor and Master Servicer
By: ____________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: ____________________________
Name:
Title:
State of _______________ )
) ss.:
County of_______________ )
On the __th day of November, 1998 before me, a notary public in and for
the State of ____________, personally appeared ____________, known to me who,
being by me duly sworn, did depose and say that he resides at
_________________________________, __________; that he is the ______________
of CWABS, Inc. a Delaware corporation, one of the parties that executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by order of the Board of Directors of said corporation; and that he signed his
name thereto by like order.
---------------------------
Notary Public
[Notarial Seal]
State of _______________ )
) ss.:
County of__________ )
On the __th day of November, 1998 before me, a notary public in and for
the State of ________, personally appeared _____________________, known to me
who, being by me duly sworn, did depose and say that he resides at
_________________, ____________, ________ _____; that he is the ______________
of The First National Bank of Chicago, a national banking association, one of
the parties that executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that he signed his name thereto by like order.
---------------------------------
Notary Public
[Notarial Seal]
State of _______________ )
) ss.:
County of_______________ )
On the __th day of November, 1998 before me, a notary public in and for
the State of New York, personally appeared ____________, known to me who,
being by me duly sworn, did depose and say that he resides at
______________________________ _____________; that he is the
________________________ of Countrywide Home Loans, Inc., a New York
corporation, one of the parties that executed the foregoing instrument; and
that he signed his name thereto by order of the Board of Directors of said
corporation.
-------------------------------------
Notary Public
[Notarial Seal]
Exhibit A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Original Investor
Certificate Principal Balance
of this Investor
Certificate : $156,000,000
Certificate Rate : Variable
Initial Aggregate Investor
Certificate Principal Balance
of all Investor Certificates $156,000,000
CUSIP No. : ____________
Date of Pooling
and Servicing
Agreement : November 14, 1998
Certificate No. : ___
Cut-off Date : November 14, 1998
First Distribution
Date: : January 15, 1999
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 1998-D
INVESTOR CERTIFICATE
evidencing a percentage interest in the distributions allocable
to the Investor Certificates evidencing an undivided interest
in a Trust consisting primarily of a pool of adjustable rate
home equity revolving credit line mortgage loans sold by
CWABS, INC.
This Certificate does not represent an obligation of or interest in
CWABS, Inc. (the "Depositor"), Countrywide Home Loans, Inc. or the Trustee
referred to below or any of their 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
Original Investor Certificate Principal Balance of this Certificate by the
aggregate Original Investor Certificate Principal Balance of all Investor
Certificates) in certain monthly distributions with respect to a Trust
consisting primarily of a pool of mortgage loans (the "Mortgage Loans"),
transferred by the Depositor to the Trustee and serviced by Countrywide Home
Loans, Inc. (in such capacity, the "Master Servicer", including any successor
Master Servicer under the Agreement referred to below). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Depositor, the Master Servicer, Countrywide Home Loans,
Inc., as sponsor (in such capacity, the "Sponsor"), and The First National
Bank of Chicago, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not
defined herein, 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.
This Certificate is one of the Investor Certificates from a duly
authorized issue of Certificates designated as Revolving Home Equity Loan
Asset Backed Certificates, Series 1998-D, representing, to the extent
specified in the Agreement, an undivided interest in: (i) each Mortgage Loan
including its Asset Balance (including all Additional Balances) and all
collections in respect thereof received after the Cut-off Date (excluding
payments in respect of accrued interest due on or prior to the Cut-off Date),
(ii) property that secured a Mortgage Loan that is acquired by foreclosure or
deed in lieu of foreclosure, (iii) an irrevocable and unconditional limited
financial guarantee insurance policy (the "Policy"), (iv) the Depositor's
rights under the hazard insurance policies in respect of the Mortgage Loans,
(v) an assignment of the Depositor's rights under the purchase agreement dated
as of November 14, 1998 between the Sponsor, as seller, and the Depositor, as
purchaser (collectively, the "Trust Assets") and (vi) certain other property
described in the Agreement.
Distributions on this Certificate will be made by the Trustee, or by the
Paying Agent, if any, appointed pursuant to the Agreement, by check mailed to
the Person entitled thereto as such name and address shall appear on the
Certificate Register or, upon written request by such Person delivered to the
Trustee at least five Business Days prior to the related Record Date, by wire
transfer (but only if such Person owns of record one or more Investor
Certificates having principal denominations aggregating at least $1,000,000),
or by such other means of payment as such Person and the Trustee shall agree.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee or the Paying Agent, if one has been
appointed, of the pendency of such distribution, and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Trustee for that purpose.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month or if such day is not a Business Day, then on the
next succeeding Business Day (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day preceding
such Distribution Date (the "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 Investor Certificates on such
Distribution Date under the terms of the Agreement. Notwithstanding the
foregoing, if Definitive Certificates have become available pursuant to the
Agreement, the Record Date shall be the last day of the calendar month
preceding the month of such Distribution Date.
The Certificates are limited in right of payment to certain payments
on and collections in respect of the Mortgage Loans, all as more specifically
set forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Collection Account for payment hereunder, and that the Trustee in its
individual capacity is not personally 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.
As provided in the Agreement, withdrawals from the Collection Account may
be made from time to time for purposes other than distributions to the
Investor Certificateholders and, subject to certain conditions in the
Agreement, Mortgage Loans may, at the election of the Transferor, be removed
from the Trust and transferred to the Transferor (as defined in 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 hereby, and the rights,
duties and immunities of the Trustee.
It is the intention of the Transferor, the Depositor and the Investor
Certificateholders that the Investor Certificates will be indebtedness for
federal, state and local income and franchise tax purposes and for purposes of
any other tax imposed on or measured by income. The Depositor, the Trustee and
the Holder of this Certificate for Certificate Owner) by acceptance of this
Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest herein) agrees to
treat the Investor Certificates (or beneficial interest therein), for purposes
of federal, state and local income or franchise taxes and any other tax
imposed on or measured by income, as indebtedness secured by the Trust Assets
and to report the transactions contemplated by the Agreement on all applicable
tax returns in a manner consistent with such treatment. Each Holder of this
Certificate agrees that it will cause any Certificate Owner acquiring an
interest in this Certificate through it to comply with the Agreement as to
treatment as indebtedness for federal, state and local income and franchise
tax purposes and for purposes of any other tax imposed on or measured by
income.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Sponsor, the Master Servicer, the Depositor and the Trustee, and the rights of
the Certificateholders under the Agreement, at any time by the Sponsor, the
Master Servicer, the Depositor and the Trustee with the consent (i) of the
Holders of Investor Certificates evidencing Percentage Interests aggregating
not less than 51% and (ii) of the Credit Enhancer. 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 herefor 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 Investor Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Certificate
Registrar for such purpose, accompanied by a written instrument of transfer in
form satisfactory to the Master Servicer, 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
authorized denominations, if applicable, and evidencing the same aggregate
Percentage Interest 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 a like tenor in authorized
denominations (in the case of the Investor Certificates) 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 or the Certificate Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Sponsor, the Master Servicer, the Depositor, the Credit
Enhancer and the Certificate Registrar and any agent of the foregoing may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Trustee, the Sponsor, the Master
Servicer, the Depositor, the Credit Enhancer, the Certificate Registrar nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (i) payment in
full of all amounts owing to the Credit Enhancer and (ii) the earliest of (a)
the transfer, under the conditions specified in the Agreement, to the
Transferor (as defined in the Agreement) of the interest of the Holders of the
Investor Certificates in each Mortgage Loan and all property acquired in
respect of any Mortgage Loan remaining in the Trust, (b) the day following the
Distribution Date on which distributions reduce the Investor Certificate
Principal Balance to zero, (c) the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust and (d) the Distribution Date in
December 2024. The Transferor may effect an early retirement of the
Certificates by paying the retransfer price and accepting retransfer of the
Trust Assets pursuant to the terms of the Agreement on any Distribution Date
after the Investor Certificate Principal Balance is less than or equal to 10%
of the Original Investor Certificate Principal Balance; provided, however,
that in no event shall the Trust continue beyond the expiration of 21 years
from the death of certain person named in the Agreement. Upon retirement of
the Certificates in accordance with Section 10.01 of the Agreement, the
Trustee shall execute such documents and instruments of transfer presented by
the Transferor and take such other actions as the Transferor may reasonably
request to effect the retransfer of the Mortgage Loans to the Transferor.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual or facsimile signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Trustee on behalf of the Trust
By: ___________________________________
Certificate of Authentication:
This is one of the Investor
Certificates referenced in the
within-mentioned Agreement.
By: _________________________________
Authorized Officer
Exhibit B
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 6.05 OF THE AGREEMENT REFERRED TO HEREIN.
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, A PLAN SUBJECT TO
SECTION 4975 OF THE CODE AS AMENDED, OR A PERSON ACTING ON BEHALF OF OR USING
THE ASSETS OF ANY SUCH PLAN, OR THAT IF SUCH TRANSFEREE IS AN INSURANCE
COMPANY, THAT THE TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING THIS
CERTIFICATE 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 THIS CERTIFICATE
ARE COVERED UNDER SECTIONS I AND III OF PTCE 95-60; OR AN OPINION OF COUNSEL
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.05(d) 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.
Date of Pooling and Servicing
Agreement: : November 14, 1998
Cut-off Date : November 14, 1998
Percentage Interest : 100%
Certificate No. : ___:
First Distribution Date : January 15, 1999
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 1998-D
TRANSFEROR CERTIFICATE
evidencing a percentage interest in the distributions allocable
to the Transferor Certificates evidencing an undivided interest
in a Trust consisting primarily of a pool of adjustable rate
home equity revolving credit line mortgage loans sold by
CWABS, INC.
This Certificate does not represent an obligation of or interest in
CWABS, Inc. (the "Depositor"), Countrywide Home Loans, Inc. or the Trustee
referred to below or any of their affiliates. Neither this Certificate nor the
underlying Assets 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 in the entire
interest not allocated to the Investor Certificates in certain monthly
distributions with respect to a Trust consisting primarily of a pool of
mortgage loans (the "Mortgage Loans"), transferred by the Depositor and
serviced by Countrywide Home Loans, Inc. (in such capacity, the "Master
Servicer", including any successor Master Servicer under the Agreement
referred to below). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement") among the Depositor, the
Master Servicer, as sponsor and as master servicer (the "Sponsor" or the
"Master Servicer," as appropriate), and The First National Bank of Chicago, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, 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.
This Certificate is one of the Transferor Certificates from a duly
authorized issue of Certificates designated as Revolving Home Equity Loan Asset
Backed Certificates, Series 1998-D, representing, to the extent specified in the
Agreement, an undivided interest in: (i) each Mortgage Loan including its Asset
Balance (including all Additional Balances) and all collections in respect
thereof received after the Cut-off Date (excluding payments in respect of
accrued interest due on or prior to the Cut-off Date), (ii) property that
secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of
foreclosure, (iii) the Depositor's rights under the hazard insurance policies in
respect of the Mortgage Loans, (iv) an assignment of the Depositor's rights
under the purchase agreement dated as of November 14, 1998 between the Sponsor,
as seller, and the Depositor, as purchaser, and (v) certain other property
described in the Agreement (collectively, the "Trust Assets").
The certificates are limited in right of payment to certain payments on
and collections in respect of the Trust Assets, all as more specifically set
forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds available in
accordance with the terms of the Agreement for payment hereunder and that the
Trustee in its individual capacity is not personally 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 hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Sponsor, the Master Servicer, the Depositor and the Trustee, and the rights of
the Certificateholders under the Agreement, at any time by the Sponsor, the
Master Servicer, the Depositor and the Trustee with the consent (i) of the
Holders of Investor Certificates evidencing Percentage Interests aggregating
not less than 51% and (ii) of the Credit Enhancer. 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 hereof 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 Investor Certificates.
No transfer of this Transferor Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. There shall be delivered to the Trustee
either (i) an investment letter acceptable to and in form and substance
satisfactory to the Trustee certifying to the Trustee the facts surrounding
such transfer, which investment letter shall not be an expense of the Trustee,
or (ii) if such letter is not delivered, an Opinion of Counsel acceptable to
and in form and substance satisfactory to the Trustee and the Depositor that
such transfer is exempt (describing the applicable exemption and the basis
therefor) from or is being made pursuant to the registration requirements of
the Securities Act of 1933, as amended, which Opinion of Counsel shall not be
an expense of the Trustee. The Holder hereof desiring to effect such Transfer
shall, and does hereby agree to, indemnify the Transferor 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.
As provided in the Agreement and subject to certain limitations set forth
therein, and subject to the restrictions set forth on the first page hereof,
neither this Certificate nor any legal or beneficial interest herein may be,
directly or indirectly, purchased, transferred, sold, pledged, assigned or
otherwise disposed of, and any proposed transferee hereof shall not become the
registered Holder hereof, without the satisfaction of the conditions set forth
in Section 6.05 of the Agreement.
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 Trustee, the Master Servicer, the Depositor, the Credit Enhancer and
the Certificate Registrar and any agent of the foregoing may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Master Servicer, the Depositor, the
Credit Enhancer, the Certificate Registrar nor any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (i) payment in
full of all amounts owing to the Credit Enhancer and (ii) the earliest of (a)
the transfer, under the conditions specified in the Agreement, to the
Transferor (as defined in the Agreement) of the interest of the Holders of the
Investor Certificates in each Mortgage Loan and all property acquired in
respect of any Mortgage Loan remaining in the Trust, (b) the day following the
Distribution Date on which distributions reduce the Investor Certificate
Principal Balance to zero, (c) the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or (d) the Distribution Date in
December 2024. The Transferor may effect an early retirement of the
Certificates by paying the retransfer price and accepting retransfer of the
Trust Assets pursuant to the terms of the Agreement on any Distribution Date
after the Investor Certificate Principal Balance is less than or equal to 10%
of the Original Investor Certificate Principal Balance; provided, however,
that in no event shall the Trust continue beyond the expiration of 21 years
from the death of certain person named in the Agreement. Upon retirement of
the Certificates in accordance with Section 10.01 of the Agreement, the
Trustee shall execute such documents and instruments of transfer presented by
the Transferor and take such other actions as the Transferor may reasonably
request to effect the retransfer of the Mortgage Loans to the Transferor.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual or facsimile signature this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Trustee on behalf of the Trust
By: ____________________________________
Certificate of Authentication:
This is one of the Investor
Certificates referenced in the
within-mentioned Agreement.
By: _________________________________
Authorized Officer
EXHIBIT C
MORTGAGE LOAN SCHEDULE
[Delivered to Trustee Only]
Exhibit D
FORM OF CREDIT LINE AGREEMENT
Exhibit E
FORM OF LETTER OF REPRESENTATIONS
Exhibit F
FORM OF INVESTMENT LETTER [NON-RULE 144A]
FOR TRANSFEROR CERTIFICATES
Date:
CWABS, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: ________________
The First National Bank of Chicago
as Trustee
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxxxxx 00000
Attn: Corporate Trust Services Division
Re: CWABS, Inc.;
Countrywide Home Equity Loan Trust 1998-D,
Revolving Home Equity Loan Asset Backed Certificates,
Series 1998-D, Transferor Certificates
Ladies and Gentlemen:
In connection with our acquisition of Transferor Certificates in the
Denomination of ______________, we certify that (a) we understand that the
Transferor 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 Transferor Certificates,
(c) we have had the opportunity to ask questions of and receive answers from
the Depositor concerning the purchase of the Transferor Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferor 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, nor a plan subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such employee benefit plan, or (ii) if 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 PTCE 95-60, (e) we are acquiring the Transferor
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 Transferor Certificates in
accordance with clause (g) below), (f) we have not offered or sold any
Transferor Certificates to, or solicited offers to buy any Transferor
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 Transferor 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 Transferor 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 Transferor Certificate has
executed and delivered to you a certificate to substantially the same effect
as this certificate, and (3) the purchaser or transferee has otherwise
complied with any conditions for transfer set forth in the Pooling and
Servicing Agreement dated as of November 14, 1998 (the "Agreement"), among
CWABS, Inc. as Depositor, Countrywide Home Loans, Inc., as Master Servicer,
and The First National Bank of Chicago, as Trustee. All capitalized terms used
herein but not defined herein shall have the meanings assigned to them in the
Agreement.
Very truly yours,
-------------------------------------------
Name of Transferee
By: ______________________________
Name:
Title:
FORM OF INVESTMENT LETTER RULE 144A LETTER
FOR TRANSFEROR CERTIFICATES
Date:
CWABS, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: ________________
The First National Bank of Chicago
as Trustee
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxxxxx 00000
Attn: Corporate Trust Services Division
Re: CWABS, Inc.;
Countrywide Home Equity Loan Trust 1998-D,
Revolving Home Equity Loan Asset Backed Certificates,
Series 1998-D, Transferor Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Transferor Certificates,
we certify that (a) we understand that the Transferor 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 Transferor Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase of
the Transferor Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Transferor
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,
nor a plan subject to Section 4975 of the Internal Revenue Code of 1986, nor
are we acting on behalf of any such employee benefit plan, or (ii) if 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 PTCE 95-60, (e) we have not,
nor has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Transferor Certificates, any interest in the
Transferor Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Transferor Certificates, any interest in the Transferor Certificates or any
other similar security from, or otherwise approached or negotiated with
respect to the Transferor Certificates, any interest in the Transferor
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
Transferor Certificates under the Act or that would render the disposition of
the Transferor Certificates a violation of Section 5 of the 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 Transferor
Certificates and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the 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 Transferor Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Transferor
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 Act. All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as
of November 14, 1998 among CWABS, Inc. as Depositor, Countrywide Home Loans,
Inc., as Sponsor Master Servicer, and The First National Bank of Chicago, as
Trustee.
Name of Buyer
By: _______________________________
Name:
Title:
ANNEX 1 TO Exhibit F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE
[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 Transferor Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $ 1 in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A and (ii) the
Buyer satisfies the criteria in the category marked below.
_______________ Corporation, etc. The Buyer is a
corporation (other than a bank, savings
and loan association or similar
institution), Massachusetts or similar
business trust, partnership, or
charitable organization described in
Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
_______________ Bank. The Buyer (a) is a national bank
or banking institution organized under
the laws of any State, territory or the
District of Columbia, the business of
which is substantially confined to
banking and is supervised by the state
or territorial banking commission or
similar official or is a foreign bank or
equivalent institution, and (b) has an
audited net worth of at least
$25,000,000 as demonstrated in its
latest annual financial statements, a
copy of which is attached hereto.
______________ Savings and Loan. The Buyer (a) is a
savings and loan association, building
and loan association, cooperative bank,
homestead association or similar
institution, which is supervised and
examined by a State or Federal authority
having supervision over any such
institutions or is a foreign savings and
loan association or equivalent
institution and (b) has an audited net
worth of at least $25,000,000 as
demonstrated in its latest annual
financial statements, a copy of which is
attached hereto.
--------------------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
______________ Broker-dealer. The Buyer is a dealer
registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
______________ Insurance Company. The Buyer is an
insurance company whose primary and
predominant business activity is the
writing of insurance or the reinsuring
of risks underwritten by insurance
companies and which is subject to
supervision by the insurance
commissioner or a similar official or
agency of a State, territory or the
District of Columbia.
______________ State or Local Plan. The Buyer is a plan
established and maintained by a State,
its political subdivisions, or any
agency or instrumentality of the State
or its political subdivisions for the
benefit of its employees.
______________ ERISA Plan. The Buyer is an employee
benefit plan within the meaning of Title
I of the Employee Retirement Income
Security Act of 1974.
______________ Investment Advisor. The Buyer is an
investment advisor registered under the
Investment Advisors Act of 1940.
______________ Small Business Investment Company. The
Buyer is a small business investment
company licensed by the U.S. Small
Business Administration under Section
301(c) or (d) of the Small Business
Investment Act of 1958.
______________ Business Development Company. The Buyer
is a business development company as
defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
______________ Trust Fund. The Buyer is a trust fund
whose trustee is a bank or trust company
and whose participants are exclusively
State or Local Plans or ERISA Plans as
defined above, and no participant of the
Buyer is an individual retirement
account or an H.R. 10 (Xxxxx) plan.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part
of an unsold allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject
to a repurchase agreement and (vii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities Exchange Act
of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Transferor
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 Transferor 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 as provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
----------------------------------
Name of Buyer
By:
------------------------------
Name:
Title:
Date: ____________________________
ANNEX 2 TO Exhibit F
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 Transferor Certificates described therein:
7. 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.
8. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in 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).
9. 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).
10. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities
owned but subject to a repurchase agreement and (vi) currency, interest rate
and commodity swaps.
11. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
12. Until the date of purchase of the Transferor 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 Transferor Certificates will constitute a reaffirmation of
this certification by the undersigned as of the date of such purchase.
-------------------------------------
Name of Buyer
By:
----------------------------------
Name:
Title:
IF AN ADVISER:
--------------------------------------
Name of Advisor
Date:
Exhibit G
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
[DATE]
The First National Bank of Chicago
as Trustee
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxxxxx 00000
Attn: Corporate Trust Services Division
Re: CWABS, Inc. Revolving Home Equity Loan
Asset Backed Certificates, Series 1998-D
Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee under the Pooling and Servicing Agreement dated as of November 14,
1998, among CWABS, Inc. as Depositor, Countrywide Home Loans, Inc., as Sponsor
and Master Servicer, and you, as Trustee (the "Agreement"), we hereby request
a release of the Mortgage File held by you as Trustee with respect to the
following described Mortgage Loan for the reason indicated below.
Loan No.:
Reason for requesting file:
______________ 1. Mortgage Loan paid in full. (The Master
Servicer hereby certifies that all
amounts received in connection with the
payment in full of the Mortgage Loan
which are required to be deposited in the
Collection Account pursuant to Section
3.02 of the Agreement have been so
deposited).
______________ 2. Retransfer of Mortgage Loan. (The Master
Servicer hereby certifies that the
Transfer Deposit Amount has been
deposited in the Collection Account
pursuant to the Agreement).
______________ 3. The Mortgage Loan is being foreclosed.
______________ 4. The Mortgage Loan is being re-financed by
another depository institution. (The
Master Servicer hereby certifies that all
amounts received in connection with the
payment in full of the Mortgage Loan
which are required to be deposited in the
Collection Account pursuant to Section
3.02 of the Agreement have been so
deposited).
______________ 5. Other (Describe).
The undersigned acknowledges that the above Mortgage File will be held by
the undersigned in accordance with the provisions of the Agreement and will
promptly be returned to the Trustee when the need therefor by the Master
Servicer no longer exists unless the Mortgage Loan has been liquidated or
retransferred.
Capitalized terms used herein shall have the meanings ascribed to them in
the Agreement.
COUNTRYWIDE HOME LOANS, INC.
By:________________________________
Name:
Title: Servicing Officer
EXHIBIT H
FORM OF INITIAL CERTIFICATION
[date]
[Depositor]
[Master Servicer]
[Sponsor]
-----------------
-----------------
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Sponsor and Master
Servicer, and First National Bank of Chicago,
as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 1998-D
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan listed on the attached Document Exception Report) it has
received:
(i) the original Mortgage Note endorsed in blank; and
(ii) an original Assignment of Mortgage in blank in recordable form.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
First National Bank of Chicago,
as Trustee
By:____________________________
Name:
Title:
EXHIBIT I
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Sponsor]
------------------
------------------
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Sponsor and Master
Servicer, and First National Bank of Chicago,
as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 1998-D
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached Document Exception Report) it has received:
(i) the original Mortgage Note endorsed in blank;
(ii) an original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage or, if, in connection with any
Mortgage Loan, the original recorded Mortgage with evidence of recording
thereon cannot be delivered on or prior to the Closing Date because of a delay
caused by the public recording office where such original Mortgage has been
delivered for recordation or because such original Mortgage has been lost, the
Sponsor, at the direction of the Depositor, shall deliver or cause to be
delivered to the Custodian, as agent for the Trustee, a true and correct copy
of such Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the Depositor stating
that such original Mortgage has been dispatched to the appropriate public
recording official or (ii) in the case of an original Mortgage that has been
lost, a certificate by the appropriate county recording office where such
Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if any
("Intervening Assignments"), with evidence of recording thereon, showing a
complete chain of title to the Mortgage from the originator to the Depositor
or, if any such original Intervening Assignment has not been returned from the
applicable recording office or has been lost, a true and correct copy thereof,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Sponsor stating that such original
Intervening Assignment has been dispatched to the appropriate public recording
official for recordation or (ii) in the case of an original Intervening
Assignment that has been lost, a certificate by the appropriate county
recording office where such Mortgage is recorded;
(v) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(vi) the original of any guaranty executed in connection with the
Mortgage Note;
(vii) the original of each assumption, modification, consolidation
or substitution agreement, if any, relating to the Mortgage Loan; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(iv), (v), and (vi) 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
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
First National Bank of Chicago,
as Trustee
By:_______________________________
Name:
Title:
