EXHIBIT 4
Pooling and Servicing Agreement
CHASE MORTGAGE FINANCE CORPORATION,
DEPOSITOR,
CHASE MANHATTAN MORTGAGE CORPORATION,
MASTER SERVICER,
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.,
SERVICER,
AND
CITIBANK, N.A.,
TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2001
$250,041,132.13
Multi-Class Mortgage Pass-Through Certificates
Series 2001-S7
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TRUST FUND..................................................39
Section 2.01. Conveyance of Mortgage Loans. ...................................................39
Section 2.02. Acceptance by Trustee............................................................43
Section 2.03. Trust Fund; Authentication of Certificates.......................................44
Section 2.04. REMIC Elections..................................................................44
Section 2.05. Permitted Activities of Trust....................................................47
Section 2.06. Qualifying Special Purpose Entity................................................47
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE SERVICER; REPURCHASE OF
MORTGAGE LOANS............................................................................47
Section 3.01. Representations and Warranties of the Depositor with respect to the
Mortgage Loans...................................................................47
Section 3.02. Representations and Warranties of the Servicer...................................54
Section 3.03. Option to Substitute.............................................................54
ARTICLE IV THE CERTIFICATES..........................................................................55
Section 4.01. The Certificates.................................................................55
Section 4.02. Registration of Transfer and Exchange of Certificates............................58
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates................................61
Section 4.04. Persons Deemed Owners............................................................61
Section 4.05. Appointment of Paying Agent and Certificate Registrar; Certificate Account.......61
Section 4.06. Authenticating Agents............................................................62
ARTICLE V ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................................63
Section 5.01. Servicer to Service Mortgage Loans...............................................63
Section 5.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers; Enforcement
of Sub-Servicer's Obligations....................................................64
Section 5.03. Successor Sub-Servicers..........................................................64
Section 5.04. Liability of the Servicer........................................................65
Section 5.05. No Contractual Relationship Between Sub-Servicer and Trustee or
Certificateholders...............................................................65
Section 5.06. Termination of Sub-Servicing Agreement...........................................65
Section 5.07. Collection of Mortgage Loan Payments.............................................65
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Section 5.08. Establishment of Collection Accounts; Deposit in Collection Account..............65
Section 5.09. Permitted Withdrawals from the Collection Accounts...............................67
Section 5.10. Establishment of Escrow Account; Deposits in Escrow Account......................67
Section 5.11. Permitted Withdrawals from Escrow Account........................................68
Section 5.12. Payment of Taxes, Insurance and Other Charges....................................68
Section 5.13. Transfer of Accounts.............................................................68
Section 5.14. [Reserved].......................................................................68
Section 5.15. Maintenance of the Primary Insurance Policies....................................68
Section 5.16. Maintenance of Standard Hazard Policies..........................................69
Section 5.17. [Reserved].......................................................................70
Section 5.18. [Reserved].......................................................................70
Section 5.19. Fidelity Bond and Errors and Omissions Insurance.................................70
Section 5.20. Collections under Insurance Policies; Enforcement of Due-On-Sale Clauses;
Assumption Agreements............................................................70
Section 5.21. Income and Realization from Defaulted Mortgage Loans.............................71
Section 5.22. Trustee to Cooperate; Release of Mortgage Files..................................72
Section 5.23. Servicing and Other Compensation.................................................73
Section 5.24. 1934 Act Reports.................................................................73
Section 5.25. Annual Statement as to Compliance................................................73
Section 5.26. Annual Independent Public Accountants' Servicing Report..........................74
Section 5.27. Access to Certain Documentation; Rights of the Depositor in Respect of
the Servicer.....................................................................74
Section 5.28. REMIC-Related Covenants..........................................................74
ARTICLE VI PAYMENTS TO THE CERTIFICATEHOLDERS........................................................76
Section 6.01. Distributions....................................................................76
Section 6.02. Statements to the Certificateholders.............................................81
Section 6.03. Advances by the Servicer.........................................................83
Section 6.04. Allocation of Realized Losses....................................................84
Section 6.05. Compensating Interest; Allocation of Certain Interest Shortfalls.................85
Section 6.06. Subordination....................................................................86
Section 6.07. Determination of LIBOR...........................................................86
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VII REPORTS TO BE PREPARED BY THE MASTER SERVICER.............................................87
Section 7.01. Master Servicer and the Servicer Shall Provide Information as Reasonably
Required.........................................................................87
Section 7.02. Federal Information Returns and Reports to Certificateholders....................87
ARTICLE VIII THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER.......................................88
Section 8.01. Indemnification; Third Party Claims..............................................88
Section 8.02. Merger or Consolidation of the Depositor, the Servicer or the Master
Servicer.........................................................................88
Section 8.03. Limitation on Liability of the Depositor, the Servicer, the Master
Servicer the Trustee and Others..................................................89
Section 8.04. Depositor, Servicer and Master Servicer Not to Resign............................89
Section 8.05. Successor to the Servicer........................................................90
Section 8.06. Maintenance of Ratings...........................................................91
Section 8.07. Compensation of the Master Servicer..............................................91
Section 8.08. Certain Matters Affecting the Master Servicer....................................91
ARTICLE IX DEFAULT...................................................................................91
Section 9.01. Events of Default................................................................91
Section 9.02. Waiver of Defaults...............................................................93
Section 9.03. Trustee to Act; Appointment of Successor.........................................93
Section 9.04. Notification to Certificateholders and the Rating Agencies.......................93
ARTICLE X CONCERNING THE TRUSTEE....................................................................93
Section 10.01. Duties of Trustee................................................................93
Section 10.02. Certain Matters Affecting the Trustee............................................94
Section 10.03. Trustee Not Liable for Certificates or Mortgage Loans............................95
Section 10.04. Trustee May Own Certificates.....................................................95
Section 10.05. Fees and Expenses................................................................95
Section 10.06. Eligibility Requirements for Trustee.............................................95
Section 10.07. Resignation and Removal of the Trustee...........................................96
Section 10.08. Successor Trustee................................................................96
Section 10.09. Merger or Consolidation of Trustee...............................................97
Section 10.10. Appointment of Co-Trustee or Separate Trustee....................................97
Section 10.11. Appointment of Office or Agency..................................................98
ARTICLE XI TERMINATION...............................................................................98
Section 11.01. Termination......................................................................98
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ARTICLE XII MISCELLANEOUS PROVISIONS..................................................................99
Section 12.01. Severability of Provisions.......................................................99
Section 12.02. Limitation on Rights of Certificateholders......................................100
Section 12.03. Amendment.......................................................................100
Section 12.04. Counterparts....................................................................101
Section 12.05. Duration of Agreement...........................................................101
Section 12.06. Governing Law...................................................................101
Section 12.07. Notices.........................................................................101
Section 12.08. Further Assurances..............................................................101
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF MORTGAGE FILE
EXHIBIT C FORM OF CLASS A CERTIFICATES
EXHIBIT D FORM OF CLASS M CERTIFICATE
EXHIBIT E FORM OF CLASS B CERTIFICATES
EXHIBIT F FORM OF CLASS A-R CERTIFICATE
EXHIBIT G FORM OF TRUSTEE CERTIFICATION
EXHIBIT H FORM OF INVESTMENT LETTER
EXHIBIT I FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT J RESERVED
EXHIBIT K FORM OF CLASS A-R TRANSFEREE LETTER
EXHIBIT L REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT M FORM OF ERISA REPRESENTATION
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This Pooling and Servicing Agreement, dated as of November 1, 2001, is
executed among Chase Mortgage Finance Corporation, as depositor (together with
its permitted successors and assigns, the "Depositor"), Chase Manhattan Mortgage
Corporation, as master servicer (together with its permitted successors and
assigns, the "Master Servicer"), Washington Mutual Mortgage Securities Corp., as
servicer (together with its permitted successors and assigns, the "Servicer")
and Citibank, N.A., as trustee (together with its permitted successors and
assigns, the "Trustee").
In consideration of the premises and the mutual agreements hereinafter
set forth, the Depositor, the Servicer, the Master Servicer and the Trustee
agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) is located, and
which are in accordance with FNMA servicing practices and procedures for MBS
pool mortgages as defined in the FNMA Guides including future updates.
ADJUSTED LOCK-OUT PERCENTAGE: Equals (i) for any Distribution Date
prior to the Distribution Date in December 2006, 0% and (ii) for any
Distribution Date on or after the Distribution Date in December 2006, the
Lock-out Percentage.
ADVANCE: The aggregate of the advances made by the Servicer with
respect to a particular Distribution Date pursuant to Section 6.03.
AFFILIATE: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
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 the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AGENCY & TRUST OFFICE: The principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of execution of this instrument is located at 000 Xxxx
Xxxxxx, 00xx Floor/Zone 3, Xxx Xxxx, Xxx Xxxx 00000.
AGGREGATE CLASS A INTEREST ACCRUAL AMOUNT: On any Distribution Date, an
amount equal to the sum of the Class A-1 Interest Accrual Amount, the Class A-2
Interest Accrual Amount, the Class A-3 Interest Accrual Amount, the Class A-4
Interest Accrual Amount, the Class A-5 Interest Accrual Amount, the Class A-6
Interest Accrual Amount, the Class A-7 Interest Accrual Amount, the Class A-8
Interest Accrual Amount, the Class A-9 Interest Accrual Amount, the Class A-R
Interest Accrual Amount and the Class A-X Interest Accrual Amount.
AGGREGATE CLASS A INTEREST SHORTFALL: On any Distribution Date, an
amount equal to the sum of the Class A-1 Shortfall, the Class A-2 Shortfall, the
Class A-3 Shortfall, the Class A-4 Shortfall, the Class A-5 Shortfall, the Class
A-6 Shortfall, the Class A-7 Shortfall, the Class A-8 Shortfall, the Class A-9
Shortfall, the Class A-R Shortfall and the Class A-X Shortfall.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
APPRAISED VALUE: The value set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property (or related residential dwelling unit in the Underlying Mortgaged
Property, in the case of a Co-op Loan).
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer or equivalent instrument (or UCC-3 assignment or equivalent instrument
with respect to each Co-op Loan), in recordable form (except in the case of a
Co-op Loan), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
AUTHENTICATING AGENT: The meaning specified in Section 4.06.
AVAILABLE DISTRIBUTION AMOUNT: On any Distribution Date, an amount
equal to the amount on deposit in the Collection Account as of the close of
business on the related Determination Dated except:
(a) amounts received on particular Mortgage Loans as late payments or
other recoveries of principal or interest (including Liquidation Proceeds,
Insurance Proceeds and condemnation awards) and respecting which the Servicer
previously made an unreimbursed Advance of such amounts;
(b) reimbursement for Nonrecoverable Advances and other amounts
permitted to be withdrawn by the Servicer pursuant to Section 5.09 from, or not
required to be deposited in, the Collection Account;
(c) amounts representing the Servicing Fee with respect to such
Distribution Date;
(d) amounts representing all or part of a Monthly Payment due (i) after
the related Due Period or (ii) on or prior to the Cut-off Date;
(e) all Repurchase Proceeds, Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and condemnation awards with respect to Mortgage
Loans received after the related Principal Prepayment Period, and all related
payments of interest representing interest for any period of time after the last
day of the related Due Period for such Mortgage Loans; and
(f) all income from Eligible Investments held in the Collection Account
for the account of the Servicer.
AVERAGE STRIPPED INTEREST RATE: The average of the Stripped Interest
Rates on the Non-Discount Mortgage Loans, weighted on the basis of the Scheduled
Principal Balances of the Non-Discount Mortgage Loans.
BANKRUPTCY AMOUNT: As of any date of determination, $100,000.00 minus
all Bankruptcy Losses on the Mortgage Loans, if any, previously allocated to the
Certificates in accordance with Section 6.04.
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BANKRUPTCY CODE: Title 11 of the United States Code, as the same may be
amended from time to time.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a Participant or an Indirect Participant or
a Person holding a beneficial interest in any Definitive Certificate.
BOOK-ENTRY CERTIFICATES: The Class A Certificates (other than the Class
A-R Certificate), Class M Certificates, Class B-1 Certificates and Class B-2
Certificates, referred to collectively.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, (b) a legal
holiday in the State of New York or the State of Illinois or (c) a day on which
banking institutions in the State of New York or the State of Illinois are
authorized or obligated by law or executive order to be closed.
CARRY-OVER SUBORDINATED PRINCIPAL AMOUNT: As of any Distribution Date,
with respect to any Class of Subordinated Certificates, an amount, if any, equal
to the amount of principal distributable to such Class on any prior Distribution
Date that has not been so distributed.
CASH LIQUIDATION: Recovery of all cash proceeds by the Servicer with
respect to the liquidation of any Mortgage Loan, including Insurance Proceeds
and other payments or recoveries (whether made at one time or over a period of
time) which the Servicer deems to be finally recoverable, in connection with the
sale, assignment or satisfaction of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, but only if title to the related Mortgaged
Property was not acquired by foreclosure or deed in lieu of foreclosure by the
Servicer pursuant to Section 5.21.
CERTIFICATE: Any Class A, Class M or Class B Certificate.
CERTIFICATE ACCOUNT: The account created and maintained pursuant to
Section 4.05.
CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Master Servicer, the
Servicer, any Subservicer, or any of their respective Affiliates shall be
disregarded and the undivided 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, waiver, request or demand has
been obtained. The Trustee shall be entitled to conclusively rely upon the
certificate of the Depositor, the Master Servicer or the Servicer as to the
determination of which Certificates are registered in the name of such
Affiliates.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Book-Entry Certificate registered in the name of the Depository or its nominee.
CERTIFICATE RATE: The per annum rate of interest borne by each Class of
Certificates (other than the Class A-P Certificates), which rate shall equal (i)
6.00% with respect to the Class A-5 Certificates, (ii) 6.25% with respect to the
Class A-4 Certificates and (iii) 6.50% with respect to the Class X-0, Xxxxx X-0,
Class A-6, Class A-7, Class A-8, Class A-X, Class A-R, Class M, Class B-1, Class
B-2, Class B-3, Class B-4 and Class B-5 Certificates (in the case of each Class
of Certificates), other than the Class A-6 and Class A-X Certificates, on the
Outstanding Certificate Principal Balance of such Class and, in the case of the
Class A-6 and Class A-X Certificates, on the Class A-6 Notional Amount and the
Class A-X Notional Amount, respectively. In the case of the Class A-1
Certificates, the Certificate Rate with respect to the first Distribution Date
will be 2.58125%, and as to any Distribution Date thereafter, the Certificate
Rate on the Class A-1 Certificates will equal the lesser of (A) 0.50% plus LIBOR
and (B) 8.50%. In the case of the Class A-9 Certificates, the Certificate Rate
with respect to the first Distribution Date will be 5.91875%, and as to any
Distribution Date thereafter, the Certificate Rate on the Class A-9 Certificates
will equal 8.00% minus LIBOR, but not less than 0.00%. Interest with respect to
each Class of Certificates (other than the Class A-P Certificates) at the
Certificate Rate shall be calculated based on a year of 360 days comprised of
twelve 30-day months.
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CERTIFICATE REGISTER: The register maintained pursuant to Section 4.02.
CERTIFICATE REGISTRAR: The Person appointed by the Trustee as
Certificate Registrar pursuant to Section 4.05.
CHASE: JPMorgan Chase Bank, a New York State banking corporation, or
its successor in interest.
CLASS: Pertaining to the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-R, Class A-P,
Class A-X, Class M, Class B-1, Class B-2, Class B-3, Class B-4 or Class B-5
Certificates, as the case may be.
CLASS A, CLASS M OR CLAS B: Pertaining to Class A Certificates, Class M
Certificates or Class B Certificates, as the case may be.
CLASS A-P AMOUNT: With respect to any Distribution Date, the applicable
PO Percentage of (i) all principal received on or in respect of each Discount
Mortgage Loan (exclusive of any amounts in respect of any Monthly Payment)
during the related Principal Prepayment Period and (ii) all principal received
as part of a Monthly Payment on or in respect of a Discount Mortgage Loan during
the related Due Period.
CLASS A CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-P, Class A-R and
Class A-X Certificates, referred to collectively.
CLASS A, CLASS M OR CLASS B: Pertaining to Class A Certificates, Class
M Certificates or Class B Certificates, as the case may be.
CLASS A-1 CERTIFICATE: Any one of the Class A-1 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-2 CERTIFICATE: Any one of the Class A-2 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-3 CERTIFICATE: Any one of the Class A-3 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
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CLASS A-4 CERTIFICATE: Any one of the Class A-4 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-5 CERTIFICATE: Any one of the Class A-5 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-6 CERTIFICATE: Any one of the Class A-6 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-7 CERTIFICATE: Any one of the Class A-7 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-8 CERTIFICATE: Any one of the Class A-8 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-9 CERTIFICATE: Any one of the Class A-9 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-P CERTIFICATE: Any one of the Class A-P Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-R CERTIFICATE: The Class A-R Certificate executed by the
Depositor and authenticated by the Trustee, which represents the Master Residual
Interest and the Subsidary Residual Interest, substantially in the form of the
Class A-R Certificate set forth in Exhibit F hereto.
CLASS A-X CERTIFICATE: Any one of the Class A-X Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-1 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-1 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS A-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-2 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-2 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS A-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-3 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-3 Certificates on such Distribution
Date pursuant to Section 6.05(c).
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CLASS A-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-4 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-4 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS A-5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-5 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-5 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS A-6 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class A-6 Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class A-6
Certificates on such Distribution Date pursuant to Section 6.05(b) and (ii) any
Realized Loss Interest Shortfall allocated to the Class A-6 Certificates on such
Distribution Date pursuant to Section 6.05(c).
CLASS A-7 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-7 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-7 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-7 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS A-8 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-8 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-8 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-8 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS A-9 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class A-9 Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class A-9
Certificates on such Distribution Date pursuant to Section 6.05(b) and (ii) any
Realized Loss Interest Shortfall allocated to the Class A-9 Certificates on such
Distribution Date pursuant to Section 6.05(c).
CLASS A-R INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-R Certificate minus (i) any
Compensating Interest Shortfall allocated to the Class A-R Certificate on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class A-R Certificate on such Distribution
Date pursuant to Section 6.05(c).
CLASS A-X INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class A-X Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class A-X
Certificates on such Distribution Date pursuant to Section 6.05(b) and (ii) any
Realized Loss Interest Shortfall allocated to the Class A-X Certificates on such
Distribution Date pursuant to Section 6.05(c).
6
CLASS A-6 NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the product of (x) 1/26 and (y) the Outstanding Certificate
Principal Balance of the Class A-4 Certificates (prior to giving effect to
distributions made on such Distribution Date).
CLASS A-9 NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the Outstanding Certificate Principal Balance of the Class A-1
Certificates (prior to giving effect to the distributions made on such
Distribution Date).
CLASS A-X NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the product of the aggregate Scheduled Principal Balance of the
Non-Discount Mortgage Loans and a fraction, the numerator of which is the
Average Stripped Interest Rate and the denominator of which is the Remittance
Rate.
CLASS A PERCENTAGE: As of any Distribution Date, the percentage
obtained by dividing the Class A Principal Balance by the Mortgage Pool
Principal Balance, but not more than 100%.
CLASS A PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class A
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class A Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class A Certificates pursuant to Section 6.04); provided that
the Class A Principal Balance on the first Distribution Date shall be the
Original Class A Principal Balance.
CLASS A-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-1 Interest Accrual Amount over the
amount actually distributed to the Class A-1 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(A).
CLASS A-2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-2 Interest Accrual Amount over the
amount actually distributed to the Class A-2 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(B).
CLASS A-3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-3 Interest Accrual Amount over the
amount actually distributed to the Class A-3 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(C).
CLASS A-4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-4 Interest Accrual Amount over the
amount actually distributed to the Class A-4 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(D).
CLASS A-5 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-5 Interest Accrual Amount over the
amount actually distributed to the Class A-5 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(E).
CLASS A-6 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-6 Interest Accrual Amount over the
amount actually distributed to the Class A-6 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(F).
CLASS A-7 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-7 Interest Accrual Amount over the
amount actually distributed to the Class A-7 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(G).
7
CLASS A-8 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-8 Interest Accrual Amount over the
amount actually distributed to the Class A-8 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(H).
CLASS A-9 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-9 Interest Accrual Amount over the
amount actually distributed to the Class A-9 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(I).
CLASS A-R SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-R Interest Accrual Amount over the
amount actually distributed to the Class A-R Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(J).
CLASS A-X SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-X Interest Accrual Amount over the
amount actually distributed to the Class A-X Certificates on such Distribution
Date pursuant to Section 6.01(b)(i)(K).
CLASS A-P SHORTFALL AMOUNT: With respect to any Distribution Date prior
to and including the Credit Support Depletion Date, to the extent of amounts
available to pay the Subordinated Optimal Principal Amount (without regard to
clause (b)(2) of the definition of such term), an amount equal to the sum of (i)
the applicable PO Percentage of the principal portion of any Realized Loss
(other than an Excess Loss) with respect to a Discount Mortgage Loan and (ii)
the sum of amounts, if any, by which the amounts specified in clause (i) with
respect to each prior Distribution Date exceeded the amount actually distributed
in respect thereof on such prior Distribution Date and not subsequently
distributed to the Class A-P Certificateholders.
CLASS B CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates, eferred to collectively.
CLASS B-1 CERTIFICATE: Any one of the Class B-1 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A and Class M Certificates, substantially in the form of
the Class B Certificate set forth in Exhibit E hereto.
CLASS B-2 CERTIFICATE: Any one of the Class B-2 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M and Class B-1 Certificates, substantially in the
form of the Class B Certificate set forth in Exhibit E hereto.
CLASS B-3 CERTIFICATE: Any one of the Class B-3 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1 and Class B-2 Certificates,
substantially in the form of the Class B Certificate set forth in Exhibit E
hereto.
CLASS B-4 CERTIFICATE: Any one of the Class B-4 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1, Class B-2 and Class B-3
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
CLASS B-5 CERTIFICATE: Any one of the Class B-5 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
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CLASS B-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-1 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class B-1 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS B-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-2 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class B-2 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS B-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-3 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class B-3 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS B-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-4 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class B-4 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS B-5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-5 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall allocated to the Class B-5 Certificates on such Distribution
Date pursuant to Section 6.05(c).
CLASS B-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-1 Interest Accrual Amount over the
amount actually distributed to the Class B-1 Certificates on such Distribution
Date pursuant to Section 6.01(d)(i)(1) (A) and (B).
CLASS B-2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-2 Interest Accrual Amount over the
amount actually distributed to the Class B-2 Certificates on such Distribution
Date pursuant to Section 6.01(d)(i)(2) (A) and (B).
CLASS B-3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-3 Interest Accrual Amount over the
amount actually distributed to the Class B-3 Certificates on such Distribution
Date pursuant to Section 6.01(d)(i)(3) (A) and (B).
CLASS B-4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-4 Interest Accrual Amount over the
amount actually distributed to the Class B-4 Certificates on such Distribution
Date pursuant to Section 6.01(d)(i)(4) (A) and (B).
CLASS B-5 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-5 Interest Accrual Amount over the
amount actually distributed to the Class B-5 Certificates on such Distribution
Date pursuant to Section 6.01(d)(i)(5) (A) and (B).
CLASS B PERCENTAGE: As of any Distribution Date, the difference between
100% and the sum of (i) the Class A Percentage and (ii) the Class M Percentage
for such Distribution Date.
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CLASS B PRINCIPAL BALANCE: As of any Distribution Date, the excess of
the Mortgage Pool Principal Balance (together with the principal portion of any
Monthly Payment due but not paid with respect to which an Advance has not been
made) over the sum of (i) the Class A Principal Balance and (ii) the Class M
Principal Balance.
CLASS M CERTIFICATE: Any one of the Class M Certificates executed by
the Depositor and authenticated by the Trustee, subordinated in right of payment
to the Class A Certificates, substantially in the form of the Class M
Certificate set forth in Exhibit D hereto.
CLASS M INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one (1) month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class M Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class M Certificates on such Distribution
Date pursuant to Section 6.05(b) and (ii) any Realized Loss Interest Shortfall
allocated to the Class M Certificates on such Distribution Date pursuant to
Section 6.05(c).
CLASS M PERCENTAGE: As of any Distribution Date, the percentage
obtained by dividing the Class M Principal Balance by the Mortgage Pool
Principal Balance, but not more than 100%; provided, however, that on any
Distribution Date on which the Class B Percentage equals 0%, the Class M
Percentage shall equal 100% minus the Class A Percentage.
CLASS M PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class M
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class M Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class M Certificates pursuant to Section 6.04); provided that
the Class M Principal Balance on the first Distribution Date shall be the
Original Class M Principal Balance, and provided further that if the aggregate
Outstanding Certificate Principal Balance of the Class B Certificates has been
reduced to zero, as of any Distribution Date, the Class M Principal Balance will
equal the excess of the Mortgage Pool Principal Balance (together with the
portion of any Monthly Payment due but not paid with respect to which an Advance
has not been made) over the Class A Principal Balance.
CLASS M SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class M Interest Accrual Amount over the
amount actually distributed to the Class M Certificateholders on such
Distribution Date pursuant to Section 6.01(c)(i) (A) and (B).
CLOSING DATE: November 28, 2001.
CMMC: Chase Manhattan Mortgage Corporation, a New Jersey corporation,
or its successor in interest.
CODE: The Internal Revenue Code of 1986, as amended from time to time,
and any successor statutes thereto, and applicable U.S. Department of Treasury
temporary or final regulations promulgated thereunder.
COLLECTION ACCOUNT: The account created and maintained pursuant to
Section 5.08.
COMPENSATING INTEREST: The meaning specified in Section 6.05(a).
COMPENSATING INTEREST SHORTFALL: The meaning specified in Section
6.05(b).
CO-OP LEASE: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
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CO-OP LOAN: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
CREDIT SUPPORT: With respect to each Class of Subordinated Certificates
(other than the Class B-5 Certificates), the level of credit support supporting
such Class, expressed as a percentage of the aggregate Outstanding Certificate
Principal Balance of all Classes of Certificates (other than the Class A-P
Certificates). With respect to each Distribution Date, Credit Support for each
such Class will equal in each case the percentage, rounded to two decimal
places, obtained by dividing the aggregate Outstanding Certificate Principal
Balances immediately prior to such Distribution Date of all Classes of
Subordinated Certificates having higher numerical class designations than such
Class (for this purpose, the Class M Certificates shall be deemed to have a
lower numerical class designation than each Class of Class B Certificates) by
the aggregate Outstanding Certificate Principal Balance of all Classes of
Certificates (other than the Class A-P Certificates) immediately prior to such
Distribution Date.
CREDIT SUPPORT DEPLETION DATE: The first Distribution Date on which the
aggregate Outstanding Certificate Principal Balance of the Subordinated
Certificates has been or will be reduced to zero.
CURTAILMENT: Any Principal Prepayment which is not a Payoff.
CUT-OFF DATE: November 1, 2001.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, other than such a
reduction resulting from a Deficient Valuation.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: The Certificates referred to in Section
4.01(c).
DEPOSITOR: Chase Mortgage Finance Corporation, a Delaware corporation,
or its successor in interest or any successor under this Agreement appointed as
herein provided.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co.
DEPOSITORY AGREEMENT: The agreement referred to in Section 4.01(b).
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: The sixteenth day of the month in which the related
Distribution Date occurs (or, if such sixteenth day is not a Business Day, the
preceding Business Day).
DISCOUNT MORTGAGE LOAN: Any Mortgage Loan having a Net Mortgage Rate
less than the Remittance Rate.
DISQUALIFIED ORGANIZATION: An organization referred to in Section
860E(e)(5) of the Code.
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DISTRIBUTION DATE: The 25th day of any month, or if such 25th day is
not a Business Day, the first Business Day immediately following, beginning with
December 26, 2001.
DUE DATE: The first day of each month, being the day of the month on
which each Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the month preceding the month in which such Distribution Date
occurs through the first day of the month in which such Distribution Date
occurs.
ELIGIBLE ACCOUNT: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a national bank or banking corporation
which (a) has a rating of at least Baa3 or P-3 by Xxxxx'x and (b) is either
Chase or is the corporate trust department of a national bank or banking
corporation which has a rating of at least A- or F1 by Fitch, or (iii) an
account or accounts the deposits in which are fully insured by the FDIC, or (iv)
an account or accounts in a depository institution in which such accounts are
insured by the FDIC (to the limit established by the FDIC), the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an
Opinion of Counsel delivered to and acceptable to the Trustee and each Rating
Agency, the Certificateholders have a claim with respect to the funds in such
account and a perfected first security interest against any collateral (which
shall be limited to Eligible Investments) securing such funds that is superior
to claims of any other depositors or creditors of the depository institution
with which such account is maintained, provided, however, that such uninsured
deposits do not result in the reduction of the ratings assigned to the
Certificates by the Rating Agencies as evidenced by a letter from each Rating
Agency or (v) otherwise acceptable to each Rating Agency without reduction or
withdrawal of the rating of any Class of Certificates, as evidenced by a letter
from each Rating Agency.
ELIGIBLE INVESTMENTS: One or more of the following:
(i) obligations of, or guaranteed as to principal and interest
by, the United States or obligations of any agency or
instrumentality thereof when such obligations are backed by
the full faith and credit of the United States; provided
that any such obligation held as a "cash flow investment"
within the meaning of section 860G(a)(6) of the Code shall
not have a remaining maturity of more than 45 days;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than two months from the date of
acquisition thereof, provided that the long-term unsecured
obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency
with its highest rating and the short-term debt obligations
of the party agreeing to repurchase are rated with one of
the two highest ratings by S&P or Xxxxx'x;
(iii) federal funds, certificates of deposit, time deposits and
bankers' acceptances (other than bankers' acceptances
issued by Chase or any of its Affiliates) (which shall each
have an original maturity of not more than 60 days and, in
the case of bankers' acceptances, shall in no event have an
original maturity of more than 365 days) of any United
States depository institution or trust company incorporated
under the laws of the United States or any state, provided
that the long-term unsecured debt obligations of such
depository institution or trust company at the date of
acquisition thereof have been rated by each Rating Agency
with its highest rating and the short-term obligations of
such depository institution or trust company are rated A-1+
by S&P and P-1 by Xxxxx'x;
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(iv) commercial paper (other than commercial paper issued by
Chase or any of its Affiliates) (having original maturities
of not more than 365 days) of any corporation 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 its highest short-term unsecured
commercial paper rating category; provided that such
commercial paper shall have a remaining maturity of not
more than 45 days;
(v) units of taxable money market funds (including those for
which the Trustee or the Servicer or any Affiliate thereof
receives compensation with respect to such investment)
which may be 12b-1 funds, as contemplated under the rules
promulgated by the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and which
funds have been rated by each Rating Agency in its highest
rating category or which have been designated in writing by
each Rating Agency as Eligible Investments with respect to
this definition;
(vi) other obligations or securities (other than investments or
obligations of Chase or any of its Affiliates) that are
"permitted investments" within the meaning of Section
860G(a)(5) of the Code and acceptable to each Rating Agency
rating the Certificates as an Eligible Investment hereunder
and will not result in a reduction or withdrawal in the
then current rating of any Class of Certificates, as
evidenced by a letter to such effect from each Rating
Agency and short term unsecured debt or deposits of the
obligor on such investments are rated A-1 by S&P and P-1 by
Xxxxx'x.
provided that no such instrument shall be an Eligible Investment if such
instrument evidences either (a) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (b) both principal and
interest payments derived from obligations underlying such instrument where the
interest and principal payments with respect to such instrument provide a yield
to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations; and provided further that no such instrument shall be
purchased above par.
ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Labor temporary or final regulations promulgated thereunder.
ERISA RESTRICTED CERTIFICATE: Any Class B-3, Class B-4 or Class B-5
Certificate or any other Certificate which at the date of determination is not
rated in one of the four highest generic rating categories by any Rating Agency.
ESCROW ACCOUNT: The account or accounts created and maintained pursuant
to Section 5.10.
ESCROW PAYMENTS: The amounts constituting applicable ground rents,
taxes, assessments, water rates, Standard Hazard Policy premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
a Mortgage Loan.
EVENT OF DEFAULT: Any of the events specified in Section 9.01.
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EXCEPTION REPORT: The report of the Trustee referred to in Section
2.02.
EXCESS BANKRUPTCY LOSS: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
EXCESS FRAUD LOSS: Any Fraud Loss, or portion thereof, which exceeds
the then applicable Fraud Loss Amount.
EXCESS LOSSES: Excess Bankruptcy Losses, Excess Fraud Losses and Excess
Special Hazard Losses, referred to collectively.
EXCESS PROCEEDS: All amounts (net of the related Servicing Advances)
received on any Mortgage Loan (whether as regular principal payments, Principal
Prepayments, Repurchase Proceeds, Liquidation Proceeds, Insurance Proceeds,
condemnation awards, or with respect to a disposition of a Mortgaged Property
which has been acquired by foreclosure or deed in lieu of foreclosure or
otherwise) in excess of the Principal Balance at the Cut-off Date of such
Mortgage Loan and accrued interest thereon at its Mortgage Rate to the Due Date
immediately succeeding the date of prepayment, repurchase or liquidation, as the
case may be.
EXCESS SPECIAL HAZARD LOSS: Any Special Hazard Loss, or portion
thereof, that exceeds the then applicable Special Hazard Amount.
FDIC: The Federal Deposit Insurance Corporation or any successor
organization.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
organization.
FIDELITY BOND: The fidelity bond and errors and omissions insurance
policies to be maintained by the Servicer pursuant to Section 5.19.
FITCH: Fitch, Inc. or its successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
organization.
FNMA GUIDES: The FNMA Sellers' Guide and the FNMA Servicers' Guide, and
all amendments or additions thereto.
FRAUD LOSS: Any Realized Loss or portion thereof sustained by reason of
a default arising from fraud, dishonesty or misrepresentation in connection with
the related Mortgage Loan, including by reason of the denial of coverage under
any related Primary Insurance Policy.
FRAUD LOSS AMOUNT: As of any date of determination after the Cut-off
Date, an amount equal to: (X) prior to the first anniversary of the Cut-off
Date, 2.00% (initially, $5,000,823.00) of the aggregate outstanding principal
balance of all of the Mortgage Loans as of the Cut-off Date minus the aggregate
amount of Fraud Loss on the Mortgage Loans allocated to the Certificates in
accordance with Section 6.04 since the Cut-off Date up to such date of
determination and (Y) from the first to the fifth anniversary of the Cut-off
Date, (1) 1.00% of the aggregate outstanding principal balance of all of the
Mortgage Loans as of the most recent anniversary of the Cut-off Date minus (2)
the Fraud Losses allocated to the Certificates in accordance with Section 6.04
since the most recent anniversary of the Cut-off Date up to such date of
determination. On and after the fifth anniversary of the Cut-off Date, the Fraud
Loss Amount shall be zero.
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INDIRECT PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant, either directly or indirectly.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan, net of costs of collecting such
proceeds and net of amounts released to the Mortgagor or applied to the
restoration of the Mortgaged Property.
INSURED EXPENSES: Expenses covered by any insurance policy.
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date and any
Class of Certificates (other than the Class A-1, Class A-9 and Class A-P
Certificates), the calendar month immediately preceding the month in which the
related Distribution Date occurs. With respect to any Distribution Date and the
Class A-1 and Class A-9 Certificates, the thirty day period, from and including
the 25th day of the month immediately preceding the month in which such
Distribution Date occurs to but excluding the 25th day of the month in which
such Distribution Date occurs, and with respect to the first Distribution Date,
from and including November 25, 2001 to but excluding December 25, 2001.
LATE COLLECTIONS: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, or with
respect to a disposition of a Mortgaged Property which has been acquired by
foreclosure or deed in lieu of foreclosure or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date and the Certificate Rates
on the Class A-1 and Class A-9 Certificates, LIBOR as determined in accordance
with Section 6.07.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
LIQUIDATED MORTGAGE LOAN: Any Mortgage Loan (a) as to which the
Servicer has determined that all amounts which it expects to recover from or on
account of such Mortgage Loan or property acquired in respect thereof have been
recovered, (b) as to which a Cash Liquidation has taken place or (c) with
respect to which the Mortgaged Property has been acquired by foreclosure or deed
in lieu of foreclosure and a disposition (the term disposition shall include,
for purposes of a repurchase pursuant to Section 11.01, any repurchase of a
Mortgaged Property pursuant to such Section) of such Mortgaged Property has
occurred.
LIQUIDATION EXPENSES: Expenses which are incurred by the Servicer or
any Subservicer in connection with the liquidation of any defaulted Mortgage
Loan or property acquired in respect thereof including, without limitation,
legal fees and expenses, any unreimbursed amount expended by the Servicer
pursuant to Sections 5.16 and 5.21 respecting the related Mortgage Loan and any
related and unreimbursed expenditures for real estate property taxes or for
property restoration or preservation.
LIQUIDATION PROCEEDS: Cash (including Insurance Proceeds) received by
the Servicer in connection with the liquidation of any Mortgage Loan or
Mortgaged Property acquired in respect thereof, whether through the sale or
assignment of such Mortgage Loan (other than pursuant to Section 5.21),
trustee's sale, foreclosure sale or otherwise, or the sale of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan other than amounts required to be paid to the Mortgagor pursuant to law or
the terms of the applicable Mortgage Note.
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LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the principal amount of the related Mortgage Loan at the
time of origination (or, (i) for purposes of Section 5.15, at the time of
determination and (ii) for purposes of a Mortgage Loan with respect to which a
conversion from adjustable rate to fixed rate has occurred, at the time of
initial origination) and the denominator of which is the appraised value of the
related Mortgaged Property at the time of origination or, in the case of a
Mortgage Loan financing the acquisition of the Mortgaged Property, the sales
price of the Mortgaged Property, if such sales price is less than such appraised
value.
LOCK-OUT PERCENTAGE: With respect to any Distribution Date, the lesser
of (I) (A) the Outstanding Certificate Principal Balance of the Class A-4
Certificates divided by (B) the Non-PO Allocated Amount immediately prior to the
Distribution Date and (II) 100.00%.
LOCK-OUT PREPAYMENT PERCENTAGE: The product of (a) the Lock-out
Percentage and (b) the Step Down Percentage.
LOCK-OUT PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the sum of (i) the Adjusted Lock-out Percentage of the amount
which is referred to in clause (i) of (I) the definition of Non-PO Class A
Optimal Principal Amount and (II) the definition of Subordinated Optimal
Principal Amount and (ii) the Lock-out Prepayment Percentage of the amounts
which are referred to in clauses (ii) through (v) of (I) the definition of
Non-PO Class A Optimal Principal Amount and (II) the definition of Subordinated
Optimal Principal Amount.
MASTER REMIC: The pool of assets consisting of the Subsidiary Regular
Interests and all payments of principal or interest on or with respect to the
Subsidiary Regular Interests after the Cut-off Date.
MASTER RESIDUAL INTEREST: The interest in the Master REMIC represented
by principal and interest payments in respect of the Class A-R Certificates and
amounts, if any, remaining in the Collection Account following termination of
the Trust Fund after payments to the Class A Certificateholders (other than the
Class A-R Certificateholder), the Class M Certificateholders, the Class B
Certificateholders and the Class A-R Certificateholders with respect to their
interests in the Subsidiary Residual Interest (or the holders of any separate
certificates representing the Subsidiary Residual Interest).
MASTER SERVICER FEE: With respect to any Mortgage Loan and any
Distribution Date, the fee payable to the Master Servicer pursuant to Section
8.07 equal to the product of (a) 1/12th of the Master Servicer Fee Rate and (b)
the Principal Balance of such Mortgage Loan immediately prior to such
Distribution Date.
MASTER SERVICER FEE RATE: A per annum rate equal to 0.0330%.
MASTER SERVICER: Chase Manhattan Mortgage Corporation, or its successor
in interest or permitted assigns.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS
or otherwise assigned to MERS, as agent for the holder from time to time of the
Mortgage Note.
MODIFIED MORTGAGE LOAN: Any Mortgage Loan which the Servicer has
modified pursuant to Section 5.01.
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MONTHLY PAYMENT: The minimum required monthly payment of principal and
interest due on a Mortgage Loan as specified in the Mortgage Note for any Due
Date (before any adjustment to such scheduled amount by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace period).
Monthly Payments shall be deemed due on an Outstanding Mortgage Loan until such
time as it becomes a Liquidated Mortgage Loan.
XXXXX'X: Xxxxx'x Investors Service, Inc. or its successor in interest.
MORTGAGE: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument creating a first lien or a first
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note. With respect to a Co-op Loan, the security agreement creating a
security interest in the stock allocated to a dwelling unit in a residential
cooperative housing corporation and pledged to secure such Co-op Loan and the
related Co-op Lease.
MORTGAGE FILE: As to each Mortgage Loan, the items referred to in
Exhibit B annexed hereto.
MORTGAGE LOAN: An individual mortgage loan and all rights with respect
thereto, evidenced by a Mortgage and a Mortgage Note, sold and assigned by the
Depositor to the Trustee and which is subject to this Agreement and included in
the Trust Fund. The Mortgage Loans originally sold and subject to this Agreement
are identified on the Mortgage Loan Schedule.
MORTGAGE LOAN SCHEDULE: The schedule of Mortgage Loans attached hereto
as Exhibit A as it may be amended in accordance with Section 3.03, setting forth
the following information as to each Mortgage Loan: (i) the Mortgage Loan
identifying number; (ii) the street address of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) including the zip
code; (iii) an indication of whether the Mortgaged Property (or the related
residential dwelling unit in the Underlying Mortgaged Property, in the case of a
Co-op Loan) is owner-occupied; (iv) the property type of the Mortgaged Property;
(v) the original number of months to stated maturity; (vi) the number of months
remaining to stated maturity from the Cut-off Date; (vii) the original
Loan-to-Value Ratio; (viii) the original principal balance of the Mortgage Loan;
(ix) the unpaid principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date; (x) the Mortgage Rate; (xi) the amount of the
current Monthly Payment; (xii) the PO Percentage with respect to such Mortgage
Loan; and (xiii) the Servicing Fee Rate with respect to such Mortgage Loan.
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
MORTGAGE POOL: The pool of Mortgage Loans held in the Trust Fund.
MORTGAGE POOL PRINCIPAL BALANCE: As of any date of determination, the
aggregate of the Principal Balances of each Outstanding Mortgage Loan on such
date of determination less the principal portion of any Monthly Payment due but
not paid with respect to which an Advance has not been made, initially
$250,041,132.29.
MORTGAGED PROPERTY: The property securing a Mortgage Note.
MORTGAGE RATE: With respect to each Mortgage Loan, the per annum rate
of interest borne by the Mortgage Loan, as specified in the Mortgage Note. The
Mortgage Rate for any Mortgage Loan shall be zero with respect to the period
prior to the period during which interest accrues with respect to such Mortgage
Loan's first Monthly Payment.
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MORTGAGOR: The obligor on a Mortgage Note.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
NET MORTGAGE RATE: With respect to each Mortgage Loan, a per annum rate
of interest for the applicable period equal to the Mortgage Rate less the
applicable Servicing Fee Rate and the Master Servicer Fee Rate.
NON DISCOUNT MORTGAGE LOANS: The Mortgage Loans having Net Mortgage
Rates in excess of the Remittance Rate.
NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage
Loan
NON-PO ALLOCATED AMOUNT: At the time of any determination, the amount
derived by (i) multiplying the Principal Balance of each Outstanding Mortgage
Loan on such date of determination by the Non-PO Percentage with respect to such
Mortgage Loan and (ii) summing the results.
NON-PO CLASS A CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-R and Class
A-X Certificates, referred to collectively.
NON-PO CLASS A OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class A Principal Balance and
(b) the sum of:
(i) the Non-PO Class A Percentage of the applicable Non-PO
Percentage of the principal portion of all Monthly
Payments, whether or not received, which were due during
the related Due Period on Mortgage Loans which were
outstanding during such Due Period;
(ii) the Non-PO Class A Prepayment Percentage of the applicable
Non-PO Percentage of all Principal Prepayments made on any
Mortgage Loan during the related Principal Prepayment
Period;
(iii) with respect to each Mortgage Loan not described in (iv)
below, the Non-PO Class A Percentage of the applicable
Non-PO Percentage of the principal portion of all Insurance
Proceeds, condemnation awards and any other cash proceeds
from a source other than the applicable Mortgagor, to the
extent required to be deposited in the Collection Account
pursuant to Section 5.08(iv) and (v), which were received
during the related Principal Prepayment Period, net of
related unreimbursed Servicing Advances and net of any
portion thereof which, as to any such Mortgage Loan,
constitutes Late Collections that have been the subject of
an Advance on any prior Distribution Date;
(iv) with respect to each Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal
Prepayment Period, the lesser of (A) the Non-PO Class A
Percentage of the applicable Non-PO Percentage of an amount
equal to the Principal Balance of such Liquidated Mortgage
Loan as of the Due Date immediately preceding the date on
which it became a Liquidated Mortgage Loan and (B) the
Non-PO Class A Prepayment Percentage of the applicable
Non-PO Percentage of the Net Liquidation Proceeds with
respect to such liquidated Mortgage Loan (net of any
unreimbursed Advances);
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(v) with respect to each Mortgage Loan repurchased during the
related Principal Prepayment Period pursuant to Section
2.02, 3.01, 5.01, 5.21 or 11.01, an amount equal to the
Non-PO Class A Prepayment Percentage of the applicable
Non-PO Percentage of the principal portion of the Purchase
Price (net of amounts with respect to which a distribution
of principal has previously been made to the Non-PO Class A
Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the excess
of the Non-PO Class A Principal Balance (calculated after
giving effect to reductions thereof on such Distribution
Date with respect to the amounts described in (i) - (v)
above) over the Non-PO Allocated Amount, if any, as of the
preceding Distribution Date.
NON-PO CLASS A PERCENTAGE : As of any Distribution Date, the fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class A Principal Balance and the denominator of which is
the Non-PO Allocated Amount as of the immediately preceding Due Date.
NON-PO CLASS A PREPAYMENT PERCENTAGE: As of any Distribution Date up to
and including the Distribution Date in November 2006, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class A Percentage
plus 70% of the Subordinated Percentage for such Distribution Date; as of any
Distribution Date in the second year thereafter, the Non-PO Class A Percentage
plus 60% of the Subordinated Percentage for such Distribution Date; as of any
Distribution Date in the third year thereafter, the Non-PO Class A Percentage
plus 40% of the Subordinated Percentage for such Distribution Date; as of any
Distribution Date in the fourth year thereafter, the Non-PO Class A Percentage
plus 20% of the Subordinated Percentage for such Distribution Date; and as of
any Distribution Date after the fourth year thereafter, the Non-PO Class A
Percentage; provided that, if the Non-PO Class A Percentage as of any such
Distribution Date is greater than the Non-PO Class A Percentage on the first
Distribution Date, the Non-PO Class A Prepayment Percentage shall be 100%; and
provided further that whenever the Non-PO Class A Percentage equals 0%, the
Non-PO Class A Prepayment Percentage shall equal 0%; and provided further,
however, that no reduction of the Non-PO Class A Prepayment Percentage below the
level in effect for the most recent period shall occur with respect to any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (i) the aggregate outstanding principal balance of Mortgage
Loans 60 days or more delinquent (including for this purpose any Mortgage Loans
in foreclosure and Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust Fund) does not exceed 50% of the
aggregate Outstanding Certificate Balance of the Subordinated Certificates as of
such date and (ii) cumulative Realized Losses through the last day of the month
preceding such Distribution Date (including Nonrecoverable Advances) do not
exceed (a) if such Distribution Date occurs between December 2006 and November
2007 inclusive, 30% of Original Subordinated Principal Balance, (b) if such
Distribution Date occurs between December 2007 and November 2008 inclusive, 35%
of the Original Subordinated Principal Balance, (c) if such Distribution Date
occurs between December 2008 and November 2009 inclusive, 40% of the Original
Subordinated Principal Balance, (d) if such Distribution Date occurs between
December 2009 and November 2010 inclusive, 45% of the Original Subordinated
Principal Balance if such Distribution Date occurs between and including
December 2009 and November 2010, and (e) if such Distribution Date occurs in
December 2010 and thereafter, 50% of the Original Subordinated Principal
Balance.
NON-PO CLASS A PRINCIPAL BALANCE: As of any Distribution Date, (a) the
Non-PO Class A Principal Balance for the immediately preceding Distribution Date
less (b) amounts distributed (or deemed distributed) to the Non-PO Class A
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.03 and Realized Losses allocated to the Non-PO Class A Certificates
pursuant to Section 6.04); provided that the Non-PO Class A Principal Balance on
the first Distribution Date shall be the Original Non-PO Class A Principal
Balance.
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NON-PO CLASS A PRINCIPAL PAYMENT RULES:
(I) With respect to any Distribution Date prior to the Credit Support
Depletion Date, distributions to the Non-PO Class A Certificateholders pursuant
to Section 6.01(b)(ii)(A) shall be made in the following amounts and priority:
first, to the Class A-4 Certificates, up to the Lockout Principal
Distribution Amount, until the Outstanding Certificate Principal Balance of such
Class has been reduced to zero;
second, to the Class A-R Certificate, until the Outstanding Certificate
Principal Balance of such Class has been reduced to zero;
third, concurrently, until the Outstanding Certificate Principal
Balance of the Class A-7 Certificate has been reduced to zero,
(0) 00.0000000000% of the portion of the Non-PO Class A Optimal
Principal Amount remaining after making the distribution described
in clauses first and second above to the Class A-7 Certificates,
until the Outstanding Certificate Principal Balance of such Class
has been reduced to zero;
(0) 00.0000000000% of the portion of the Non-PO Class A Optimal
Principal Amount remaining after making the distributions described
in clauses first and second above, as follows:
(a) first, to the Class A-1 and Class A-5 Certificates, pro rata,
until the Outstanding Principal Balance of each such Class has
been reduced to zero; and
(b) second, concurrently, as follows:
(i) 2.1862690671% to the Class A-8 Certificates; and
(ii) 97.8137309329% to the Class A-2 and Class A-3
Certificates, sequentially;
fourth, concurrently, until the Outstanding Certificate Principal
Balance of the Class A-8 Certificates has been reduced to zero,
(0) 0.0000000000% of the portion of the Non-PO Class A Optimal
Principal Amount remaining after making the distribution described
in clauses first, second and third above to the Class A-8
Certificates, until the Outstanding Certificate Principal Balance
of such Class has been reduced to zero;
(0) 00.0000000000% of the portion of the Non-PO Class A Optimal
Principal Amount remaining after making the distribution described
in clauses first, second and third above to the Class A-2 and Class
A-3 Certificates, sequentially, until the Outstanding Certificate
Principal Balance of each such Class has been reduced to zero; and
fifth, to the Class A-4 Certificates, until the Outstanding Certificate
Principal Balance of such Class has been reduced to zero.
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(II) With respect to any Distribution Date on or after the Credit
Support Depletion Date, distributions pursuant to Section 6.01(b)(ii)(A) shall
be made pro rata among the outstanding Classes of Non-PO Class A Certificates in
relation to the respective Outstanding Certificate Principal Balances of such
outstanding Classes, and not in accordance with the priority of payments among
such Classes set forth in clause (I) above.
NON-PO PERCENTAGE: With respect to each Mortgage Loan, the fraction,
expressed as a percentage (but not greater than 100%), the numerator of which
equals the applicable Net Mortgage Rate and the denominator of which equals the
Remittance Rate.
NONRECOVERABLE ADVANCE: Any Advance previously made or proposed to be
made in respect of a Mortgage Loan by the Servicer pursuant to Section 6.03
which, in the good faith judgment of the Servicer, will not or, in the case of a
proposed Advance, would not, ultimately be recoverable by the Servicer from Late
Collections or otherwise. The determination by the Servicer that it has made, or
would be making, a Nonrecoverable Advance shall be evidenced by a certificate of
a Servicing Officer of the Servicer delivered to the Trustee, any co-trustee,
the Master Servicer and the Depositor and detailing the reasons for such
determination.
OFFICERS' CERTIFICATE: A certificate signed by two of the Chairman of
the Board, the Vice Chairman of the Board, the President or a Vice President,
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries or any other duly authorized officer of the Depositor, the Master
Servicer or the Servicer, and delivered to the Trustee.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Depositor, the Master Servicer or the Servicer and who is reasonably
acceptable to the Trustee.
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates, the amount specified for such Class in Section 4.01(d).
ORIGINAL CLASS A PRINCIPAL BALANCE: $241,414,713.00
ORIGINAL CLASS M PRINCIPAL BALANCE: $ 3,000,493.00
ORIGINAL CLASS B PRINCIPAL BALANCE: $ 5,625,926.13
ORIGINAL NON-PO CLASS A PRINCIPAL BALANCE: $241,252,663.00
ORIGINAL CREDIT SUPPORT: With respect to any Class of Subordinated
Certificates (other than the Class B-5 Certificates), the level of Credit
Support indicated below:
Class M: 2.25%
Class B-1: 1.25%
Class B-2: 0.75%
Class B-3: 0.50%
Class B-4: 0.25%
ORIGINAL SUBORDINATED PRINCIPAL BALANCE: The aggregate Original
Certificate Principal Balance of the Subordinated Certificates.
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE: With respect to any Class
(other than the Class A-6, Class A-9 and Class A-X Certificates) of Certificates
and any Distribution Date, the Original Certificate Principal Balance of such
Class minus the sum of (i) any distributions of principal made on such Class
prior to such Distribution Date and (ii) any Realized Losses allocated to such
Class prior to such Distribution Date; provided, however, that (I) with respect
to the Class of Class B Certificates then outstanding having the highest
numerical class designation, the Outstanding Certificate Principal Balance of
such Class shall equal the excess of the Mortgage Pool Principal Balance
(together with the principal portion of any Monthly Payment due but not paid
with respect to which an Advance has not been made) over the sum of the
Outstanding Certificate Principal Balances of all Classes of Certificates (other
than the Class of Class B Certificates then outstanding having the highest
numerical class designation); and (II) during such time as the Outstanding
Certificate Principal Balance of the Class B-1 Certificates equals zero, with
respect to the Class M Certificates, the Outstanding Certificate Principal
Balance of such Class shall equal the excess of the Mortgage Pool Principal
Balance (together with the principal portion of any Monthly Payment due but not
paid with respect to which an Advance has not been made) over the Class A
Principal Balance.
21
OUTSTANDING MORTGAGE LOAN: As to any Distribution Date, a Mortgage Loan
which was not paid in full during the related or any previous Principal
Prepayment Period, which did not become a Liquidated Mortgage Loan during the
related or any previous Principal Prepayment Period and which was not
repurchased under Section 2.02, 3.01, 5.21 or 11.01 during the related or any
previous Principal Prepayment Period.
PASS-THRU ENTITY: A "Pass-Thru Entity" as defined in Section 860E(e)(6)
of the Code.
PAYING AGENT: The Person appointed by the Trustee as Paying Agent
pursuant to Section 4.05.
PAYOFF: Any Mortgagor payment of principal on a Mortgage Loan equal to
the entire outstanding Principal Balance of such Mortgage Loan, if received in
advance of the last scheduled Due Date for such Mortgage Loan and accompanied by
an amount of interest equal to accrued unpaid interest on the Mortgage Loan to
the date of payment-in-full.
PAYOFF EARNINGS: For any Distribution Date with respect to each
Mortgage Loan on which a Payoff was received by the related Principal Prepayment
Period, the aggregate of the interest earned by the Servicer from investment in
the Collection Account of such Payoff from the date of receipt of such Payoff
until the business Day immediately preceding the related Distribution Date (net
of investment losses).
PAYOFF INTEREST: For any Distribution Date with respect to a Mortgage
Loan for which a Payoff was received on or after the first calendar day of the
month of such Distribution Date and before the fifteenth calendar day of such
month, an amount of interest thereon at the applicable Net Mortgage Rate from
the first day of the month of such Distribution Date through the day of receipt
thereof.
PERCENTAGE INTEREST: As to any Certificate (other than a Class A-6,
Class A-9 or Class A-X Certificate), the percentage interest evidenced thereby
in distributions required to be made hereunder, such percentage interest being
equal, with respect to any Class, to the percentage obtained by dividing the
Outstanding Certificate Principal Balance of such Certificate by the aggregate
of the Outstanding Certificate Principal Balances of all the Certificates of
such Class and with respect to all Certificates, the percentage obtained by
dividing the Outstanding Certificate Principal Balance of such Certificate by
the aggregate of the Outstanding Certificate Principal Balances of all the
Certificates. With respect to any Class A-6, Class A-9 or Class A-X Certificate,
the percentage interest specified on the face of such Certificate.
PERMITTED ACTIVITIES: The primary activities of the Trust created
pursuant to this Agreement which shall be: (i) holding Mortgage Loans
transferred from the Depositor and other assets of the Trust Fund, including any
credit enhancement and passive derivative financial instruments that pertain to
beneficial interests issued or sold to parties other than the Depositor, its
Affiliates, or its agents; (ii) issuing certificates and other interests in the
assets of the Trust Fund; (iii) receiving collections on the Mortgage Loans and
making payments on such certificates and interests in accordance with the terms
of this Agreement; and (iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which activities cannot be
contrary to the status of the Trust Fund as a qualified special purpose entity
under existing accounting literature.
22
PERSON: Any individual, corporation, partnership, limited liability
company, limited liability partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
PO PERCENTAGE: The PO Percentage with respect to each Mortgage Loan as
identified on the Mortgage Loan Schedule, such percentage being equal to the
fraction, expressed as a percentage (but not less than 0%), the numerator of
which equals the excess of the Remittance Rate over the applicable Net Mortgage
Rate and the denominator of which equals the Remittance Rate.
PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section 5.15 hereof.
PRINCIPAL BALANCE: At the time of any determination, the principal
balance of a Mortgage Loan remaining to be paid at the close of business on the
Cut-off Date (after deduction of all principal payments due on or before the
Cut-off Date whether or not paid) (or, in the case of a substitute Mortgage Loan
included in the Trust Fund pursuant to Section 3.04, the close of business as of
the date of substitution) reduced by all amounts previously distributed to
Certificateholders that are allocable to payments of principal on such Mortgage
Loan (including the principal portion of Advances of the Servicer made pursuant
to Section 6.03).
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan (other than Late Collections) which constitutes a Payoff or a
Curtailment; provided, however, that the term Principal Prepayment does not
include Insurance Proceeds, Liquidation Proceeds, condemnation awards or other
cash proceeds from a source other than the applicable Mortgagor.
PRINCIPAL PREPAYMENT PERIOD: With respect to any Distribution Date and
each Curtailment, the period beginning on the first day of the month preceding
the month in which such Distribution Date occurs and ending on the last day of
such month. With respect to any Distribution Date and each Payoff, the period
beginning on the fifteenth day of the month preceding the month in which such
Distribution Date occurs and ending on the fourteenth day of the month in which
such Distribution Date occurs.
PURCHASE PRICE: With respect to any Mortgage Loan required to be
purchased on any date pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an
amount equal to the sum of (a) 100% of the Principal Balance thereof, (b) unpaid
accrued interest at the Mortgage Rate thereon from the Due Date on which
interest was last paid by the Mortgagor or Advanced by the Servicer to the Due
Date next following the date of repurchase and (c) the aggregate of any
unreimbursed Advances and any unreimbursed Servicing Advances.
QUALIFIED INSURER: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by FNMA and
FHLMC and whose claims-paying ability is rated in the two highest rating
categories by S&P and Xxxxx'x with respect to primary mortgage insurance and in
the two highest rating categories for general policyholder rating and financial
performance index rating by A.M. Best Company or its successor in interest with
respect to hazard and flood insurance.
23
RATE ADJUSTMENT DATE: The second LIBOR Business Day prior to the first
day of each Interest Accrual Period after the initial Interest Accrual Period.
RATING AGENCY: Any nationally recognized statistical rating
organization, or its successor, that rated one or more Classes of Certificates
at the request of the Depositor at the time of the initial issuance of the
Certificates. If such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicer. References
herein to the two highest long-term debt rating categories of a Rating Agency
shall mean AA or better, in the case of S&P, and Aa or better, in the case of
Xxxxx'x.
REALIZED LOSS: With respect to (i) a Liquidated Mortgage Loan, the
amount, if any, by which the unpaid Principal Balance and accrued interest
thereon at a rate equal to the Net Mortgage Rate exceeds the amount actually
recovered by the Servicer with respect thereto (net of reimbursement of Advances
and Servicing Advances) at the time such Mortgage Loan became a Liquidated
Mortgage Loan or (ii) with respect to a Mortgage Loan which is not a Liquidated
Mortgage Loan, any amount of principal that the Mortgagor is no longer legally
required to pay (except for the extinguishment of debt that results from the
exercise of remedies due to default by the Mortgagor).
REALIZED LOSS INTEREST SHORTFALL: The meaning specified in Section
6.05(c).
RECORD DATE: The close of business of the last Business Day of the
month preceding the month of the related Distribution Date.
REFERENCE BANK RATE: As of 11:00 A.M. London time, on the day that is
two LIBOR Business Days prior to the immediately preceding Distribution Date,
the rate at which deposits are offered in U.S. Dollars by the reference banks
(which shall be three major banks engaged in transactions in the London
interbank market, selected by the Master Servicer) to prime banks in the London
interbank market for a period of one month in amounts approximately equal to the
aggregate Outstanding Certificate Principal Balance of the Class A-1
Certificates and Class A-9 Notional Amount in accordance with the following
procedures. The Master Servicer will request the principal London office of each
of the reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations.
If on such date fewer than two quotations are provided as requested, the rate
will be the arithmetic mean of the rates quoted by one or more major banks in
New York City, selected by the Master Servicer as of 11:00 A.M., New York City
time, on such date for loans in U.S. Dollars to leading European banks for a
period of one month in amounts approximately equal to the aggregate Outstanding
Certificate Principal Balance of the Class A-1 and Class A-9 Notional Amount. In
the event no such quotations can be obtained, the rate will be LIBOR for the
prior Distribution Date, or in the case of the first Rate Adjustment Date,
2.08125%.
RELEVANT MORTGAGE LOAN: The meaning specified in Section 5.01.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in Section 860D of the Code. References herein to "a REMIC" or "the
REMICs" shall mean one or both, as the context requires, of the REMICs created
hereunder.
REMIC POOL: Either of the Master REMIC or the Subsidiary REMIC.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
REMICs which appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury temporary, proposed or final regulations and rulings promulgated
thereunder, as the foregoing are in effect (or with respect to proposed
regulations, are proposed to be in effect) from time to time.
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REMITTANCE RATE: 6.50% per annum.
REPURCHASE PROCEEDS: All proceeds of any Mortgage Loan or property
acquired in respect thereof repurchased pursuant to Section 2.02, 3.01, 5.01,
5.21 or 11.01.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Senior
Vice President, any Vice President, any Assistant Vice President, any Senior
Trust Officer, any Trust Officer or any other officer of the Trustee in its
Agency & Trust Office customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer in its Agency & Trust Office to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
S1 INTEREST: A regular interest in the Subsidiary REMIC having the
characteristics set forth in Section 2.04.
S2 INTEREST: A regular interest in the Subsidiary REMIC having the
characteristics set forth in Section 2.04.
S3 INTEREST: A regular interest in the Subsidiary REMIC having the
characteristics set forth in Section 2.04.
S4 INTEREST: A regular interest in the Subsidiary REMIC having the
characteristics set forth in Section 2.04.
S5 INTEREST: A regular interest in the Subsidiary REMIC having the
characteristics set forth in Section 2.04.
SP INTEREST: A regular interest in the Subsidiary REMIC having the
characteristics set forth in Section 2.04.
SX INTEREST: A regular interest in the Subsidiary REMIC having the
characteristics set forth in Section 2.04
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
or its successor in interest.
SALE AGREEMENT: The Mortgage Loan Sale Agreement dated as of November
28, 2001 between the Depositor and CMMC.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan as of
any Distribution Date, the unpaid principal balance of such Mortgage Loan as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such schedule by reason of bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) as of the Due Date in the month
preceding the month of such Distribution Date, or as the Cut-off Date, with
respect to the first Distribution Date, after giving effect to any previously
applied prepayments, the payment of principal due on such first (1st) day of the
month and any reduction of the principal balance of such Mortgage Loan by a
bankruptcy court, irrespective of any delinquency in payment by the related
Mortgagor.
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SELLER: CMMC.
SERVICER: WMMSC, or any of its successors under this Agreement as
herein provided.
SERVICER REMITTANCE DATE: With respect to any Distribution Date, one
Business Day preceding such Distribution Date.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations and which are "unanticipated expenses" of the REMIC, as
defined in the REMIC Provisions, including, but not limited to, the cost of (i)
the preservation, restoration and protection of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the Mortgaged Property if the Mortgaged Property
is acquired in satisfaction of the Mortgage, (iv) taxes and assessments on the
Mortgaged Properties subject to the Mortgage Loans and (v) compliance with the
obligations under Section 5.21.
SERVICING FEE: With respect to each Mortgage Loan and as of any
Distribution Date, the amount of the monthly fee paid to the Servicer for the
servicing of the Mortgage Loans equal to the total of one-twelfth of the
applicable Servicing Fee Rate of the Principal Balance thereof as of the
Determination Date in the preceding month, subject to adjustment as provided in
Section 6.05. The Servicing Fee shall be payable only at the time of and with
respect to those Mortgage Loans for which payment is in fact made of the entire
amount of the Monthly Payments that shall have come due and only at the time
such Monthly Payment shall be made. The right to receive the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
of such Monthly Payments (or the interest portion of any Principal Prepayment in
full) collected by the Servicer, or as otherwise provided under Section 5.09 or
5.23.
SERVICING FEE RATE: The per annum rate of interest set forth for each
Mortgage Loan on the Mortgage Loan Schedule.
SERVICING OFFICER: Any officer of the Servicer or any Subservicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name appears on a written certificate listing servicing
officers furnished to the Trustee by the Servicer on or prior to the Closing
Date, and signed on behalf of the Servicer or any Subservicer by its President,
any Vice President or its Treasurer, as such certificate may from time to time
be amended.
SIMILAR LAW: The meaning specified in Section 4.02(d).
SINGLE CERTIFICATE: A Certificate of any Class that evidences the
smallest permissible original denomination for such Class of Certificates as
specified in Section 4.01(d).
SPECIAL HAZARD AMOUNT: Initially, $2,500,411.32. As of the first
anniversary of the Cut-off Date, the Special Hazard Amount shall be reduced, but
not increased, to the lesser of (i) the initial Special Hazard Amount less the
sum of all amounts allocated to the Subordinated Certificates in respect of
Special Hazard Losses on the Mortgage Loans during such year or (ii) the
Adjustment Amount for such anniversary. As of each subsequent anniversary of the
Cut-off Date, the Special Hazard Amount shall be reduced, but not increased, to
the lesser of (i) the Special Hazard Amount on the immediately preceding
anniversary of the Cut-off Date less the sum of all amounts allocated to the
Subordinated Certificates in respect of Special Hazard Losses on the Mortgage
Loans during such year and (ii) the Adjustment Amount for such anniversary. The
"Adjustment Amount" with respect to each anniversary of the Cut-off Date will be
equal the greatest of (i) 1.00% multiplied by the aggregate outstanding
Principal Balance of the Mortgage Loans, (ii) the aggregate outstanding
Principal Balance of the Mortgage Loans secured by Mortgaged Properties located
in the California postal zip code area in which the highest percentage of
Mortgage Loans by Principal Balance are located and (iii) twice the outstanding
Principal Balance of the Mortgage Loan having the largest outstanding Principal
Balance.
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SPECIAL HAZARD LOSS: With respect to any Mortgage Loan, any Realized
Loss or portion thereof resulting from direct physical loss or damage to the
related Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan), which is not insured against under the Standard Hazard Policy
required to be maintained hereunder.
STANDARD HAZARD POLICY: Each standard hazard insurance policy or
replacement therefor referred to in Section 5.16.
STARTUP DAY: The meaning specified in Section 2.04(a).
STEP DOWN PERCENTAGE: With respect to any Distribution Date, the
percentage indicated below:
Distribution Date Occurring in Step Down Percentage
------------------------------ --------------------
December 2001 through November 2006 0%
December 2006 through November 2007 30%
December 2007 through November 2008 40%
December 2008 through November 2009 60%
December 2009 through November 2010 80%
December 2010 and thereafter 100%
STRIPPED INTEREST RATE: For each Mortgage Loan, the excess, if any, of
the Net Mortgage Rate for such Mortgage Loan over the Remittance Rate.
SUBORDINATED CERTIFICATES: The Class M and Class B Certificates,
referred to collectively.
SUBORDINATED OPTIMAL PRINCIPAL AMOUNT: With respect to any Distribution
Date, the lesser of (a) the aggregate Outstanding Certificate Principal Balance
of the Subordinated Certificates (before giving effect to any distributions of
principal on such Distribution Date) and (b)(1) the sum of: (i) the Subordinated
Percentage of the applicable Non-PO Percentage of the principal portion of all
Monthly Payments, whether or not received, which were due during the related Due
Period on Mortgage Loans which were outstanding during such Due Period; (ii) the
Subordinated Prepayment Percentage of the applicable Non-PO Percentage of all
Principal Prepayments made on any Mortgage Loan during the related Principal
Prepayment Period; (iii) with respect to each Mortgage Loan not described in
(iv) below, the Subordinated Percentage of the applicable Non-PO Percentage of
the principal portion of all Insurance Proceeds, condemnation awards and any
other cash proceeds from a source other than the applicable Mortgagor, to the
extent required to be deposited in the Collection Account pursuant to Section
5.08(iv) and (v), which were received during the related Principal Prepayment
Period, net of related unreimbursed Servicing Advances and net of any portion
thereof which, as to any such Mortgage Loan, constitutes Late Collections that
have been the subject of an Advance on any prior Distribution Date; (iv) with
respect to each Mortgage Loan which has become a Liquidated Mortgage Loan during
the related Principal Prepayment Period, an amount equal to the portion (if any)
of the Net Liquidation Proceeds with respect to such liquidated Mortgage Loan
(net of any unreimbursed Advances) that was not included in the Class A-P Amount
or, the Non-PO Class A Optimal Principal Amount with respect to such
Distribution Date; and (v) with respect to each Mortgage Loan repurchased during
the related Principal Prepayment Period pursuant to Section 2.02, 3.01, 5.01,
5.21 or 11.01, an amount equal to the Subordinated Prepayment Percentage of the
applicable Non-PO Percentage of the principal portion of the Purchase Price (net
of amounts with respect to which a distribution of principal has previously been
made to the Subordinated Certificateholders) minus (2) the Class A-P Shortfall
Amount with respect to such Distribution Date.
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SUBORDINATED PERCENTAGE: As of any Distribution Date, the difference
between 100% and the Non-PO Class A Percentage.
SUBORDINATED PREPAYMENT PERCENTAGE: As of any Distribution Date, the
difference between 100% and the Non-PO Class A Prepayment Percentage.
SUBSERVICER: Any Person with whom the Servicer enters into a
Subservicing Agreement.
SUBSERVICING AGREEMENT: Any agreement between the Servicer and any
Subservicer, relating to servicing or administration of certain Mortgage Loans
as provided in Section 5.02, in such form as has been approved by the Servicer.
SUBSIDIARY REGULAR INTERESTS: Each of the S1 Interest, S2 Interest, S3
Interest, S4 Interest, S5 Interest, SP Interest and SX Interest.
SUBSIDIARY REMIC: The pool of assets consisting of the Trust Fund
(other than the Subsidiary Regular Interests).
SUBSIDIARY RESIDUAL INTEREST: The interest in the Subsidiary REMIC
consisting of Excess Proceeds and Substitute Excess Interest, and with respect
to each Mortgage Loan, any amounts payable or received with respect to such
Mortgage Loan after payment in full of the Subsidiary Regular Interests.
SUBSTITUTE EXCESS INTEREST: As defined in Section 3.04.
TELERATE SCREEN PAGE 3750: The display designated as page 3750 on the
Dow Xxxxx Telerate Service or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks.
TRUST: The Trust created pursuant to this Agreement.
TRUST FUND: The corpus of the Trust consisting of (i) the Mortgage
Loans, (ii) such assets as shall from time to time be identified as deposited in
the Collection Account and the Certificate Account, (iii) property which secured
a Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure, (iv) Standard Hazard Policies and any other insurance policies, and
the proceeds thereof and (v) any proceeds of any of the foregoing.
TRUSTEE: Citibank, N.A., a national banking association and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party, and any successor trustee
at the time serving as successor trustee hereunder, appointed as herein
provided.
UNDERLYING MORTGAGED PROPERTY: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
U.S. PERSON: A "United States Person" as defined in Section 7701(a)(30)
of the Code.
WMMSC: Washington Mutual Mortgage Securities Corp., a Delaware
corporation, or its successor in interest.
[END OF ARTICLE I]
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; TRUST FUND
Section 2.01. Conveyance of Mortgage Loans. The Depositor, concurrently
with the execution and delivery hereof, does hereby sell, transfer, assign, set
over and convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Mortgage Loans, including all interest
and principal received on or with respect to the Mortgage Loans on or after the
Cut-off Date (other than Monthly Payments due on the Mortgage Loans on or before
the Cut-off Date).
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned:
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) (I) Original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement), in either case endorsed, "Pay to the order
of Citibank, N.A., as trustee, without recourse."
(B) The original Mortgage (including all riders thereto) with
evidence of recording thereon, or a copy thereof certified by the
public recording office in which such Mortgage has been recorded or, if
the original Mortgage has not been returned from the applicable public
recording office, a true certified copy, certified by the Seller, of
the original Mortgage together with a certificate of the Seller
certifying that the original Mortgage has been delivered for recording
in the appropriate public recording office of the jurisdiction in which
the Mortgaged Property is located.
(C) With respect to each Non-MERS Mortgage Loan which is not a
Co-op Loan, the original Assignment of Mortgage to "Citibank, N.A., as
trustee," which assignment shall be in form and substance acceptable
for recording, or a copy certified by the Seller as a true and correct
copy of the original Assignment of Mortgage which has been sent for
recordation. Subject to the foregoing, such assignments may, if
permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment
of Mortgage is in blanket form, a copy of the Assignment of Mortgage
shall be included in the related individual Mortgage File.
(D) The original policy of title insurance, including riders and
endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title
issued by the title insurance or escrow company.
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(E) Originals of all recorded intervening Assignments of Mortgage,
or copies thereof, certified by the public recording office in which
such Assignments or Mortgage have been recorded showing a complete
chain of title from the originator to the Depositor, with evidence of
recording, thereon, or a copy thereof certified by the public recording
office in which such Assignment of Mortgage has been recorded or, if
the original Assignment of Mortgage has not been returned from the
applicable public recording office, a true certified copy, certified by
the Seller of the original Assignment of Mortgage together with a
certificate of the Seller certifying that the original Assignment of
Mortgage has been delivered for recording in the appropriate public
recording office of the jurisdiction in which the Mortgaged Property is
located.
(F) Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements,
if applicable, or if the original of such document has not been
returned from the applicable public recording office, a true certified
copy, certified by the Seller, of such original document together with
certificate of Seller certifying the original of such document has been
delivered for recording in the appropriate recording office of the
jurisdiction in which the Mortgaged Property is located.
(G) If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed by
a Person on behalf of the Mortgagor, the original power of attorney or
other instrument that authorized and empowered such Person to sign
bearing evidence that such instrument has been recorded, if so required
in the appropriate jurisdiction where the Mortgaged Property is located
(or, in lieu thereof, a duplicate or conformed copy of such instrument,
together with a certificate of receipt from the recording office,
certifying that such copy represents a true and complete copy of the
original and that such original has been or is currently submitted to
be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the
original power of attorney or other such instrument has been delivered
for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
(ii) With respect to each Co-op Loan:
(A) (I) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement)), in either case endorsed "Pay to the order
of Citibank, N.A., as trustee, without recourse."
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-op Loan.
(C) The original Assignment of Mortgage to "Citibank, N.A. as
trustee".
(D) Original assignments of Mortgage showing a complete chain of
assignment from the originator of the related Co-op Loan to the Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect
to such Co-op Loan.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage Loan
Seller or its agent assigning the security interest covered by such
Form UCC-1 to "Citibank, N.A. as trustee", together with all Forms
UCC-3 (or copies thereof) showing a complete chain of assignment from
the originator of the related Co-op Loan to the Seller, with evidence
of recording thereon.
30
(G) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of
such Co-op Loan with a stock power in blank attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee, and
all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan.
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F)
above with respect to such Co-op Loan.
If in connection with any Mortgage Loan which is not a Co-op Loan the
Depositor cannot deliver the Mortgage, Assignments of Mortgage, or assumption,
consolidation or modification agreement, as the case may be, with evidence of
recording thereon concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage, or assumption, consolidation or modification
agreement, as the case may be, has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage, Assignments of Mortgage, or assumption, consolidation or
modification agreement, as the case may be, has been delivered to the
appropriate public recording office for recordation. Thereafter, the Depositor
shall deliver or cause to be delivered to the Trustee such Mortgage, Assignments
of Mortgage, or assumption, consolidation or modification agreement, as the case
may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office.
With respect to any Non-MERS Mortgage Loans which are not Co-op Loans,
and as to which the related Mortgaged Property is located in Florida, the
Servicer shall cause to be recorded in the appropriate public recording office
for real property records each Assignment of Mortgage referred to in this
Section 2.01 as soon as practicable. With respect to any Non-MERS Mortgage Loans
which are not Co-op Loans as to which the related Mortgaged Property is located
outside of Florida, the Servicer shall not be obligated to cause to be recorded
the Assignment of Mortgage referred to in this Section 2.01. With respect to
Co-op Loans as to which the related dwelling unit is located in Florida, the
Servicer shall cause to be filed in the appropriate filing office the Form UCC-3
referred to in this Section 2.01 as soon as practicable. With respect to any
Co-op Loans as to which the related dwelling unit is located outside Florida,
the Servicer shall not be obligated to cause to be filed the Form UCC-3 referred
to in this Section 2.01. While each such Assignment of Mortgage or Form UCC-3 is
being recorded or filed, as applicable, the Servicer shall deliver to the
Trustee a photocopy of such document. If any such Assignment of Mortgage or Form
UCC-3 is returned unrecorded or unfiled to the Servicer because of any defect
therein, the Servicer shall cause such defect to be cured and such document to
be recorded or filed in accordance with this paragraph. The Depositor shall
deliver or cause to be delivered each such original recorded or filed Assignment
of Mortgage and intermediate assignment or Form UCC-3 to the Trustee within 270
days of the Closing Date or shall deliver to the Trustee on or before such date
an Officer's Certificate stating that such document has been delivered to the
appropriate public recording or filing office for recording or filing, but has
not been returned solely because of a delay caused by such recording or filing
office. In any event, the Depositor shall use all reasonable efforts to cause
each such document with evidence of recording or filing thereon to be delivered
to the Trustee within 300 days of the Closing Date.
31
With respect to each MERS Mortgage Loan, the Trustee, at the expense of
the Depositor and at the direction and with the cooperation of the Servicer,
shall cause to be taken such actions as are necessary to cause the Trustee to be
clearly identified as the owner of each such Mortgage Loan on the records of
MERS for purposes of the system of recording transfers of beneficial ownership
of mortgages maintained by MERS.
The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee. Neither the Depositor nor
the Servicer shall take any action inconsistent with such ownership and shall
not claim any ownership interest therein. The Depositor and the Servicer shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Servicer or any
Subservicer, for the benefit of the Trustee as the owner thereof, and the
Servicer's or such Subservicer's possession of the contents of each Mortgage
File so retained is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer or such Subservicer is in a
custodial capacity only. The Depositor agrees to take no action inconsistent
with the Trustee's ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans. Each Mortgage File and the mortgage
documents relating to the Mortgage Loans contain proprietary business
information of the Servicer and its customers. The Trustee, the Master Servicer
and the Depositor agree that they will not use such information for business
purposes without the express written consent of the Servicer and that all such
information shall be kept strictly confidential.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
32
In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee all of its right, title and interest in that portion of the Trust Fund
described in items (ii), (iii), (iv) and (v) of the definition thereof and
further assigns to the Trustee for the benefit of the Certificateholders those
representations and warranties of the Seller contained in the Sale Agreement and
described in Section 3.01 hereof and the benefit of the repurchase obligations
of the Seller described in Sections 2.02 and 3.01 hereof and the obligations of
the Seller contained in the Sale Agreement to take, at the request of the
Depositor or the Trustee, all action on its part which is reasonably necessary
to ensure the enforceability of a Mortgage Loan.
Section 2.02. Acceptance by Trustee. Except as set forth in the Exception Report
delivered contemporaneously herewith (the "Exception Report"), the Trustee
acknowledges receipt of the Mortgage Note for each Mortgage Loan and delivery of
a Mortgage File (but does not acknowledge receipt of all documents required to
be included in such Mortgage File) with respect to each Mortgage Loan and
declares that it holds and will hold such documents and any other documents
constituting a part of the Mortgage Files delivered to it in trust for the use
and benefit of all present and future Certificateholders. The Depositor will
cause the Seller to repurchase any Mortgage Loans to which an exception was
taken in the Exception Report unless such exception is cured to the satisfaction
of the Trustee within 45 Business Days of the Closing Date.
The Trustee agrees, for the benefit of Certificateholders, to review
each Mortgage File delivered to it within 270 days after the Closing Date to
ascertain that all documents required by Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans identified in
Exhibit A that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days) after such finding so notify the Servicer, the Seller and the Depositor.
In addition, the Trustee shall also notify the Servicer, the Seller and the
Depositor, if (a) in examining the Mortgage Files, the documentation shows on
its face (i) any adverse claim, lien or encumbrance, (ii) that any Mortgage Note
was overdue or had been dishonored, (iii) any evidence on the face of any
Mortgage Note or Mortgage of any security interest or other right or interest
therein, or (iv) any defense against or claim to the Mortgage Note by any party
or (b) the original Mortgage with evidence of recording thereon with respect to
a Mortgage Loan is not received within 270 days of the Closing Date; provided,
however, that if the Depositor cannot deliver the original Mortgage with
evidence of recording thereon because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage has been delivered to the appropriate public recording
officer for recordation and thereafter the Depositor shall deliver or cause to
be delivered such Mortgage with evidence of recording thereon upon receipt
thereof from the public recording office. The Trustee shall request that the
Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 3.03, within 60
days from the date the Seller was notified of such omission or defect and, if
the Seller does not correct or cure such omission or defect within such period,
that the Seller purchase such Mortgage Loan from the Trustee within 90 days from
the date the Trustee notified the Seller of such omission, defect or other
irregularity at the Purchase Price of such Mortgage Loan. The Purchase Price for
any Mortgage Loan purchased pursuant to this Section 2.02 shall be paid to the
Servicer and deposited by the Servicer in the Collection Account promptly upon
receipt, and, upon receipt by the Trustee of written notification of such
deposit signed by a Servicing Officer, the Trustee shall promptly release to the
Seller the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, without recourse, as shall be necessary
to vest in the Seller or its designee, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility
with regard to such Mortgage Loan. It is understood and agreed that the
obligation of the Seller to purchase, cure or substitute any Mortgage Loan as to
which a material defect in or omission of a constituent document exists shall
constitute the sole remedy respecting such defect or omission available to the
Trustee on behalf of Certificateholders. The Trustee shall be under no duty or
obligation to inspect, review and examine such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable or
appropriate to the represented purpose, or that they have actually been
recorded, or that they are other than what they purport to be on their face. The
Trustee shall keep confidential the name of each Mortgagor and shall not solicit
any such Mortgagor for the purpose of refinancing the related Mortgage Loan.
33
Within 280 days of the Closing Date, the Trustee shall deliver to the
Depositor and the Servicer the Trustee's Certification, substantially in the
form of Exhibit G attached hereto, setting forth the status of the Mortgage
Files as of such date.
Section 2.03. Trust Fund; Authentication of Certificates. The Trustee
acknowledges and accepts the assignment to it of the Trust Fund created pursuant
to this Agreement in trust for the use and benefit of all present and future
Certificateholders. The Trustee acknowledges the assignment to it for the
benefit of the Trust Fund of the Mortgage Loans and has caused to be
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Mortgage Loans, Certificates duly authenticated by the Trustee or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent in authorized denominations evidencing ownership of the
entire Trust Fund.
Section 2.04. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Subsidiary REMIC and the Master
REMIC as a REMIC. This Agreement shall be construed so as to carry out the
intention of the parties that each REMIC Pool be treated as a REMIC at all times
prior to the date on which the Trust Fund is terminated. The Closing Date is
hereby designated as the "startup day" of each REMIC Pool within the meaning of
Section 860G(a)(9) of the Code. The "regular interests" (within the meaning of
Section 860G(a)(1) of the Code) in the Master REMIC shall consist of the Class A
Certificates (other than the Class A-R Certificate), the Class M Certificates
and the Class B Certificates, and the "residual interest" (within the meaning of
Section 860G(a)(2) of the Code) in the Master REMIC shall consist of the Master
Residual Interest, and all such interests shall be designated as such on the
Startup Day. The "regular interests" (within the meaning of Section 860G(a)(1)
of the Code) in the Subsidiary REMIC shall consist of the Subsidiary Regular
Interests, and the "residual interest" (within the meaning of Section 860G(a)(2)
of the Code) in the Subsidiary REMIC shall consist of the Subsidiary Residual
Interest, and all such interests shall be designated as such on the Startup Day.
The Subsidiary Regular Interests shall be held by the Master REMIC at all times
and shall not be transferable under any circumstances. Solely for the purposes
of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the "latest possible
maturity date" by which the Outstanding Certificate Principal Balance of each
Class of Certificates representing a regular interest in the Master REMIC and
each Subsidiary Regular Interest would be reduced to zero is the Distribution
Date immediately following the latest scheduled maturity of any Mortgage Loan.
(b) The assets of the Subsidiary REMIC shall consist of the pool of
assets consisting of the Trust Fund.
(c) The Subsidiary Regular Interests shall have the following
characteristics:
(i) The S1 Interest shall:
(A) have the same characteristics as the Class A-1
Certificates and Class A-9 Certificates and shall have the right to
receive distributions from the Mortgage Pool in the amounts
necessary to make all required distributions with respect to such
Classes;
(B) have an original principal balance equal to the Original
Certificate Balance of the Class A-1 Certificates and
34
(C) bear interest at a rate of 8.50%.
(ii) The S2 Interest shall:
(A) have the same characteristics as the Class A-2
Certificates, Class A-3 Certificates, Class A-7 Certificates, Class
A-8 Certificates and Subordinated Certificates and shall have the
right to receive distributions from the Mortgage Pool in the
amounts necessary to make all required distributions with respect
to such Classes;
(B) have an original principal balance equal to the aggregate
of the Original Certificate Balance of each of the Class A-2
Certificates, Class A-3 Certificates, Class A-7 Certificates, Class
A-8 Certificates and Subordinated Certificates and
(C) bear interest at a rate of 6.50%.
(iii) The S3 Interest shall:
(A) have the same characteristics as the Class A-4
Certificates and Class A-6 Certificates and shall have the right to
receive distributions from the Mortgage Pool in the amounts
necessary to make all required distributions with respect to such
Classes;
(B) have an original principal balance equal to the Original
Certificate Balance of the Class A-4 Certificates and
(C) bear interest at a rate of 6.50%.
(iv) The S4 Interest shall:
(A) have the same characteristics as the Class A-5
Certificates and shall have the right to receive distributions from
the Mortgage Pool in the amounts necessary to make all required
distributions with respect to such Class;
(B) have an original principal balance equal to the Original
Certificate Balance of the Class A-5 Certificates and
(C) bear interest at a rate of 6.00%.
(v) The S5 Interest shall:
(A) have an original principal balance equal to the Original
Certificate Balance of the Class A-R Certificate and bear interest
at a rate of 6.50%.
(vi) The SP Interest shall:
(A) have the same characteristics as the Class A-P
Certificates and shall have the right to receive distributions from
the Mortgage Pool in the amounts necessary to make all required
distributions with respect to such Class;
(B) have an original principal balance equal to the Original
Certificate Balance of the Class A-P Certificates and
(C) bear interest at a rate of 0.00%.
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(vii) The SX Interest shall:
(A) have the same characteristics as the Class A-X
Certificates and shall have the right to receive distributions from
the Mortgage Pool in the amounts necessary to make all required
distributions with respect to such Class;
(B) have an original principal balance equal to zero and
(C) be entitled to an amount of interest equal to the Class
A-X Interest Accrual Amount.
(d) The assets of the Master REMIC shall consist of the pool of assets
consisting of the Subsidiary Regular Interests and all payments of principal or
interest on or with respect to the Subsidiary Regular Interests after the
Cut-off Date.
(e) All payments with respect to the Class A-1 Certificates and Class
A-9 Certificates shall be considered to have been made solely from the S1
Interest. All payments with respect to the Class A-2 Certificates, Class A-3
Certificates, Class A-7 Certificates, Class A-8 Certificates and Subordinated
Certificates shall be considered to have been made solely from the S2 Interest.
All payments with respect to the Class A-4 Certificates and Class A-6
Certificates shall be considered to have been made solely from the S3 Interest.
All payments with respect to the Class A-5 Certificates shall be considered to
have been made solely from the S4 Interest. All payments of principal and
accrued interest with respect to the Class A-R Certificates shall be considered
to have been made solely from the S5 Interest. All payments with respect to the
Class A-P Certificates shall be considered to have been made solely from the SP
Interest. All payments with respect to the Class A-X Certificates shall be
considered to have been made solely from the SX Interest.
(f) All Realized Losses and recoveries thereof allocated pursuant to
Section 6.04 to the Class A-1 Certificates and Class A-9 Certificates shall be
considered to have been allocated to the S1 Interest. All Realized Losses and
recoveries thereof allocated pursuant to Section 6.04 to the Class A-2
Certificates, Class A-3 Certificates, Class A-7 Certificates, Class A-8
Certificates and Subordinated Certificates shall be considered to have been
allocated to the S2 Interest. All Realized Losses and recoveries thereof
allocated pursuant to Section 6.04 to the Class A-4 Certificates shall be
considered to have been allocated to the S3 Interest. All Realized Losses and
recoveries thereof allocated pursuant to Section 6.04 to the Class A-5
Certificates shall be considered to have been allocated to the S4 Interest. All
Realized Losses and recoveries thereof allocated pursuant to Section 6.04 to the
Class A-R Certificates shall be considered to have been allocated to the S5
Interest. All Realized Losses and recoveries thereof allocated pursuant to
Section 6.04 to the Class A-P Certificates shall be considered to have been
allocated to the SP Interest. All Realized Losses and recoveries thereof
allocated pursuant to Section 6.04 to the Class A-X Certificates shall be
considered to have been allocated to the SX Interest.
(g) On each Distribution Date, an amount equal to the Available
Distribution Amount shall be treated for federal income tax purposes as applied
to distributions on the interests in the Subsidiary REMIC in an amount
sufficient to make the distributions on the respective Certificates on such
Distribution Date in accordance with the provisions of Section 6.01.
(h) The "tax matters person" with respect to each REMIC Pool for
purposes of the REMIC provisions shall be the beneficial owner of the Class A-R
Certificate; provided, however, that such beneficial owner of a Class A-R
Certificate, by its acceptance thereof, irrevocably appoints the Servicer as its
agent and attorney-in-fact to act as "tax matters person" with respect to each
REMIC Pool for purposes of the REMIC provisions.
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(i) It is intended that each REMIC Pool shall constitute, and that the
affairs of the Trust Fund shall be conducted so as to qualify each REMIC Pool
as, a "real estate mortgage investment conduit" as defined in and in accordance
with the REMIC Provisions. In furtherance of such intention, the Servicer
covenants and agrees that it shall act as agent (and the Servicer is hereby
appointed to act as agent) on behalf of the Trust Fund and the Holder of the
Class A-R Certificate and that in such capacity it shall:
(i) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income
Tax Return (Form 1066) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local
tax authorities income tax or information returns for each taxable year
with respect to each REMIC Pool using the calendar year as the taxable
year and the accrual method of accounting, containing such information
and at the times and in the manner as may be required by the Code or
state or local tax laws, regulations, or rules, and shall furnish or
cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required
thereby;
(ii) within thirty days of the Closing Date, shall furnish or cause
to be furnished to the Internal Revenue Service, on Form 8811 or as
otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may
contact for tax information relating thereto (and the Servicer shall
act as the representative of each REMIC Pool for this purpose),
together with such additional information as may be required by such
Form, and shall update such information at the time or times in the
manner required by the Code;
(iii) make or cause to be made elections, on behalf of each REMIC
Pool, to be treated as a REMIC, and make the appropriate designations,
if applicable, in accordance with this Section 2.04 on the federal tax
return of each REMIC Pool for its first taxable year (and, if
necessary, under applicable state law);
(iv) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns or reports,
or furnish or cause to be furnished by telephone, mail, publication or
other appropriate method such information, as and when required to be
provided to them in accordance with the REMIC Provisions, including
without limitation, the calculation of any original issue discount;
(v) provide information necessary for the computation of tax
imposed on the transfer of the Class A-R Certificate to a Disqualified
Organization, or an agent (including a broker, nominee or other
middleman) of a Disqualified Organization, or a pass-through entity in
which a Disqualified Organization is the record holder of an interest
(the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(vi) ensure that federal, state or local income tax or information
returns shall be signed by the Trustee or such other person as may be
required to sign such returns by the Code or state or local laws,
regulations or rules; and
(vii) maintain such records relating to each REMIC Pool, as may be
required by the Code and, as may be necessary to prepare the foregoing
returns, schedules, statements or information.
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Section 2.05. Permitted Activities of Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities.
Section 2.06. Qualifying Special Purpose Entity. For purposes of SFAS
140, the parties hereto intend that the Trust shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.05 of this Agreement
shall be limited in accordance with paragraph 35 thereof.
[END OF ARTICLE II]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND
THE SERVICER; REPURCHASE OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Depositor with
respect to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that on the Closing Date it has entered into
the Sale Agreement with CMMC as Seller, that the Seller has made the following
representations and warranties with respect to each Mortgage Loan in such Sale
Agreement as of the Closing Date, which representations and warranties run to
and are for the benefit of the Depositor and the Trustee for the benefit of the
Certificateholders, and as to which the Depositor has assigned to the Trustee
for the benefit of the Certificateholders, pursuant to Section 2.01 hereof, the
right to cause the Seller to repurchase a Mortgage Loan as to which there has
occurred an uncured breach of representations and warranties in accordance with
the provisions of the Sale Agreement.
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects;
(b) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Co-op Loan, the related Mortgage is a valid, enforceable and
subsisting first security interest on the related cooperative shares securing
the related Mortgage Note, subject only to (a) liens of the related residential
cooperative housing corporation for unpaid assessments representing the
Mortgagor's pro rata share of the related residential cooperative housing
corporation's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the related security
agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Trustee's security interest in such cooperative shares;
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(c) All payments due prior to the Cut-off Date for such Mortgage Loan
have been made as of the Closing Date, the Mortgage Loan is not delinquent in
payment more than 30 days and has not been dishonored; to the best of the
Seller's knowledge, there are no material defaults under the terms of the
Mortgage Loan; the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage (or, with respect to a Co-op Loan,
the related Mortgagor), directly or indirectly, for the payment of any amount
required by the Mortgage Loan; there has been no more than one delinquency in
excess of 30 days during the preceding twelve-month period;
(d) To the best of the Seller's knowledge, all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid,
or escrow funds have been established in an amount sufficient to pay for every
such escrowed item which remains unpaid and which has been assessed but is not
yet due and payable;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments. No Mortgagor has been released, in whole or in part, from the terms
thereof except in connection with an assumption agreement and which assumption
agreement is part of the Mortgage File and the terms of which are reflected in
the Mortgage Loan Schedule;
(f) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or Mortgage, or the exercise of any right thereunder, render the Mortgage
Note or Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto, and the Mortgagor was not a debtor in any state
or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(g) With respect to a Mortgage Loan which is not a Co-op Loan, all
buildings or other customarily insured improvements upon the Mortgaged Property
are insured by an insurer acceptable under the FNMA Guides against loss by fire,
hazards of extended coverage and such other hazards as are provided for in the
FNMA Guides or by FHLMC. All such standard hazard policies are in full force and
effect and on the date of origination contained a standard mortgagee clause
naming the Seller and its successors in interest and assigns as loss payee and
such clause is still in effect and all premiums due thereon have been paid. If
required by the Flood Disaster Protection Act of 1973, as amended, the Mortgaged
Property is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration which policy conforms
to FNMA and FHLMC requirements. The Mortgage obligates the Mortgagor thereunder
to maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(h) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects;
(i) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission;
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(j) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property, including, all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such lien is free and clear of all adverse claims, liens and
encumbrances having priority over the first lien of the Mortgage subject only to
(1) the lien of non-delinquent current real property taxes and assessments not
yet due and payable, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property as set forth in such appraisal, and
(3) 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 the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and perfected first
lien and first priority security interest on the property described therein, and
the Depositor has the full right to sell and assign the same to the Trustee for
the benefit of the Certificateholders;
(k) The Mortgage Note and the related Mortgage are original and genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors and the Depositor has taken all action necessary to transfer such
rights of enforceability to the Trustee for the benefit of the
Certificateholders. All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have been
duly and property executed by such parties. The proceeds of the Mortgage Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds therefor have
been complied with;
(l) The Depositor is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by the Mortgage Note, except for
the Assignments of Mortgage which have been sent for recording, and upon
recordation the Depositor will be the owner of record of the Mortgage and the
indebtedness evidenced by the Mortgage Note, and upon the sale of the Mortgage
Loan to the Trust for the benefit of the Certificateholders, the Depositor will
retain the Mortgage File or any part thereof with respect thereto not delivered
to the Trust for the benefit of the Certificateholders or its designee in trust
only for the purpose of servicing and supervising the servicing of the Mortgage
Loan. Immediately prior to the transfer and assignment to the Trust for the
benefit of the Certificateholders, the Mortgage Loan, including the Mortgage
Note and the Mortgage, were not subject to an assignment or pledge, and the
Depositor had good and marketable title to and was the sole owner thereof and
had full right to transfer and sell the Mortgage Loan to the Trustee for the
benefit of the Certificateholders free and clear of any encumbrance, equity,
lien, pledge, charge, claim or security interest and has the full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign the Mortgage Loan pursuant to this Agreement and
following the sale of the Mortgage Loan, the Trustee for the benefit of the
Certificateholders will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest;
40
(m) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage Loan is covered by an ALTA lender's title insurance policy or other
generally acceptable form of policy or insurance acceptable to FNMA or FHLMC,
issued by a title insurer acceptable to FNMA or FHLMC and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (j) (1), (2) and (3) above) the Seller,
its successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. Such lender's title insurance
policy insures ingress and egress by or upon the Mortgaged Property or any
interest therein. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. The Seller, its successors and assigns, are the sole insureds of such
lender's title insurance policy, such title insurance policy has been duly and
validly endorsed to the Trustee for the benefit of the Certificateholders or the
assignment to the Trustee for the benefit of the Certificateholders of the
Seller's interest therein does not require the consent of or notification to the
insurer and such lender's title insurance policy is in full force and effect and
will be in full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(n) There is no default, breach, violation or event of acceleration
existent, under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
(o) There are no mechanics', or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage;
(p) With respect to a Mortgage Loan which is not a Co-op Loan, all
improvements subject to the Mortgage which were considered in determining the
Appraised Value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (m) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances; the Mortgaged Property is lawfully occupied under
applicable law;
(q) The Mortgage Loan complies in all material respects with all the
terms, conditions and requirements of the Seller's underwriting standards in
effect at the time of origination of such Mortgage Loan. The Mortgage Notes and
Mortgages (exclusive of any riders) are on forms generally acceptable to FNMA or
FHLMC. Monthly Payments under the Mortgage Note are due and payable on the first
day of each month. The Mortgage contains the usual and enforceable provisions of
the originator at the time of origination for the acceleration of the payment of
the unpaid principal amount of the Mortgage Loan if the related Mortgaged
Property is sold without the prior consent of the mortgagee thereunder;
(r) To the best of the Seller's knowledge, the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), is not subject to
any material damage by waste, fire, earthquake, windstorm, flood or other
casualty. To the best of the Seller's knowledge, at origination of the Mortgage
Loan there was, and there currently is, no proceeding pending for the total or
partial condemnation of the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan);
(s) The related Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (l) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
41
(t) If the Mortgage constitutes a deed of trust, a trustee, authorized
and duly qualified if required under applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses, except as may be required by local law, are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale or attempted sale after default by the
Mortgagor;
(u) The Mortgage File contains an appraisal of the related Mortgaged
Property (or the related residential dwelling unit in the Underlying Mortgaged
Property, in the case of a Co-op Loan), signed prior to the final approval of
the mortgage loan application by an appraiser approved by the Seller who had no
interest, direct or indirect, in the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan), or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan. The appraisal is in a form acceptable to FNMA or FHLMC;
(v) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (A) in substantial compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property (or Underlying Mortgaged Property, in the case of
a Co-op Loan), is located, and (B) (1) organized under the laws of such state,
or (2) qualified to do business in such state, or (3) federal savings and loan
associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;
(w) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security interest of any applicable agreement or
chattel mortgage referred to above and such collateral does not serve as
security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(y) The Mortgage Loan does not contain "graduated payment" features;
(z) The Mortgagor is not in bankruptcy and, to the best of the Seller's
knowledge, the Mortgagor is not insolvent;
(aa) The Mortgage Loans are fixed rate mortgage loans. Each Mortgage
Loan has an original term to maturity of not more than thirty (30) years, with
interest payable in arrears on the first day of each month. Each Mortgage Note
is payable in equal monthly installments of principal and interest which are
sufficient to amortize the Mortgage Loan fully by the stated maturity date. No
Mortgage Loan contains terms or provisions which would result in negative
amortization;
(bb) Each Mortgage Note, each Mortgage, each Assignment of Mortgage and
any other documents required pursuant to this Agreement to be delivered to the
Trustee on behalf of the Certificateholders or its designee, or its assignee for
each Mortgage Loan, have been, on or before the Closing Date, delivered to the
Trustee on behalf of the Certificateholders or its designee, or its assignee;
(cc) All escrow payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. As to any Mortgage Loan that is the subject of an escrow, escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every escrowed item that remains unpaid and has been
assessed but is not yet due and payable. No escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note. Any interest required to be paid pursuant to state,
federal and local law has been properly paid and credited;
42
(dd) [Reserved];
(ee) In the event the Mortgage Loan has a Loan-to-Value Ratio greater
than 80%, the excess of the principal balance of the Mortgage Loan over 75% of
the Appraised Value, with respect to a refinanced Mortgage Loan, or the lesser
of the Appraised Value or the purchase price of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), with respect to a
purchase money Mortgage Loan, is and will be insured as to payment defaults by a
Primary Insurance Policy issued by a Qualified Insurer. All provisions of such
Primary Insurance Policy have been and are being complied with, such policy is
in full force and effect, and all premiums due thereunder have been paid. No
action, inaction, or event has occurred and no state of facts exists that has,
or will result in the exclusion from, denial of, or defense to coverage. Any
Mortgage Loan subject to a Primary Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Insurance Policy and to pay all premiums and
charges in connection therewith. The Mortgage Rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium;
(ff) The Assignment of Mortgage is in recordable form and is acceptable
for recording (or, in the case of a Co-op Loan, is in a form acceptable for
filing) under the laws of the jurisdiction in which the Mortgaged Property (or
underlying Mortgaged Property, in the case of a Co-op Loan) is located;
(gg) As to Mortgage Loans that are not secured by an interest in a
leasehold estate, the Mortgaged Property (or Underlying Mortgaged Property, in
the case of a Co-op Loan), is located in the state identified in the Mortgage
Loan Schedule and consists of a single parcel of real property with a detached
single family residence erected thereon, or a two-to four-family dwelling, or an
individual condominium unit in a condominium project, or a dwelling unit in a
residential cooperative housing corporation or an individual unit in an attached
planned unit development or a detached planned unit development, provided,
however, that no residence or dwelling is a single parcel of real property with
a mobile home thereon. As of the date of origination, no portion of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), was used for commercial purposes, and since the date of origination, to
the best of the Seller's knowledge, no portion of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), is used for
commercial purposes;
(hh) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), as of the date
of origination of the related Mortgage Loan, such condominium or planned unit
development project met the Seller's eligibility requirements, as set forth in
the Seller's underwriting guidelines as of such date; in the case of each Co-op
Loan, the related residential cooperative housing corporation complied in all
material respects with the Seller's requirements as set forth in the Seller's
underwriting guidelines as of such date;
(ii) To the best of the Seller's knowledge, there is no pending action
or proceeding directly involving the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan), in which compliance with any
environmental law, rule or regulation is an issue;
(jj) As of the Cut-off Date, the Seller has not granted any interest
rate relief to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act
of 1940, as amended;
(kk) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), or facilitating the trade-in or exchange of a Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan);
43
(ll) No action has been taken or failed to be taken by Depositor, on or
prior to the Closing Date, which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any Primary Insurance Policy
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Depositor, or
for any other reason under such coverage;
(mm) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act, as amended, a savings and loan association, a savings
bank, a commercial bank, credit union, insurance company or similar institution
which is supervised and examined by a federal or state authority;
(nn) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from commencement of
amortization;
(oo) The Mortgage Loan is a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code (without regard to Treas. Reg. ss.1.860G-2(f) or
any similar rule that provides that a defective obligation is a qualified
mortgage for a temporary period); and
(pp) With respect to a Mortgage Loan that is a Co-op Loan, the stock
that is pledged as security for the Mortgage Loan is held by a Person as a
tenant-stockholder (as defined in Section 216 of the Code) in a cooperative
housing corporation (as defined in Section 216 of the Code).
Upon discovery by any of the Depositor, the Servicer or the Trustee of
a breach of any of the foregoing representations and warranties which materially
and adversely affects the value of a Mortgage Loan or the interest of the
Certificateholders (or which materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other parties
and to the Seller, which notice shall specify the date of discovery. Pursuant to
the Sale Agreement, the Seller shall within 90 days from the earlier of (i) the
date specified in the notice as the date of discovery of such breach or (ii) the
date the Seller otherwise discovers such breach, cure such breach, substitute a
Mortgage Loan pursuant to the provisions of Section 3.03 or, if the breach
relates to a particular Mortgage Loan, purchase such Mortgage Loan from the
Trustee at the Purchase Price. The Purchase Price for the purchased Mortgage
Loan shall be paid to the Servicer and shall be deposited by the Servicer in the
Collection Account promptly upon receipt, and, upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer, the Trustee
shall promptly release to the Seller the related Mortgage File, and the Trustee
shall execute and deliver such instruments of transfer or assignment as may be
provided to it by the Servicer, without recourse, as shall be necessary to vest
in the Seller or its designee, as the case may be, any Mortgage Loan released
pursuant hereto, and the Trustee shall have no further responsibility with
regard to such Mortgage Loan. It is understood and agreed that the obligation of
the Seller to cure, substitute or purchase any Mortgage Loan as to which such a
breach has occurred shall constitute the sole remedy respecting such breach
available to Certificateholders or the Trustee on behalf of Certificateholder.
44
Section 3.02. Representations and Warranties of the Servicer. The
Servicer represents and warrants to, and covenants with, the Trustee for the
benefit of the Certificateholders that as of the Closing Date:
(a) The Servicer is a corporation duly chartered and validly existing
in good standing under the laws of the state of its incorporation, and the
Servicer is duly qualified or registered as a foreign corporation in good
standing in such jurisdiction in which the ownership or lease or its properties
or the conduct of its business requires such qualification;
(b) The execution and delivery of this Agreement by the Servicer and
its performance and compliance with the terms of this Agreement will not violate
the Servicer's corporate charter or by-laws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other instrument
to which the Servicer is a party or which may be applicable to the Servicer or
any of its assets;
(c) This Agreement, assuming due authorization, execution and delivery
by the Trustee, the Master Servicer, and the Depositor, constitutes a valid,
legal and binding obligation of the Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law;
(d) The Servicer is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or operations
of the Servicer or its properties or might have consequences that would affect
its performance hereunder; and
(e) No litigation is pending or, to the best of the Servicer's
knowledge, threatened against the Servicer which would prohibit its entering
into this Agreement or performing its obligations under this Agreement. It is
understood and agreed that the representations and warranties set forth in this
Section 3.02 shall survive the issuance and delivery of the Certificates and
shall be continuing as long as any Certificate shall be outstanding or this
Agreement has been terminated.
Section 3.03. Option to Substitute. If the Seller is required to
repurchase any Mortgage Loan pursuant to Section 2.02 or 3.01, the Seller may,
at its option, within two years from the Closing Date, remove such defective
Mortgage Loan from the terms of this Agreement and substitute another mortgage
loan for such defective Mortgage Loan, in lieu of repurchasing such defective
Mortgage Loan. Any substitute Mortgage Loan shall (a) have a Principal Balance
at the time of substitution not in excess of the Principal Balance of the
removed Mortgage Loan (the amount of any difference, plus one month's interest
thereon at the Mortgage Rate borne by the removed Mortgage Loan, being paid by
the Seller and deemed to be a Principal Prepayment to be deposited by the
Servicer in the Collection Account), (b) have a Mortgage Rate not less than, and
not more than one percentage point greater than, the Mortgage Rate of the
removed Mortgage Loan (provided, however, that if the Mortgage Rate on the
substitute Mortgage Loan exceeds the Mortgage Rate on the removed Mortgage Loan,
the amount of that excess interest (the "Substitute Excess Interest") shall be
payable to the Residual Interest), (c) have a remaining term to stated maturity
not later than, and not more than one year less than, the remaining term to
stated maturity of the removed Mortgage Loan, (d) be, in the reasonable
determination of the Servicer, of the same type, quality and character
(including location of the Mortgaged Property or Underlying Mortgaged Property,
in the case of a Co-op Loan) as the removed Mortgage Loan as if the breach had
not occurred, (e) have a Loan-to-Value Ratio at origination no greater than that
of the removed Mortgage Loan and (f) be, in the reasonable determination of the
Seller, in material compliance with the representations and warranties contained
in the Sale Agreement and described in Section 3.01, as of the date of
substitution.
45
The Seller shall amend the Mortgage Loan Schedule to reflect the
withdrawal of the removed Mortgage Loan from this Agreement and the substitution
of such substitute Mortgage Loan therefor and shall send a copy of such amended
Mortgage Loan Schedule to the Trustee. The Sale Agreement provides that upon
such amendment the Seller shall be deemed to have made as to such substitute
Mortgage Loan the representations and warranties set forth in Section 3.01 as of
the date of such substitution, which shall be continuing as long as any
Certificate shall be outstanding or this Agreement has not been terminated, and
the remedies for breach of any such representation or warranty shall be as set
forth in Section 3.01. Upon such amendment, the Trustee shall review the
Mortgage File delivered to it relating to the substitute Mortgage Loan, within
the time and in the manner and with the remedies specified in Section 2.02,
except that for purposes of this Section 3.03 (other than the two-year period
specified in the first sentence of this Section), such time shall be measured
from the date of the applicable substitution. In the event of such a
substitution, accrued interest on the substitute Mortgage Loan for the month in
which the substitution occurs and any Principal Prepayments made thereon during
such month shall be the property of the Trust Fund, and accrued interest for
such month on the Mortgage Loan for which the substitution is made and any
Principal Prepayments made thereon during such month shall be the property of
the Seller. The principal payment on a substitute Mortgage Loan due on the Due
Date in the month of substitution shall be the property of the Seller, and the
principal payment on the Mortgage Loan for which the substitution is made due on
such date shall be the property of the Trust Fund.
[END OF ARTICLE III]
ARTICLE IV
THE CERTIFICATES
----------------
Section 4.01. The Certificates.
(a) The Class A, Class M and Class B Certificates shall be
substantially in the forms thereof included within Exhibits C, D, E and F and
shall, on original issue, be executed by the Depositor and authenticated by the
Trustee (or, if an Authenticating Agent has been appointed pursuant to Section
4.06, the Authenticating Agent) upon receipt by the Trustee of the documents
specified in Section 2.01, delivered to or upon the order of the Depositor.
(b) The Depository, the Depositor, the Paying Agent and the Trustee
have entered into a Depository Agreement dated as of November 28, 2001 (the
"Depository Agreement"). 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 Book-Entry
Certificates may not be transferred as provided in Section 4.02 except to a
successor to the Depository; (ii) ownership and transfers of registration of the
Book-Entry Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (iii) the Depository may collect
its usual and customary fees, charges and expenses from its Depository
Participants; (iv) the Trustee shall deal with the Depository, Depository
Participants and Indirect Participants as representatives of the Certificate
Owners of the Book-Entry Certificates for purposes of exercising the rights of
such Holders under this Agreement, and requests and directions for and votes of
such representatives shall not be deemed to be inconsistent if they are made
with respect to different Certificate Owners; and (v) 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 Participants and persons shown on the
books of such Indirect Participants as direct or indirect Certificate Owners.
The Depository Agreement provides that the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates.
46
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 it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(c) If (i)(A) the Depository advises the Depositor, the Paying Agent or
the Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository and (B) the Trustee, the
Paying Agent or the Depositor are unable after exercise of their reasonable best
efforts to locate a qualified successor or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to the
Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent, of the Book-Entry Certificates by the Depository for registration and
receipt by the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, of an adequate supply of certificates from the
Depositor, the Trustee or if the Paying Agent is appointed under Section 4.05,
the Paying Agent shall issue the Definitive Certificates based on information
received from the Depository. Neither the Depositor, the Master Servicer, the
Servicer, the Paying Agent 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.
(d) The Certificates (other than the Class A-R Certificate)shall be
issuable in the minimum original dollar denominations (and integral multiples of
$1.00 in excess of such amount) and aggregate original dollar denominations per
Class (or, in the case of the Class A-6, Class A-9 or Class A-X Certificates, in
the minimum denominations based on the Class A-6 Notional Amount, Class A-9
Notional Amount or Class A-X Notional Amount, respectively) as set forth in the
following table (except that one Certificate of each Class may be issued in a
different denomination). A single Class A-R Certificate will be issued in
definitive form in a $100 denomination.
47
Aggregate Original Certificate
Minimum Principal Balance of all
Original Certificates of the CUSIP
Class Denomination Indicated Class Number
---------------------- -------------- ------------------------------ -----------
Class A-1............. $ 25,000.00 $ 25,000,000.00 16162T E3 6
Class A-2............. $ 1,000.00 $ 29,600,000.00 16162T E4 4
Class A-3............. $ 1,000.00 $ 7,400,000.00 16162T E5 1
Class A-4............. $ 25,000.00 $ 24,125,563.00 16162T E6 9
Class A-5............. $ 25,000.00 $ 100,000,000.00 16162T E7 7
Class A-6............. $ 25,000.00 (1) 16162T E8 5
Class A-7............. $ 25,000.00 $ 54,300,000.00 16162T E9 3
Class A-8............. $ 1,000.00 $ 827,000.00 16162T F2 7
Class A-9............. $ 25,000.00 (1) 16162T F3 5
Class A-X............. $ 25,000.00 (1) 16162T F6 8
Class A-P(2) ......... $ 25,000.00 $ 162,050.00 16162T F4 3
Class A-R(3).......... $ 100.00 $ 100.00 16162T F5 0
Class M............... $ 25,000.00 $ 3,000,493.00 16162T F7 6
Class B-1............. $ 25,000.00 $ 2,500,411.00 16162T F8 4
Class B-2............. $ 25,000.00 $ 1,250,205.00 16162T F9 2
Class B-3............. $ 25,000.00 $ 625,102.00 16162T G2 6
Class B-4............. $ 25,000.00 $ 625,102.00 16162T G3 4
Class B-5............. $ 25,000.00 $ 625,106.13 16162T G4 2
---------------
(1) The Class A-6, Class A-9 and Class A-X Certificates are interest-only
certificates, have no principal balance and will bear interest on their
respective notional amounts (initially approximately $927,906.00,
$25,000,000.00 and $839,948.00, respectively).
(2) The Class A-P Certificates are entitled to payments of principal only.
(3) The Class A-R Certificate represents the Master Residual Interest and the
Subsidiary Residual Interest.
The Certificates shall be signed by manual or facsimile signature on
behalf of the Depositor by an officer of the Depositor. Certificates bearing the
manual or facsimile signatures of individuals who were at the time of signature
officers of the Depositor shall bind the Depositor, notwithstanding that such
individuals or any of them have ceased to be an officer prior to the
authentication and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a manual authentication by an officer of the Trustee (or if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent 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.
Section 4.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee or, if a Paying Agent has been appointed hereunder
pursuant to Section 4.05, the Paying Agent, shall cause to be kept a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided.
48
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee, or if a Paying Agent has been appointed
hereunder pursuant to Section 4.05, the Paying Agent maintained for such
purpose, the Depositor shall execute and the Trustee or if an Authenticating
Agent is appointed under Section 4.06, the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication by the Authenticating Agent.
(c) No transfer of a Class B-3, Class B-4 or Class B-5 Certificate
shall be made unless such transfer is made pursuant to an effective registration
statement or otherwise in accordance with the requirements under the Securities
Act of 1933, as amended. If such a transfer is to be made in reliance upon an
exemption from said Act, (i) the Depositor may require (except with respect to
the initial transfer of a Class B-3, Class B-4 or Class B-5 Certificate from
Credit Suisse First Boston Corporation and except if the transferee executes a
certificate substantially in the form of Exhibit H hereto) a written opinion of
independent counsel acceptable to and in form and substance satisfactory to the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to said Act and laws, which opinion of counsel shall not be
an expense of the Trust Fund, the Trustee, the Depositor, the Master Servicer or
the Servicer, and (ii) the Depositor shall require the transferee to execute a
certification substantially in the form of Exhibit H or Exhibit I.
(d) No transfer of an ERISA Restricted Certificate or the Class A-R
Certificate shall be made to any employee benefit plan subject to Section 406 of
ERISA or Section 4975 of the Code or materially similar provisions of applicable
federal, state or local law ("Similar Law"), or a Person acting on behalf of
such plan, except pursuant to Clause (i)(B) or Clause (ii) below or using the
assets of such plan. No transfer of an ERISA Restricted Certificate or the Class
A-R Certificate shall be made unless the Depositor shall have received either
(i) a representation letter, substantially in the form of Exhibit M, from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Depositor, to the effect that (A) such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or Similar Law, or a Person acting on behalf of any such plan or using the
assets of such plan, or alternatively, (B) in the case of an ERISA Restricted
Certificate only, such transferee is an insurance company and the source of
funds for the purchase of such Certificate is an "insurance company general
account" within the meaning of Prohibited Transaction Class Exemption 95-60
("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and the acquisition and
holding of such Certificate is exempt under PTCE 95-60, which representation
letter shall not be an expense of the Master Servicer, Trustee, the Depositor or
the Servicer, or (ii) in the case of an ERISA Restricted Certificate presented
for registration in the name of an employee benefit plan subject to ERISA or
Section 4975 of the Code or Similar Law (or comparable provisions of any
subsequent enactments) or a trustee of any such plan or any other Person who is
using the assets of any such plan to effect such acquisition, an Opinion of
Counsel or such other representation as required by and satisfactory to the
Depositor to the effect that the purchase or holding of such ERISA Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" pursuant to the Department of Labor Plan Asset Regulations set
forth in 29 C.F.R. ss.2510.3-101 and subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of ERISA or the
Code or Similar Law, will not constitute or result in a prohibited transaction
within the meaning of Section 406 or Section 407 of ERISA or Section 4975 of the
Code or Similar Law, and will not subject the Trustee, the Depositor or the
Servicer to any obligation in addition to those undertaken in this Agreement,
which opinion of counsel or other representation shall not be an expense of the
Master Servicer, Trustee, the Depositor or the Servicer.
(e) At the option of a Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of authorized denominations of
a like Class, upon surrender of the Certificate to be exchanged at any office or
agency of the Trustee, or if a Paying Agent has been appointed under Section
4.05, the Paying Agent, maintained for such purpose. Whenever the Certificate is
so surrendered for exchange, the Depositor shall execute and the Authenticating
Agent shall authenticate and deliver, the Certificate which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Authenticating Agent duly
executed by, the Holder thereof or his attorney duly authorized in writing.
49
(f) No service charge shall be made to the Holder for any transfer or
exchange of a Certificate, but the Master Servicer may require payment by the
Certificateholders of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of such
Certificate.
(g) All Certificates surrendered for transfer or exchange shall be
destroyed by the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, in accordance with the Trustee's or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent's, standard procedures.
(h) [Reserved].
(i) A Disqualified Organization is prohibited from acquiring beneficial
ownership of a Class A-R Certificate. Notwithstanding anything to the contrary
contained herein, (i) unless and until the Servicer shall have received an
Opinion of Counsel, satisfactory to it in form and substance, to the effect that
the absence of the conditions contained in this Section 4.02(i) would not result
in the imposition of federal tax upon either REMIC Pool or cause either REMIC
Pool to fail to qualify as a REMIC, no transfer, sale or other disposition of
the Class A-R Certificate (including for purposes of this section any beneficial
interest therein) may be made without the express written consent of the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
which consent is to be granted by the Certificate Registrar or, if no
Certificate Registrar is appointed, the Trustee only upon compliance with the
requirements of this Section and (ii) no transfer, sale or other disposition of
the Class A-R Certificate (or any beneficial interest therein) may be made to a
Person who is not a U.S. Person unless such Person furnishes the transferor and
the Certificate Registrar or, if no Certificate Registrar is appointed, the
Trustee, with a duly completed and effective Form W-8ECI (or any successor
thereto) or an Opinion of Counsel to the effect that the transfer will not be
disregarded for federal income tax purposes. As a condition to granting its
consent to a transfer of a Class A-R Certificate, the Certificate Registrar or,
if no Certificate Registrar is appointed, the Trustee shall require the proposed
transferee of such Certificate (including, in the case of the initial issuance
of the Class A-R Certificate, the initial Holder thereof) to execute a letter
and affidavit substantially in the form attached hereto as Exhibit K. In the
absence of a contrary instruction from the transferor of such Certificate,
declaration (11) in such affidavit may be left blank. If the transferor requests
by written notice to the Certificate Registrar or, if no Certificate Registrar
is appointed, the Trustee, prior to the date of the proposed transfer that one
of the two other forms of declaration (11) of such affidavit be used, then the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
shall require that such form of declaration (11) be included in such affidavit.
50
As a condition to the granting of the consent referred to in this
Section 4.02(i), prior to the transfer, sale, pledge, hypothecation or other
disposition of the Class A-R Certificate or any interest therein, the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
shall require that (1) the proposed transferee deliver to the Trustee its
taxpayer identification number and state, under penalties of perjury that such
number is the social security or employer identification number, as the case may
be, of the transferee or provide an affidavit under penalties of perjury stating
that as of the date of such transfer such transferee is not and has no intention
of becoming a Disqualified Organization; (2) the proposed transferee deliver to
the Trustee an affidavit stating (i) that such transferee is not acquiring such
Class A-R Certificate as an agent, broker, nominee, or middleman for a
Disqualified Organization, (ii) if the Class A-R Certificate is a "non-economic
residual interest" within the meaning of Treas. Reg. ss.1.860E-1(c)(2), (X) that
no purpose of the acquisition of the Class A-R Certificate is to avoid or impede
the assessment or collection of tax, (Y) that such transferee has historically
paid its debts as they came due and will continue to pay its debts as they come
due, and (Z) that such transferee represents that it understands that, as the
holder of the non-economic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and that the
transferee intends to pay taxes associated with holding the residual interest,
and (iii) unless the Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee consents to the transfer of the Class A-R Certificate to
a Person who is not a U.S. Person and who has furnished either a duly completed
and effective Form W-8ECI (or any successor thereto) or an Opinion of Counsel to
the effect that the transfer will not be disregarded for federal income tax
purposes, that it is a U.S. Person; (3) if so requested by the transferor in
written notice provided to the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee, prior to the date of the proposed transfer,
the proposed transferee deliver to the Trustee an affidavit that includes a
declaration made in the form of declaration (11) in the affidavit set forth in
Exhibit K requested by the transferor; and (4) the transferor deliver to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
a written certification that as of the date of such transfer it has no knowledge
and no reason to know that the affirmations described in clauses (1), (2) and
(3) were false. The Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee shall not grant the consent referred to in this Section
4.02(i) if it has actual knowledge that any statement made in the affidavit
issued pursuant to the preceding sentence is not true. Notwithstanding any
purported transfer, sale or other disposition of the Class A-R Certificate to a
Disqualified Organization, such transfer, sale or other disposition shall be
deemed to be of no legal force or effect whatsoever and such Disqualified
Organization shall not be deemed to be a Class A-R Certificateholder for any
purpose hereunder, including, but not limited to, the receipt of distributions
on such Class A-R Certificate. If any purported transfer shall be in violation
of the provisions of this Section 4.02(i) then the prior holder of the Class A-R
Certificate shall, upon discovery that the transfer of such Class A-R
Certificate was not in fact permitted by this Section 4.02(i), be restored to
all rights as a Holder thereof retroactive to the date of the purported transfer
of such Class A-R Certificate. The Trustee and the Servicer shall be under no
liability to any Person for any registration or transfer of a Class A-R
Certificate that is not permitted by this Section 4.02(i) or for making payments
due on such Class A-R Certificate to the purported Holder thereof or taking any
other action with respect to such purported Holder under the provisions of this
Agreement so long as the transfer was not registered under the written
certification of the Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee as described in this Section 4.02(i). The prior Holder
shall be entitled to recover from any purported Holder of a Class A-R
Certificate that was in fact not a permitted purported transferee under this
Section 4.02(i) at the time it became a purported Holder all payments made to
such purported Holder on such Class A-R Certificate; provided that the Servicer
shall not be responsible for such recovery. Each Class A-R Certificateholder, by
the acceptance of the Class A-R Certificate, shall be deemed for all purposes to
have consented to the provisions of this Section 4.02(i) and to any amendment to
this Agreement deemed necessary by counsel of the Trustee or the Servicer to
ensure that the Class A-R Certificate is not transferred to a Disqualified
Organization and that any transfer of such Class A-R Certificate will not cause
the imposition of a tax upon either REMIC Pool or cause either REMIC Pool to
fail to qualify as a REMIC. The restrictions on transfer of the Class A-R
Certificate will cease to apply and be void upon receipt by the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee of an
Opinion of Counsel to the effect that such restrictions on transfer are no
longer necessary to avoid the risk of material federal taxation to either REMIC
Pool or prevent either REMIC Pool from qualifying as a REMIC.
51
(j) The Master Servicer shall make available upon written request to
each Holder and each proposed transferee of a Class B-3, Class B-4 or Class B-5
Certificate such information as may be required to permit the proposed transfer
to be effected pursuant to Rule 144A under the Securities Act of 1933.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Trustee or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent, or the Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent, receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, such security or indemnity
as may be required by it to save it harmless, then, in the absence of notice to
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, that such Certificate has been acquired by a bona fide purchaser,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, shall 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 Class. Upon the issuance of any new Certificate under this Section,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, may require of the Certificateholder 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 connected therewith. Any replacement
Certificate of any Class issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest in
the distributions to which the Certificateholders of such Class are entitled, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time, and such mutilated, destroyed, lost or
stolen Certificate shall be of no force or effect under this Agreement, to the
extent permitted by law.
Section 4.04. Persons Deemed Owners. Prior to due presentation of a
Certificate of any Class for registration of transfer, the Depositor, the Master
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered on the Record Date as the owner of such
Certificate and the Percentage Interest in the distributions to which the
Certificateholders of such Class are entitled on the relevant date as the Holder
of such Certificate and the Percentage Interest represented by such Certificate
for the purpose of receiving remittances pursuant to Section 6.01 and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Paying Agent nor the Trustee shall be affected by notice to the contrary.
Section 4.05. Appointment of Paying Agent and Certificate Registrar;
Certificate Account. The Trustee may appoint a Paying Agent and a Certificate
Registrar hereunder, but such Paying Agent and Certificate Registrar shall not
be Depositor, the Seller, or an Affiliate of the Depositor or the Seller unless
such Paying Agent or such Certificate Registrar is the Corporate Trust
Department of Chase. In the event of any such appointment, on the Servicer
Remittance Date, the Servicer shall deposit or cause to be deposited with the
Paying Agent from funds on deposit in the Collection Account a sum up to the
Available Distribution Amount, such sum to be held in trust for the benefit of
Certificateholders in a segregated account (the "Certificate Account") which
shall be an Eligible Account in the name of "Citibank, N.A., as Trustee, in
trust for and for the benefit of the Certificateholders of Multi-Class Mortgage
Pass-Through Certificates, Chase Mortgage Finance Corporation, Series 2001-S7 -
Certificate Account". The Master Servicer shall cause the Paying Agent to
perform each of the obligations of the Paying Agent set forth herein and shall
be liable to the Trustee and the Certificateholders for failure of the Paying
Agent to perform such obligations. If the Paying Agent is a party other than the
Trustee, the Trustee shall have no liability in connection with the performance
or failure of performance of the Paying Agent. The Trustee designates the
Corporate Trust Department of Chase as the initial Paying Agent and the initial
Certificate Registrar. Only the Trustee may remove the Paying Agent and the
Certificate Registrar, and may do so at will.
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If, on any Distribution Date, the Paying Agent fails to distribute to
Certificateholders the amounts then on deposit in the Certificate Account for
the purposes specified herein, the Trustee shall be obligated promptly upon its
knowledge thereof to distribute such amounts to Certificateholders in the manner
and in such amounts based upon information provided by the Servicer; provided
that in no event shall the Trustee be obligated for purposes of this paragraph
to distribute to Certificateholders any amounts other than those on deposit in
the Certificate Account or expend any funds not reimbursable pursuant to Section
10.05 hereof, except as otherwise provided herein. Notwithstanding anything in
this Agreement to the contrary, the Trustee shall be liable to the Servicer and
the Certificateholders only for its negligence in connection with the withdrawal
of funds from the Certificate Account by the Trustee and the distribution of
such funds by the Trustee to Certificateholders pursuant to this paragraph.
The Master Servicer shall cause each Paying Agent other than the
Trustee to execute and deliver to the Master Servicer and the Trustee on the
Closing Date or, if subsequently appointed, on the date of appointment, a
written instrument executed by an officer of the Paying Agent in which such
Paying Agent shall agree with the Master Servicer and the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to such Certificateholders.
Section 1.06. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents (each, an
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or of any state,
having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities. If the Authenticating Agent is a party other than
the Trustee, the Trustee shall have no liability in connection with the
performance or failure of performance of the Authenticating Agent. The Trustee
hereby appoints Chase as the initial Authenticating Agent.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 4.06, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 4.06. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and any such compensation
shall be payable solely by the Trustee, without any right of reimbursement from
the Depositor, the Servicer or the Trust Fund.
[END OF ARTICLE IV]
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ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
----------------------------------------------
Section 5.01. Servicer to Service Mortgage Loans. The Servicer shall
service and administer the Mortgage Loans and shall have full power and
authority, acting alone or through Subservicers as provided in Section 5.02, to
do any and all things which it may deem necessary or desirable in connection
with such servicing and administration, all in accordance with Accepted
Servicing Practices. Without limiting the generality of the foregoing, the
Servicer in its own name or in the name of a Subservicer shall, pursuant to a
power of attorney granted hereby by the Trustee for such purposes, when the
Servicer or the Subservicer, as the case may be, believes it appropriate in its
best judgment, to execute and deliver, on behalf of 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; provided, however, that subject to the provisions of
this paragraph, the Servicer may allow a modification with respect to the
Mortgage Loan if the Servicer would take such action in the ordinary course of
its business if it were the owner of the Mortgage Loan. The Servicer may agree
to a modification of any Mortgage Loan (the "Relevant Mortgage Loan") upon the
request of the related Mortgagor, provided that (i) the modification is in lieu
of a refinancing and the Mortgage Rate on the Relevant Mortgage Loan, as
modified, is approximately a prevailing market rate of newly-originated mortgage
loans having similar terms, (ii) the aggregate of the adjusted bases of all
Modified Mortgage Loans (including the Relevant Mortgage Loans) plus the
aggregate adjusted bases of any assets that are not qualified mortgages or
permitted investments under Section 860G(a) of the Code that are assets of the
Trust Fund established hereunder at all times on any day is less than one
percent of the aggregate of the adjusted bases of all assets of the Trust Fund
(including such Modified Mortgage Loans) on such day, and (iii) the Servicer
purchases the Relevant Mortgage Loan from the Trust Fund as described below.
Effective immediately after such modification, and, in any event, on the same
Business Day on which the modification occurs, all right, title and interest of
the Trustee in and to the Modified Mortgage Loan shall automatically be deemed
transferred and assigned to the Servicer and all benefits and burdens of
ownership thereof, including without limitation the right to accrued interest
thereon from and including the date of modification and the risk of default
thereon, shall pass to the Servicer. To confirm such transfer and assignment,
the Servicer, as the servicer hereunder, as soon as practicable shall execute an
instrument of assignment of the Modified Mortgage Loan without recourse in
customary form to the Servicer in its individual capacity. The Servicer shall
deposit the Purchase Price for any Modified Mortgage Loan in the Collection
Account pursuant to Section 5.08. Upon receipt by the Trustee of written
notification of any such deposit signed by a Servicing Officer, the Trustee
shall release to the Servicer the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary more fully to vest in the Servicer any Modified
Mortgage Loan previously transferred and assigned pursuant thereto.
The Servicer shall furnish to the Trustee for execution and redelivery
to the Servicer or, at the request of the Servicer, a Subservicer, such
documents necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans and the Trustee shall not be responsible for the
Servicer's application thereof. The Servicer agrees to remain eligible as either
a FNMA or FHLMC seller/servicer, or both, for so long as it is the Servicer.
54
All Servicing Advances made by the Servicer in effecting the timely
payment of taxes, insurance and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to Certificateholders, be added to the amount owing under the Mortgage Loans,
notwithstanding that the terms of such Mortgage Loan so permit, and such
Servicing Advances shall be recoverable by the Servicer to the extent permitted
by Sections 5.09 and 5.23.
Section 5.02. Subservicing Agreements Between Servicer and
Subservicers; Enforcement of Subservicer's Obligations
(a) The Servicer may enter into Subservicing Agreements with
Subservicers for the servicing and administration of all or part of the Mortgage
Loans. References in this Agreement to actions taken or to be taken by the
Servicer in servicing the Mortgage Loans include actions taken or to be taken by
a Subservicer on behalf of the Servicer. Each Subservicing Agreement will be
upon such terms and conditions as are not inconsistent with this Agreement and
as the Servicer and the Subservicer have agreed. The Servicer hereby agrees to
notify the Trustee in writing promptly upon the appointment of any Subservicer,
except, Washington Mutual Bank, FA, which may be appointed as Subservicer by the
Servicer at any time without notice to the Trustee. For purposes of this
Agreement, the receipt by a Subservicer of any amount with respect to a Mortgage
Loan (other than amounts representing servicing compensation or reimbursement
for an advance) shall be treated as the receipt by the Servicer of such amount.
Any Subservicer shall deposit all such funds in an Eligible Account.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Subservicer appointed by it under the related Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements as appropriate,
and the pursuit of other remedies, shall be in such form and carried out to such
an extent and at such time as the Servicer, in its good faith business judgment,
would require were it the owner of the Mortgage Loans. The Servicer shall pay
the costs of such enforcement at its own expense but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Section 5.03. Successor Subservicers. The Servicer shall be entitled to
terminate any Subservicing Agreement that may exist in accordance with the terms
and conditions of such Subservicing Agreement and without any limitation by
virtue of this Agreement.
Section 5.04. Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Section 5.05. No Contractual Relationship Between Subservicer and
Trustee or Certificateholders. Any Subservicing Agreement that may be entered
into and any other transactions or services relating to the Mortgage Loans
involving a Subservicer in its capacity as such and not as an originator shall
be deemed to be between the Subservicer and the Servicer alone, and the Trustee,
the Master Servicer and Certificateholders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with
respect to the Subservicer.
55
Section 5.06. Termination of Subservicing Agreement. If the Servicer
shall for any reason no longer be the Servicer hereunder (including by reason of
any Event of Default), the Servicer shall thereupon terminate each Subservicing
Agreement that may have been entered into, and the Trustee, its designee or the
successor servicer and the Trustee shall not be deemed to have assumed any of
the Servicer's interest therein or to have replaced the Servicer as a party to
any such Subservicing Agreement.
Section 5.07. Collection of Mortgage Loan Payments. Continuously from
the date hereof until the principal and interest on all Mortgage Loans are paid
in full, the Servicer will proceed diligently to collect all payments due under
the Mortgage Loans when the same shall become due and payable; provided,
however, that the Servicer may elect, to the extent consistent with Accepted
Servicing Practices, to waive any late payment charge and shall, to the extent
such procedures shall be consistent with this Agreement, follow such collection
procedures as it follows with respect to conventional mortgage loans held in its
own portfolio. Any such arrangements shall not diminish or otherwise affect the
Servicer's obligation to make Advances pursuant to Section 6.03.
Section 5.08. Establishment of Collection Account; Deposit in
Collection Account.With respect to all of the Mortgage Loans, the Servicer shall
segregate and hold all funds collected and received pursuant to a Mortgage Loan
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Collection Accounts for the benefit of the
Certificateholders (collectively, the "Collection Account") which are Eligible
Accounts, in the form of a trust account, in the name of "Citibank, N.A., as
Trustee, in trust for and for the benefit of the Certificateholders of
Multi-Class Mortgage Pass-Through Certificates, Washington Mutual Mortgage
Securities Corp., as Servicer, Chase Mortgage Finance Corporation, Series
2001-S7 - Collection Account." The Collection Account shall be established with
a commercial bank, a savings bank or a savings and loan association. The
Servicer may invest, or cause the institution maintaining the Collection Account
to invest, moneys in the Collection Account in Eligible Investments, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment and shall not be sold or disposed of prior
to its maturity. All income and gain realized from any such investment shall be
for the benefit of the Servicer as additional compensation and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments (to the extent not offset by income from
other such investments) shall be deposited in the Collection Account by the
Servicer out of its own funds immediately as realized; provided, however, that
if the Trustee becomes the Servicer, the Trustee shall not be required to
deposit the amount of any loss incurred prior to it becoming the Servicer.
The Servicer shall deposit or cause to be deposited in the
Collection Account on a daily basis (and not later than the second Business Day
following receipt), and retain therein:
(i) All payments which were received after the Cut-off Date
on account of principal of the Mortgage Loans (other than the principal
portion of Monthly Payments due on or before the Cut-off Date), and all
Principal Prepayments collected on or after the Cut-off Date;
(ii) All payments which were received after the Cut-off Date
on account of interest on the Mortgage Loans (net of the Servicing
Fee)(other than the interest portion of Monthly Payments due on or
before the Cut-off Date);
(iii) Net Liquidation Proceeds;
56
(iv) All Insurance Proceeds received by the Servicer under
any title, hazard or other insurance policy, including amounts required
to be deposited pursuant to Sections 5.16 and 5.20, other than proceeds
to be held in the Escrow Account or applied to the restoration or
repair of the Mortgaged Property (or Underlying Mortgaged Property, in
the case of a Co-op Loan) or released to the Mortgagor in accordance
with the Servicer's normal servicing procedures or otherwise applied or
held as required by applicable law;
(v) All awards or settlements in respect of condemnation
proceedings affecting any Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan), which are not released to the
Mortgagor in accordance with the Servicer's normal servicing
procedures;
(vi) All Repurchase Proceeds;
(vii) All Advances made by the Servicer pursuant to Section
6.03;
(viii) All amounts representing revenues under the insurance
provided pursuant to Section 5.19 to the extent of any losses borne by
any Certificateholder;
(ix) All revenues from any Mortgaged Property acquired by
the Servicer by foreclosure or deed in lieu of foreclosure net of any
Servicing Advances with respect to such Mortgaged Property; and
(x) Any other amounts required to be deposited therein
pursuant to this Agreement.
The Servicer shall maintain accounting records on a Mortgage Loan by
Mortgage Loan basis with respect to the Collection Account. The Servicer shall
give notice to the Trustee, the Master Servicer and the Depositor and each
Rating Agency of any change in the location of the Collection Account, prior to
the use thereof. Notwithstanding anything to the contrary herein, no Monthly
Payment or any portion thereof shall be permitted to remain in the Collection
Account for more than 12 months. Any Monthly Payment or any portion thereof that
has remained in the Collection Account for 12 months shall be deemed a Principal
Prepayment and distributed to Certificateholders pursuant to the provisions of
this Agreement on the Distribution Date immediately following the end of such 12
month period.
Section 5.09. Permitted Withdrawals from the Collection Account. The
Servicer may, from time to time, withdraw funds from the Collection Account for
the following purposes:
(i) to reimburse itself for Advances made pursuant to
Section 6.03 (including amounts to reimburse the related Subservicer
for advances made pursuant to the applicable Subservicing Agreement),
the Servicer's and the related Subservicer's right to receive
reimbursement pursuant to this subclause (i) being limited to amounts
received on particular Mortgage Loans serviced by the Servicer which
represent Late Collections (net of the Servicing Fees) with respect to
those particular Mortgage Loans;
(ii) to pay itself the Servicing Fee;
(iii) to reimburse itself for unreimbursed Servicing
Advances, or to pay the related Subservicer any unreimbursed Servicing
Advances, the Servicer's right to receive reimbursement or make
payments to the Subservicer pursuant to this subclause (iii) with
respect to any Mortgage Loan serviced by the Servicer being limited to
related Liquidation Proceeds, Insurance Proceeds, and condemnation
awards;
57
(iv) to reimburse itself (or the related Subservicer) or the
Depositor for expenses incurred by and recoverable by or reimbursable
to it pursuant to Section 5.01 or 5.16;
(v) to reimburse itself (or the related Subservicer) for
any Nonrecoverable Advances;
(vi) to pay to itself (or the related Subservicer) income
earned on the investment of funds deposited in the Collection Account;
(vii) to make deposits into the Certificate Account in the
amounts and in the manner provided for herein;
(viii) to make payments to itself or others pursuant to any
provision of this Agreement, and to clear and terminate the Collection
Account upon the termination of this Agreement; and
(ix) to withdraw amounts deposited in error.
Section 5.10. Establishment of Escrow Account; Deposits in Escrow
Account. With respect to those Mortgage Loans on which the Servicer or any
Subservicer collects Escrow Payments, if any, the Servicer shall, and shall
cause any Subservicer to, segregate and hold all funds collected and received
pursuant to each such Mortgage Loan which constitute Escrow Payments separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of trust accounts. Such Escrow
Accounts shall be established with a commercial bank, a mutual savings bank or a
savings and loan association the deposits of which are insured by the FDIC in a
manner which shall provide maximum available insurance thereunder, and which may
be drawn on by the Servicer. The Servicer shall give notice to the Trustee of
the location of any Escrow Account, and of any change thereof, prior to the use
thereof. Nothing in this paragraph shall be deemed to require the Servicer to
collect Escrow Payments in the absence of a provision in the related Mortgage
requiring such collection.
The Servicer shall deposit, or cause to be deposited, in any Escrow
Account or Accounts on a daily basis, and retain therein, (i) all Escrow
Payments collected on account of any Mortgage Loans serviced by the Servicer,
for the purpose of effecting timely payment of any such items as required under
the terms of this Agreement and (ii) all amounts representing proceeds of any
hazard insurance policy which are to be applied to the restoration or repair of
any related Mortgaged Property (or Underlying Mortgaged Property, in the case of
a Co-op Loan). The Servicer shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
are set forth in Section 5.11. The Servicer shall be entitled to retain any
interest paid on funds deposited in any Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the related Mortgagor and, to the extent required by law, the Servicer shall pay
interest on escrowed funds to the related Mortgagor notwithstanding that the
Escrow Account is non-interest-bearing or that interest paid thereon is
insufficient for such purposes.
Section 5.11. Permitted Withdrawals from Escrow Account. Withdrawals
from any Escrow Account or Accounts may be made by the Servicer only (i) to
effect timely payments of ground rents, taxes, assessments, water rates,
Standard Hazard Policy premiums, or other items constituting Escrow Payments for
the related Mortgage, (ii) to reimburse the Servicer for any Servicing Advance
made by the Servicer, with respect to a related Mortgage Loan but only from
amounts received on the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder, (iii) to refund to any Mortgagor any
funds found to be in excess of the amounts required under the terms of the
related Mortgage Loan or under applicable law, (iv) for application to
restoration or repair of the property subject to the related Mortgage, (v) to
pay to the Servicer, or to the Mortgagor to the extent required by law, any
interest paid on the funds deposited in the Escrow Account, (vi) to clear and
terminate the Escrow Account on the termination of this Agreement or (vii) to
withdraw amounts deposited in error.
58
Section 5.12. Payment of Taxes, Insurance and Other Charges. With
respect to each Mortgage Loan, the Servicer shall maintain, or cause to be
maintained, accurate records reflecting any delinquencies or nonpayments with
regard to taxes, assessments and Standard Hazard Policy premiums. The Servicer
assumes full responsibility for ensuring the payment of all such bills and shall
effect payments of all such bills irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make advances from its own funds to effect such payments.
Section 5.13. Transfer of Accounts. The Servicer may transfer the
Collection Account or Escrow Accounts to an Eligible Account maintained with a
different depository institution from time to time.
Section 5.14. [Reserved].
Section 5.15. Maintenance of the Primary Insurance Policies. The
Servicer shall take, or permit any related Subservicer to take, any action which
would result in non-coverage under any applicable Primary Insurance Policy of
any loss which, but for the actions of the Servicer or Subservicer, would have
been covered thereunder. Except as otherwise required by applicable law, to the
extent coverage is available and until the loan-to-value ratio of the related
Mortgage Loan is reduced to 80%, the Servicer shall keep or cause to be kept in
full force and effect each such Primary Insurance Policy in an amount equal to
the amount by which the unpaid principal balance of the related Mortgage Loan
exceeds 75% of the value (as described in the definition of Loan-to-Value Ratio)
of the related Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op Loan). The Servicer shall cancel or refuse to renew any such Primary
Insurance Policy or consent to any related Subservicer canceling or refusing to
renew any such Primary Insurance Policy applicable to a Mortgage Loan
subserviced by it, that is in effect at the date of the initial issuance of the
Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for such canceled or non-renewed policy is
maintained with an insurer whose claims-paying ability is rated at least as high
as the original insurer or is acceptable to each Rating Agency as confirmed in
writing by each such Rating Agency, unless otherwise required by law.
Section 5.16. Maintenance of Standard Hazard Policies.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
(other than a Co-op Loan) a Standard Hazard Policy with extended coverage as is
prudent in the area where the Mortgaged Property is located in an amount which
is equal to the greater of (i) the lesser of (A) 100% of the maximum insurable
value of the improvements securing such Mortgage Loan or (B) the principal
balance owing on such Mortgage Loan, or (ii) such amount required to prevent the
Mortgagor or mortgagee from becoming a co-insurer. If the Mortgaged Property is
in an area identified at the time of origination in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding Principal Balance of the Mortgage Loan, (ii) the full
insurable value or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, of any Mortgage Loan, fire and hazard insurance with extended
coverage in an amount which is not less than the lesser of (i) the outstanding
principal balance of the Mortgage Loan or (ii) the maximum insurable value of
the improvements which are a part of such property, liability insurance, and, to
the extent available, flood insurance in an amount as provided above. Any
amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or property acquired in liquidation of the Mortgage Loan, or released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited, subject to applicable law, in the Collection Account. It is
understood and agreed that no earthquake or other additional insurance need be
required by the Servicer of any Mortgagor or maintained 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. All such Standard Hazard Policies and other policies shall
be endorsed with standard mortgagee clauses with loss payable to the Servicer or
its designee. Any such Standard Hazard Policies or other policies may be in the
form of blanket policies; provided, however, that in the event of any claim
arising in connection with a hazard loss the Servicer shall be obligated, in the
case of blanket insurance policies, to deposit in the Collection Account any
amount not payable under such blanket policy because of a deductible clause in
such policy and not otherwise payable under an individual policy. The Servicer
shall interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent; provided, however, that the Servicer shall accept
any such insurance policies from insurance companies unless such companies are
acceptable insurers in the discretion of the Servicer.
59
(b) Any cost incurred by the Servicer in maintaining any of the
foregoing insurance shall not, for the purpose of calculating monthly
distributions to Certificateholders, be added to the amount owing under the
related Mortgage Loan, notwithstanding that the terms of the related Mortgage
Loan so permit. Such costs (other than the costs of maintaining a blanket hazard
insurance policy not attributable to a specific Mortgaged Property) shall be
recoverable by the Servicer from the Mortgagor or out of Insurance Proceeds or
Liquidation Proceeds or to the extent permitted by Section 5.09.
Section 5.17. [Reserved].|
Section 5.18. [Reserved].
Section 5.19. Fidelity Bond and Errors and Omissions Insurance|. The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting on behalf of the
Servicer in any capacity with regard to the Mortgage Loans to handle funds,
money, documents and papers relating to such Mortgage Loans. Any such fidelity
bond and errors and omissions insurance shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons and shall be maintained at a level
acceptable to FNMA. No provision of this Section 5.19 requiring such fidelity
bond and errors and omissions insurance shall diminish or relieve the Servicer
from its duties and obligations as set forth in this Agreement. Upon request of
the Trustee, the Servicer shall cause to be delivered to the Trustee a
certification evidencing coverage under such fidelity bond and insurance policy.
Promptly upon receipt by the Servicer of any notice from the surety or the
insurer that such fidelity bond or insurance policy has been terminated or
modified in a materially adverse manner, the Servicer shall notify the Trustee,
the Master Servicer and each Rating Agency of any such termination or
modification.
Section 5.20. Collections under Insurance Policies; Enforcement of
Due-On-Sale Clauses; Assumption Agreements.
(a) In connection with its activities as administrator and servicer of
the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Trustee and the Certificateholders, claims to the insurer under any Standard
Hazard Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any insurance policies. Pursuant to Section
5.08, the Servicer shall deposit Insurance Proceeds in the Collection Account.
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(b) When any Mortgaged Property is conveyed by the Mortgagor, the
Servicer shall enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted by such Mortgage Note or Mortgage, applicable
law and governmental regulations. Subject to the foregoing, the Servicer is
authorized to take or enter into an assumption or substitution agreement from or
with the Person to whom such property has been or is about to be conveyed. In
connection with such assumption or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual and as it applies to mortgage loans owned solely by it.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall be deemed to be in default, breach or any other
violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the Mortgaged Property or any assumption of a Mortgage Loan by
operation of law which the Servicer in good faith determines it may be
restricted by law from preventing, for any reason whatsoever.
(c) Subject to the Servicer's duty to enforce any due-on-sale clause to
the effect set forth in Section 5.20(b), in any case in which a Mortgaged
Property is to be conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage, the Servicer shall so notify the Trustee by
forwarding to the Trustee the original copy of such assumption or substitution
agreement, which copy shall be added by the Trustee to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
In connection with any such assumption, modification agreement or substitution
agreement, the interest rate of the related Mortgage Note shall not be changed,
the principal amount of the Mortgage Note shall not be increased or decreased
and the maturity of the Mortgage Note shall not be extended, nor shall it be
shortened by more than one year. Any fee collected by the Servicer for entering
into an assumption or substitution of liability agreement with respect to such
Mortgage Loan shall be retained by the Servicer as additional servicing
compensation.
Section 5.21. Income and Realization from Defaulted Mortgage Loans. The
Servicer, on behalf of the Trustee, shall foreclose upon or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 5.07, shall manage, conserve, protect and operate such Mortgaged
Properties for the purposes of their prompt disposition and sale, and shall
dispose of such Mortgaged Properties on such terms and conditions as it deems in
the best interests of the Certificateholders. The Servicer shall sell such
property prior to the close of the third calendar year beginning after the year
in which such foreclosure or conversion occurs or such longer period as would
not prevent such Mortgaged Property from constituting "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code. In connection with such
activities, the Servicer shall follow such practices and procedures as it shall
deem necessary or advisable, as shall be normal and usual in its general
mortgage servicing activities, including its management of foreclosed properties
for a temporary period as contemplated herein. The foregoing is subject to the
provisions of Section 5.28 of this Agreement and to the proviso that the
Servicer shall be required to expend its own funds in connection with any
management, foreclosure or towards the restoration of any property unless it
shall determine that such management, restoration or foreclosure will increase
the Liquidation Proceeds of the Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 5.09). The Servicer shall be permitted to earn income with respect to
any Mortgaged Properties, provided such income does not constitute "net income
from foreclosure property" within the meaning of Section 860G(c) of the Code.
The income earned from the management of such Mortgaged Properties, net of
reimbursement to the Servicer for expenses (including any taxes) incurred in
connection with such management, shall be applied to the payment of principal of
and interest on the related defaulted Mortgage Loans (with interest accruing and
principal amortizing as though such Mortgage Loans were still current) and all
such income shall be deemed, for all purposes in this Agreement, to be payments
on account of principal and interest on the related Mortgage Notes and shall be
deposited into the Collection Account. To the extent the income received is in
excess of the amount attributable to amortizing principal and accrued interest
at the Net Mortgage Rate on the related Mortgage Loan, such excess shall be
deposited in the Collection Account.
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The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, the
Resources Conservation and Recovery Act of 1976, as amended, or other federal,
state or local environmental legislation, on a Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) relating to a Mortgage Loan in
determining whether to foreclose upon or otherwise comparably convert the
ownership of such property. To the extent that the Servicer has actual knowledge
of any such substance or waste, it shall consult with the Trustee regarding the
appropriate course of action. The Servicer shall institute foreclosure actions
with respect to a property containing substance or waste as described above if
it reasonably believes that such action would not be consistent with its
servicing standards, and in no event shall the Servicer manage, operate or take
any other action with respect thereto which the Servicer in good faith believes
will result in "clean-up" or other liability under applicable law. The net
income from the rental or sale of a REO Property shall be deposited in the
Collection Account within two (2) Business Days after receipt thereof by the
Servicer.
Section 5.22. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Servicer of a notification that payment in full will be
made in a manner customary for such purposes, the Servicer shall immediately
notify the Trustee (if the Trustee holds the related Mortgage File) by a
certification (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 5.08 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Mortgage File. Upon receipt of such certification and request,
within five Business Days the Trustee shall release the related Mortgage File to
the Servicer and execute and deliver to the Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such other instruments releasing the lien of the Mortgage as have been provided
by the Servicer to the Trustee, together with the Mortgage Note with written
evidence of cancellation thereon, and the Trustee shall have no further
responsibility with respect to said Mortgage File. Upon any such payment in
full, or the receipt of such notification, the Servicer is authorized to procure
from the Trustee under the deed of trust which secured the Mortgage Note, if
any, a deed of full reconveyance covering the property encumbered by such deed
of trust, which assignment of deed of trust, except as otherwise provided by any
applicable law, shall be recorded by the Servicer in the appropriate land
records in the jurisdiction in which the assignment of deed of trust is
recorded, or, as the case may be, to procure from the Trustee an instrument of
satisfaction or, if the Mortgagor so requests, an assignment without recourse,
which deed of reconveyance, instrument of satisfaction or assignment shall be
delivered by the Servicer to the Person or Persons entitled thereto. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or to the Trustee.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Servicer shall deliver to the Trustee a
certificate of a Servicing Officer requesting that possession of the Mortgage
File be released to the Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the insurance policies
required by this Agreement. With such certificate, the Servicer shall require
that the Trustee release the Mortgage File, and, within five (5) Business Days,
the Trustee shall deliver the Mortgage File or any document therein to the
Servicer. The Servicer shall cause each Mortgage File so released to be returned
to the Trustee when the need therefor by the Servicer no longer exists, unless
(i) the Mortgage Loan has been liquidated and the Net Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account or
(ii) the Mortgage File has been delivered to an attorney, or to a public trustee
or other public official as required by law, for purposes of initiating or
pursuing legal action or other proceedings for the foreclosure of the Mortgaged
Property either judicially or non-judicially, and the Servicer has delivered to
the Trustee a certificate of a Servicing Officer in the form of Exhibit L hereto
certifying as to the name and address of the Person to which such Mortgage File
was delivered and the purpose or purposes of such delivery.
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(c) Upon written request of the Servicer, the Trustee shall execute and
deliver to the Servicer any court pleadings, requests for trustee's sale or
other documents prepared by and delivered by the Servicer to the Trustee
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Together with such documents or
pleadings, the Servicer shall deliver to the Trustee a certificate of a
Servicing Officer requesting that such pleadings or documents be executed by the
Trustee and certifying as to the reason such documents or pleadings are required
and that the execution and delivery thereof by the Trustee will not invalidate
any insurance coverage under the insurance policies required under this
Agreement or invalidate or otherwise affect the lien of the Mortgage, except for
the termination of such a lien upon completion of the foreclosure or trustee's
sale.
Section 5.23. Servicing and Other Compensation. The Servicer, as
compensation for its activities hereunder, shall be entitled to receive, on or
prior to each Distribution Date, the amounts provided for as the Servicing Fee
with respect to Mortgage Loans and as reimbursement for Nonrecoverable Advances,
Servicing Advances and reimbursement for Advances with respect to Mortgage
Loans, all as specified by Section 5.09. The amount of compensation or
reimbursement provided for shall be accounted for on a Mortgage Loan-by-Mortgage
Loan basis.
Additional servicing compensation in the form of assumption fees,
prepayment fees and late payment charges shall be retained by the Servicer with
respect to Mortgage Loans, to the extent permitted by applicable law. The
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including the fees and expenses of the
Trustee and any Subservicer) and shall not be entitled to reimbursement therefor
except as specifically provided in Sections 5.09 and 5.21.
Section 5.24. 1934 Act Reports.
(a) The Paying Agent shall, on behalf of the Trust, make all filings
("Periodic Reports") required to be made by the Depositor or the Trust (other
than the filings relating to the closing of this transaction) with respect to
the Class A Certificates, the Class M Certificates, the Class B-1 Certificates
and the Class B-2 Certificates pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder.
(b) Within thirty (30) days after the beginning of the first fiscal
year during which the Trust's obligation to file Periodic Reports pursuant to
the Exchange Act shall have been suspended, the Depositor may prepare, or cause
to be prepared, a notice on Commission Form 15 ("Form 15") and is hereby
authorized to and shall execute such Form 15 on the Trust's behalf; provided,
however, that the Depositor shall be under no obligation to prepare such notice
if the number of Certificateholders exceeds 300. The Master Servicer shall file
any notice on Form 15 with the Commission in accordance with the provisions of
Rule 15d-6 under the Exchange Act.
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Section 5.25. Annual Statement as to Compliance. The Servicer will
deliver to the Depositor and the Trustee on or before April 30 of each year,
beginning with April 30 in the year which begins not less than three (3) months
after the Closing Date, an Officers' Certificate stating, as to each signer
thereof, that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement has been made
under such officer's supervision, (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Subservicer has fulfilled its obligations under its
Subservicing Agreement in all material respects, or if there has been a material
default in the fulfillment of such obligations, specifying such default known to
such officers and the nature and status thereof. Copies of such statement shall
be provided to the Master Servicer and to each Rating Agency by the Servicer.
Copies of such statement shall also be provided by the Servicer to any
Certificateholder upon request. If the Servicer shall fail to provide such
copies and a Responsible Officer of the Trustee is aware that the Servicer has
not so provided copies, the Trustee shall provide such copies at the Servicer's
expense if the Trustee has received such statement.
Section 5.26. Annual Independent Public Accountants' Servicing Report.
On or before April 30 of each year, beginning with April 30 in the year which
begins not less than three (3) months after the Closing Date, the Servicer at
its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Depositor and the Trustee to the effect that in connection with
the firm's examination of the financial statements as of the previous December
31 of WMMSC's parent corporation which shall include a limited examination of
WMMSC's financial statement, nothing came to such firm's attention that
indicated that the Servicer was not in compliance with Section 5.08, Section
5.09, Section 5.10, Section 5.11, Section 5.23 and Section 5.25 of this
Agreement, except for (i) such exceptions as such firm believes to be
immaterial, and (ii) such other exceptions as set forth in such statement.
Copies of such statement shall be provided to the Master Servicer and to each
Rating Agency, and, upon request, to the Certificateholders, by the Servicer, or
by the Trustee at the Servicer's expense if the Trustee has received such
statement and the Servicer shall fail to provide such copies and the Trustee is
aware that the Servicer has not so provided copies.
Section 5.27. Access to Certain Documentation; Rights of the Depositor
in Respect of the Servicer. The Servicer shall provide access to the Trustee,
the Master Servicer, Certificateholders which are savings and loan associations,
banks or insurance companies or examiners of any federal or state banking or
insurance regulatory authority to the documentation regarding the Mortgage Loans
if so required by applicable regulations of any regulatory authority, such
access to be afforded subject to reimbursement for expenses without charge but
only upon reasonable request and during normal business hours at the offices of
the Servicer designated by it. The Depositor may, but is not obligated to,
enforce the obligations of the Servicer under this Agreement. The Depositor
shall not assume any responsibility or liability for any action or failure to
take action by the Servicer and is not obligated to supervise the performance of
the Servicer under this Agreement or otherwise.
Section 5.28. REMIC-Related Covenants. For as long as the Trust Fund
shall exist, the Servicer, the Master Servicer and the Trustee shall act in
accordance herewith to assure continuing treatment of each REMIC Pool as a
REMIC. In particular:
(a) Neither the Servicer nor the Master Servicer shall create, or
permit the creation of, any "interests" in either REMIC Pool within the meaning
of Section 860G(a) of the Code other than the "regular interests" in each REMIC
Pool designated as such in Section 2.04(a), the Subsidiary Residual Interest and
the Master Residual Interest;
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(b) As of all times as may be required by the Code, the Servicer and
the Master Servicer will ensure that substantially all of the assets of each
REMIC Pool will consist of "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code. The Master Servicer and the Trustee, upon the direction
of the Master Servicer, also will maintain records that are sufficient to
indicate each REMIC Pool's compliance with applicable requirements of the Code
(and applicable Proposed, Temporary or final Treasury Regulations) relating to
the assets held by such REMIC Pool. Further, the Servicer shall permit and the
Trustee shall not accept the transfer or substitution of any Mortgage Loan other
than pursuant to Section 3.03, 5.01 or 5.21 of this Agreement, and the Servicer
shall, in any case, permit substitution later than two (2) years from the
Closing Date unless the Servicer and the Trustee have received an Opinion of
Counsel, which will not be an expense of the Trust Fund, that such transfer or
substitution would not adversely affect the REMIC status of either REMIC Pool or
would not otherwise be prohibited by this Agreement;
(c) The Servicer and the Master Servicer shall ensure that neither
REMIC Pool receives a fee or other compensation for services and that neither
REMIC Pool receives any income from assets other than "qualified mortgages"
within the meaning of Section 860G(a)(3) of the Code or "permitted investments"
within the meaning of Section 860G(a)(5) of the Code, and shall take whatever
action it deems necessary to avoid any material tax imposed by the Code on
either REMIC Pool;
(d) The Trustee shall not sell or permit the sale of all or any portion
of the Mortgage Loans or of any Eligible Investment unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee has received an Opinion of Counsel, which will not be an expense of the
Trust Fund or the Trustee, to the effect that such sale (i) is pursuant to a
"qualified liquidation" as defined in Section 860F(a)(4) of the Code and as
described in Section 11.01 hereof, or (ii) would not be treated as a "prohibited
transaction" within the meaning of Section 860F(a)(2) of the Code that results
in the realization of a material amount of gain or loss for federal income tax
purposes;
(e) The Trustee shall not accept any contribution to either REMIC Pool
after the Startup Day without an Opinion of Counsel (which shall not be an
expense of the Trustee) that such contribution is included within the exceptions
provided in Section 860G(d)(2) of the Code and, therefore, will not be subject
to the tax imposed by Section 860G(d)(1) of the Code; and
(f) Notwithstanding anything to the contrary in this Agreement, the
Master Servicer and the Trustee, at the direction of the Master Servicer, shall
take any other action or refuse to take any action otherwise required (including
adjusting the Purchase Price for any Mortgage Loan) where the Master Servicer
deems such action or inaction reasonably necessary to ensure the REMIC status of
either REMIC Pool under the Code and applicable regulations or to avoid the
imposition of any material tax liability on either REMIC Pool that will affect
amounts distributable to the Certificateholders.
(g) In the event that any applicable federal, state or local tax,
including interest, penalties or assessments, additional amounts or additions to
tax, is imposed on either REMIC Pool, such tax shall be treated in the same
manner as a Realized Loss and shall be charged against amounts otherwise
distributable to the Holders of the Certificates, except as provided in the last
sentence of this Section 5.28 (g). The Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall withdraw from the
Collection Account sufficient funds to pay or provide for the payment of, and to
actually pay, such tax as is estimated to be legally owed by (but such
authorization shall not prevent the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent from contesting, at the expense
of the Trust Fund (other than as a consequence of a breach of its obligations
under this Agreement), any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent is hereby authorized to and shall segregate, into a
separate non-interest bearing account, the net income from any "prohibited
transaction" under Code Section 860F(a), the amount of any taxable contribution
to the Trust Fund after the Startup Day that is subject to tax under Code
Section 860G(d), and 35% of any estimated "net income from foreclosure property"
under Section 860G(c) and use such income or amount, to the extent necessary, to
pay such tax. To the extent that any such tax is paid to the Internal Revenue
Service or applicable state or local tax authorities, the Trustee or a Paying
Agent has been appointed under Section 4.05, the Paying Agent shall retain an
equal amount from future amounts otherwise distributable to the Holder of the
Class A-R Certificate and shall distribute such retained amounts to the Holders
of the other Classes of Certificates, to the extent they remain outstanding,
until they are fully reimbursed for any amount of such taxes previously charged
to the then Holder of the Class R Certificate. Neither the Trustee, the Master
Servicer nor the Servicer shall be responsible for any taxes imposed on either
REMIC Pool except to the extent such taxes arise as a consequence of a breach of
their respective obligations under this Agreement.
[END OF ARTICLE V]
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ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
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Section 6.01. Distributions.
(a) On each Distribution Date, the Paying Agent shall apply an amount
on deposit in the Certificate Account equal to the Available Distribution Amount
(net of the Master Servicer Fee) in the following order of priority:
(i) to the Non-PO Class A Certificateholders, all
distributable amounts up to the sum of (A) the Aggregate Class A
Interest Accrual Amount and (B) the Aggregate Class A Interest
Shortfall;
(ii) the balance, if any, of the Available Distribution Amount
shall be distributed first, pro rata (in accordance with the maximum
amounts distributable in accordance with this paragraph (ii)) and
concurrently between (A) the Non-PO Class A Certificateholders, the
amounts distributable pursuant to paragraph (b)(ii)(A) below, up to the
Non-PO Class A Optimal Principal Amount and (B) the Class A-P
Certificateholders, the Class A-P Amount, in accordance with paragraph
(b)(ii)(B) below and second, to the Class A-P Certificateholders, the
Class A-P Shortfall Amount, in accordance with paragraph (b)(iii)
below;
(iii) to the Class M Certificateholders, the balance, if any, of
the Available Distribution Amount after making the distributions
provided for in paragraphs (i) and (ii) above, in accordance with, and
up to the amount calculated pursuant to, Section 6.01(c) below;
(iv) to the Class B Certificateholders, the balance, if any, of
the Available Distribution Amount after making the distributions
provided for in paragraphs (i) through (iii) above, in accordance with,
and up to the amounts calculated pursuant to, Section 6.01(d) below;
and
(v) to the Class A-R Certificateholders the balance, if any,
of the Available Distribution Amount remaining after the distributions
provided for in paragraphs (i) through (iv) above.
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(b) Amounts payable to the Class A Certificateholders on any
Distribution Date shall be distributed as follows:
(i) to the extent the amount available for distribution
pursuant to paragraph (a)(i) above is sufficient:
(A) to the Class A-1 Certificateholders, (1) the Class A-1
Interest Accrual Amount plus (2) the Class A-1 Shortfall from the
preceding Distribution Date;
(B) to the Class A-2 Certificateholders, (1) the Class A-2
Interest Accrual Amount plus (2) the Class A-2 Shortfall from the
preceding Distribution Date;
(C) to the Class A-3 Certificateholders, (1) the Class A-3
Interest Accrual Amount plus (2) the Class A-3 Shortfall from the
preceding Distribution Date;
(D) to the Class A-4 Certificateholders, (1) the Class A-4
Interest Accrual Amount plus (2) the Class A-4 Shortfall from the
preceding Distribution Date;
(E) to the Class A-5 Certificateholders, (1) the Class A-5
Interest Accrual Amount plus (2) the Class A-5 Shortfall from the
preceding Distribution Date;
(F) to the Class A-6 Certificateholders, (1) the Class A-6
Interest Accrual Amount plus (2) the Class A-6 Shortfall from the
preceding Distribution Date;
(G) to the Class A-7 Certificateholders, (1) the Class A-7
Interest Accrual Amount plus (2) the Class A-7 Shortfall from the
preceding Distribution Date;
(H) to the Class A-8 Certificateholders, (1) the Class A-8
Interest Accrual Amount plus (2) the Class A-8 Shortfall from the
preceding Distribution Date;
(I) to the Class A-9 Certificateholders, (1) the Class A-9
Interest Accrual Amount plus (2) the Class A-9 Shortfall from the
preceding Distribution Date;
(J) to the Class A-R Certificateholders, (1) the Class A-R
Interest Accrual Amount plus (2) the Class A-R Shortfall from the
preceding Distribution Date;
(K) to the Class A-X Certificateholders, (1) the Class A-X
Interest Accrual Amount plus (2) the Class A-X Shortfall from the
preceding Distribution Date;
(ii) concurrently, (A) to the Non-PO Class A
Certificateholders, up to the Non-PO Class A Optimal Principal Amount,
allocated among the Non-PO Class A Certificates in accordance with the
Non-PO Class A Principal Payment Rules and (B) to the Class A-P
Certificateholders, the Class A-P Amount;
(iii) to the Class A-P Certifcateholders, the Class A-P
Shortfall Amount; provided, however, that any amounts distributed
pursuant to this Section 6.01(b)(iii) shall not cause a further
reduction in the Outstanding Certificate Principal Balance of the Class
A-P Certificates;
(iv) if the Available Distribution Amount is insufficient to
make the distributions set forth in paragraph (b)(i) above, the Paying
Agent shall distribute the Available Distribution Amount to the Non-PO
Class A Certificateholders pro rata in accordance with the amounts
otherwise distributable to them pursuant to paragraph (b)(i)(A)-(K)
above.
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(c) Amounts payable on any Distribution Date to the Class M
Certificateholders shall be distributed up to an amount equal to (A) the Class M
Interest Accrual Amount plus (B) the Class M Shortfall from the preceding
Distribution Date plus (C) the portion of the Subordinated Optimal Principal
Amount allocable (pursuant to Section 6.01(e)) to the Class M Certificates plus
(D) any Carry-over Subordinated Principal Amounts with respect to the Class M
Certificates.
(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(a)(iv) shall be distributed in the
following priority:
(1) first, to the Class B-1 Certificateholders, up to an amount
equal to (A) the Class B-1 Interest Accrual Amount plus (B) the Class B-1
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-1
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-1 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class M Certificates in excess of the Outstanding Certificate Principal Balance
of such Class;
(2) second, to the Class B-2 Certificateholders, up to an amount
equal to (A) the Class B-2 Interest Accrual Amount plus (B) the Class B-2
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-2
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-2 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-1 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(3) third, to the Class B-3 Certificateholders, up to an amount
equal to (A) the Class B-3 Interest Accrual Amount plus (B) the Class B-3
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-3
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-3 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-2 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(4) fourth, to the Class B-4 Certificateholders, up to an amount
equal to (A) the Class B-4 Interest Accrual Amount plus (B) the Class B-4
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-4
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-4 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-3 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class; and
(5) fifth, to the Class B-5 Certificateholders, up to an amount
equal to (A) the Class B-5 Interest Accrual Amount plus (B) the Class B-5
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-5
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-5 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-4 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class.
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(e) On each Distribution Date, the Subordinated Optimal Principal
Amount shall be allocated among the Classes of Subordinated Certificates
entitled, pursuant to the next succeeding sentence, to an allocation of
principal on such Distribution Date, pro rata based upon the Outstanding
Certificate Principal Balances of all such Classes so entitled. With respect to
the Subordinated Certificates, on each Distribution Date, principal shall be
distributable to (1) any Class of Subordinated Certificates which has current
Credit Support (before giving effect to any distribution of principal and any
Realized Losses allocable on such Distribution Date) greater than or equal to
the Original Credit Support for such Class; (2) the Class having the lowest
numerical class designation of any outstanding Class of Subordinated
Certificates which does not meet the criteria in (1) above; and (3) the Class
B-5 Certificates if all other outstanding Classes of Subordinated Certificates
meet the criteria in (1) above or if no other Class of Subordinated Certificates
is outstanding; provided, however, that no Class of Subordinated Certificates
shall receive any distributions of principal if any Class of Subordinated
Certificates having a lower numerical class designation than such Class fails to
meet the criteria in (1) above. For purposes of this paragraph, the Class M
Certificates shall be deemed to have a lower numerical class designation than
each Class of Class B Certificates.
(f) Based upon the information received from the Servicer as provided
in Section 6.02, the Master Servicer shall make all calculations necessary to
make the distributions described in this Section 6.01. All distributions made to
Certificateholders of any Class on each Distribution Date will be made to the
Certificateholders of the respective Class of record on the next preceding
Record Date, except that the final distribution with respect to each Class shall
be made as provided in the forms of Certificates. All distributions made to
Certificateholders shall be based on the Percentage Interest of the Class
represented by their respective Certificates, and shall be made either by
transfer in immediately available funds to the account of such Holder at a bank
or other financial or depository institution having appropriate facilities
therefor, if such Holder has so notified the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, in writing at least 10
Business Days prior to the first Distribution Date for which distribution by
wire transfer is to be made and such Holder's Certificates of such Class in the
aggregate evidence an original denomination of not less than $5,000,000 or such
Holder holds a 100% Percentage Interest of such Class or, if not, by check
mailed to the address of the Person entitled thereto as it appears on the
Certificate Register, except that the final distribution in retirement of the
Certificates will be made only upon presentation and surrender of the
Certificates at the office specified in the final Distribution Notice. If on any
Determination Date, the Master Servicer determines that there are no Mortgage
Loans outstanding and no other funds or assets in the Trust Fund other than the
funds in the Certificate Account, the Trustee or if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall promptly send the final
distribution notice to each Certificateholder specifying the manner in which the
final distribution will be made.
Section 6.02. Statements to the Certificateholders.
(a) Not later than noon New York City time two Business Days prior to
each Distribution Date, the Servicer shall send to the Master Servicer, the
Paying Agent and the Trustee (in such format as may be mutually agreed) the
relevant information for purposes of this Section 6.02. Not later than each
Distribution Date, the Master Servicer shall make available on its designee's
website located at xxx.xxxxxxxx.xxx/xxxxxx or send to each Certificateholder,
the Depositor, the Trustee (if other than the Paying Agent), the Servicer, any
co-trustee, and each Rating Agency a statement setting forth the following
information, after giving effect to the distributions to be made by the Paying
Agent pursuant to Section 6.01 on or as of such Distribution Date:
(i) with respect to each Class of Certificates the amount of
such distribution to Holders of such Class allocable to principal;
(ii) with respect to each Class of Certificates the amount of
such distribution to Holders of such Class allocable to interest;
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(iii) the aggregate amount of any Principal Prepayments and
Repurchase Proceeds included in the distributions to
Certificateholders;
(iv) the aggregate amount of any Advances by the Servicer
pursuant to Section 6.03;
(v) the number of Outstanding Mortgage Loans and the Mortgage
Pool Principal Balance, as of the close of business as of the end of
the related Principal Prepayment Period;
(vi) the related amount of the Servicing Fees (as adjusted
pursuant to Section 6.05) retained or withdrawn from the Collection
Account by the Servicer;
(vii) the related amount of the Master Servicer Fees withdrawn
from the Certificate Account by the Master Servicer;
(viii) the number and aggregate principal amounts of Mortgage
Loans (A) delinquent one Monthly Payment, two Monthly Payments and
three or more Monthly Payments and (B) in foreclosure, in each case, as
of the end of the related Principal Prepayment Period;
(ix) the number and the principal balance of Mortgage Loans
with respect to any real estate acquired through foreclosure or grant
of a deed in lieu of foreclosure;
(x) the aggregate amount of all Advances recovered during the
related Due Period;
(xi) with respect to the following Distribution Date, the Class
A Percentage, the Class M Percentage, the Class B Percentage, the Class
A Principal Balance, the Class M Principal Balance, the Class B
Principal Balance, the Non-PO Class A Percentage, the Non-PO Class A
Prepayment Percentage, the Non-PO Class A Percentage, the Non-PO Class
A Prepayment Percentage and the level of Credit Support, if any, with
respect to each Class of Subordinated Certificates;
(xii) the aggregate amount of Realized Losses during the related
Due Period and the aggregate amount of Realized Losses since the
Cut-off Date;
(xiii) the allocation to each Class of Certificates of any
Realized Losses during the related Due Period;
(xiv) the Outstanding Certificate Principal Balance of each
Class of Certificates after giving effect to the distributions to each
Class on such Distribution Date;
(xv) with respect to each Class of Certificates, the amount of
any Compensating Interest Shortfalls on such Distribution Date; and
(xvi) the number of Mortgage Loans with respect to which a
reduction in the Mortgage Rate has occurred pursuant to the Soldiers'
and Sailors' Civil Relief Act of 1940, as amended, as well as the
amount of interest not required to be paid with respect to any such
Mortgage Loans during the related Due Period as a result of such
reductions.
The Paying Agent's responsibility for sending the above information to
the Certificateholders is limited to the availability, timeliness and accuracy
of the information derived from the Servicer.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer or the Servicer will provide to each
Certificateholder which is a savings and loan association, bank or insurance
company certain reports and access during business hours to information and
documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of regulatory
authorities with respect to investment in the Certificates; provided, that the
Master Servicer or the Servicer shall be entitled to be reimbursed by each such
Certificateholder for the Master Servicer's or the Servicer's actual expenses
incurred in providing such reports and access.
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(b) The Master Servicer shall cause to be prepared, and the Master
Servicer or the Trustee, as required by applicable law, shall file, any and all
tax returns, information statements or other filings required to be delivered to
Certificateholders and any governmental taxing authority pursuant to any
applicable law with respect to the Trust Fund and the transactions contemplated
hereby (the Master Servicer or the Trustee may, at its option but with the
consent of the other, which consent shall not be unreasonably withheld, appoint
an organization which regularly engages in the preparation and filing of such
documents on a continuous basis for profit and which represents itself to be
expert in such matters) and the Master Servicer shall maintain a record of the
information necessary for the application of Section 860E(e) of the Code and
shall make such information available as required by Section 860D(a)(6) of the
Code; provided, however, that the Master Servicer shall notify the Trustee of
the Trustee's obligation to make any such filings and that any fees of the
organization appointed as provided above shall be paid by the Master Servicer;
and provided further that if an organization is employed, as described above, to
prepare and file any such filings, neither the Trustee nor the Master Servicer
shall be liable for any errors by such organization.
Section 6.03. Advances by the Servicer. If, on any Determination Date,
the Servicer determines that any Monthly Payments with respect to any Mortgage
Loans due on the immediately preceding Due Date have not been received, the
Servicer shall, unless it determines in its sole discretion that such amounts
will not be recoverable from Late Collections, Liquidation Proceeds or
otherwise, make an Advance on or before the Business Day prior to the related
Distribution Date in an amount equal to the amount of such delinquent Monthly
Payments, after adjustment of any delinquent interest payment for its Servicing
Fee. For purposes of this Section 6.03, the delinquent Monthly Payments referred
to in the preceding sentence shall be deemed to include an amount equal to the
Monthly Payments that would have been due on Mortgage Loans which have been
foreclosed or otherwise terminated and in connection with which the Servicer
acquired and continues to own the Mortgaged Properties on behalf of the
Certificateholders. If the Servicer makes an Advance, it shall on or prior to
the Servicer Remittance Date for such Distribution Date either (i) deposit in
the Collection Account an amount equal to such Advance, (ii) cause to be made an
appropriate entry in the records of the Collection Account that funds in such
account being held for future distribution or withdrawal have been, as permitted
by this Section 6.03, used by the Servicer to make such Advance or (iii) make
Advances in the form of any combination of clauses (i) and (ii) aggregating the
amount of such Advance. Any funds being held in the Collection Account for
future distribution to Certificateholders and so used pursuant to clause (ii) or
(iii) above shall be replaced by the Servicer from its own funds by deposit into
the Collection Account on or before any subsequent Distribution Date to the
extent that funds in the Collection Account on such Distribution Date shall be
less than the amount of payments required to be made to Certificateholders on
such Distribution Date. Any such Advance shall be included with the distribution
to the Certificateholders on the related Distribution Date. If the Servicer
determines not to make a Nonrecoverable Advance, it shall on the related
Determination Date furnish to the Trustee, any co-trustee, the Master Servicer
and each Rating Agency notice of such determination. The Servicer shall be
entitled to be reimbursed from the Collection Account for all Advances and
Nonrecoverable Advances as provided in Section 5.09.
Section 6.04. Allocation of Realized Losses.
(a) Not later than the Business Day following each Determination Date,
the Servicer shall determine (i) the total amount of Realized Losses, if any,
incurred during the related Principal Prepayment Period; (ii) whether and to
what extent such Realized Losses constitute Excess Losses; and (iii) the
respective portions of such Realized Losses allocable to interest and to
principal and forward such information to the Master Servicer in accordance with
Section 6.02.
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(b) The principal portion of any Realized Losses other than Excess
Losses shall be allocated as follows: first, to the Class B-5 Certificates until
the Outstanding Certificate Principal Balance of the Class B-5 Certificates has
been reduced to zero; second, to the Class B-4 Certificates until the
Outstanding Certificate Principal Balance of the Class B-4 Certificates has been
reduced to zero; third, to Class B-3 Certificates until the Outstanding
Certificate Principal Balance of the Class B-3 Certificates has been reduced to
zero; fourth, to the Class B-2 Certificates until the Outstanding Certificate
Principal Balance of the Class B-2 Certificates has been reduced to zero; fifth,
to the Class B-1 Certificates until the Outstanding Certificate Principal
Balance of the Class B-1 Certificates has been reduced to zero; sixth, to the
Class M Certificates until the Outstanding Certificate Principal Balance of the
Class M Certificates has been reduced to zero; and seventh, to the Non-PO Class
A Certificates on a pro rata basis until the Outstanding Certificate Principal
Balance of the Non-PO Class A Certificates has been reduced to zero; provided,
however, that if a Realized Loss occurs with respect to a Discount Mortgage Loan
(a) the amount of such Realized Loss equal to the product of (i) the amount of
such Realized Loss and (ii) the PO Percentage with respect to such Discount
Mortgage Loan will be allocated to Class A-P Certificates and (b) the remainder
of such Realized Loss will be allocated as described above. The principal
portion of an Excess Loss shall be allocated among all Classes of Certificates
on a pro rata basis; provided, however, that the applicable PO Percentage of any
Excess Losses on the Discount Mortgage Loans shall be allocated to Class A-P
Certificates.
(c) As used herein, an allocation of a Realized Loss on a "pro rata
basis" among two or more specified Classes of Certificates means an allocation
on a pro rata basis, among the various Classes so specified, to each such Class
of Certificates on the basis of their Outstanding Certificate Principal Balances
prior to giving effect to distributions to be made on such Distribution Date.
All Realized Losses and all other losses allocated to a Class of Certificates
hereunder will be allocated among the Certificates of such Class in proportion
to the Percentage Interests evidenced thereby.
(d) In the event that a recovery is made with respect to any Realized
Loss, the amount of such recovery shall be distributed on the next Distribution
Date first to the Class A Certificateholders, up to the amount to which such
Realized Loss was allocated to the Class A Certificateholders; second to the
Class M Certificateholders, up to the amount to which such Realized Loss was
allocated to the Class M Certificateholders; third to the Class B-1
Certificateholders, up to the amount to which such Realized Loss was allocated
to the Class B-1 Certificateholders; fourth to the Class B-2 Certificateholders,
up to the amount to which such Realized Loss was allocated to the Class B-2
Certificateholders; fifth to the Class B-3 Certificateholders, up to the amount
to which such Realized Loss was allocated to the Class B-3 Certificateholders;
sixth to the Class B-4 Certificateholders, up to the amount to which such
Realized Loss was allocated to the Class B-4 Certificateholders; and seventh to
the Class B-5 Certificateholders, up to the amount to which such Realized Loss
was allocated to the Class B-5 Certificateholders.
Section 6.05. Compensating Interest; Allocation of Certain Interest
Shortfalls.
(a) With respect to any Payoff of a Mortgage Loan which occurs between
the fifteenth day of such month and the last day of a month, the Servicer shall,
on the Servicer Remittance Date relating to the Principal Prepayment Period
during which such Payoff occurred, deposit into the Certificate Account from its
own funds, as a reduction of its servicing compensation hereunder, an amount, if
any, by which the amount of the interest that would otherwise accrue with
respect to such Mortgage Loan from the date of prepayment to the Due Date in the
related Due Period at the Net Mortgage Rate exceeds the amount of the interest
(adjusted to the Net Mortgage Rate) collected from the Mortgagor with respect to
such period (such amount, "Compensating Interest") ; provided, however, that
with respect to any Distribution Date, the Servicer's obligation to deposit any
such amount is limited to an amount equal to the sum of (A) the product of (i)
one-twelfth of 0.02% and (ii) the aggregate Scheduled Principal Balance of the
Mortgage Loans serviced by it with respect to such Distribution Date, (B) the
aggregate Payoff Earnings with respect to the Mortgage Loans and (C) the
aggregate Payoff Interest with respect to the Mortgage Loans.
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(b) On any Distribution Date, the excess, if any, of (X) Compensating
Interest with respect to such Distribution Date over (Y) the amount deposited in
the Collection Account pursuant to (a) above for such Distribution Date shall
equal the "Compensating Interest Shortfall" with respect to such Distribution
Date. On any Distribution Date, the Compensating Interest Shortfall shall be
allocated pro rata among the outstanding Classes of Class A, Class M and Class B
Certificates based on the amount of interest to which each such Class would
otherwise be paid on such Distribution Date had there been no such Compensating
Interest Shortfall.
(c) On any Distribution Date, the interest portion of any Realized
Losses ("Realized Loss Interest Shortfall") (other than the interest portion of
Excess Losses) shall be allocated to the Class of Subordinated Certificates then
outstanding having the highest numerical class designation (for this purpose,
the Class M Certificates shall be deemed to have a lower numerical class
designation than each Class of Class B Certificates) or, of no class of
Subordinated Certificates is then outstanding, to the Non-PO Class A
Certificates pro rata among the outstanding Classes of Non-PO Class A
Certificates based on the amount of interest to which each such Class would
otherwise be paid on such Distribution Date had there been no such Realized Loss
Interest Shortfall. On any Distribution Date, the interest portion of any Excess
Losses shall be allocated among all Classes of Certificates pro rata based upon
the amount of interest to which each such Class would otherwise be paid on such
Distribution Date had there been no such Excess Losses allocable to interest.
Section 6.06. Subordination. The rights of the Class B
Certificateholders to receive distributions in respect of the Class B
Certificates on any Distribution Date shall be subordinated to the rights of the
Class A and Class M Certificateholders to receive distributions in respect of
the Class A and Class M Certificates. The rights of the Class M
Certificateholders to receive distributions in respect of the Class M
Certificates on any Distribution Date shall be subordinated to the rights of the
Class A Certificateholders to receive distributions in respect of the Class A
Certificates. The rights of the Class B-1 Certificateholders to receive
distributions in respect of the Class B-1 Certificates on any Distribution Date
shall be subordinate to the rights of the Class A and Class M Certificateholders
to receive distributions in respect of such Class A and Class M Certificates.
Each Class of Class B Certificates (other than the Class B-1 Certificates) is
subordinated to the Class A Certificates, the Class M Certificates and each
Class of Class B Certificates having a lower numerical class designation than
such Class of Class B Certificates. The rights of the Servicer, as servicer, to
receive funds from the Collection Account, pursuant to Section 5.09, on account
of its Servicing Fee (except as provided in Section 6.05) in respect of each
Mortgage Loan, assumption fees, late payment charges and other mortgagor
charges, reimbursement of Advances and expenses or otherwise and the rights of
the Master Servicer to receive the Master Servicer Fee shall not be subordinated
to the rights of the Class A, Class M or Class B Certificateholders. Amounts
held by the Servicer, the Master Servicer or the Trustee for future distribution
to the Class M or Class B Certificateholders, including, without limitation, in
the Collection Account or the Certificate Account, shall not be distributed in
respect of the Class M or Class B Certificates except in accordance with the
terms of this Agreement. The Class B Certificateholders are deemed to have
granted a security interest in such amounts to the Class A and Class M
Certificateholders to secure the rights of the Class A and Class M
Certificateholders to receive distributions in priority over the Class B
Certificateholders. The Class M Certificateholders are deemed to have granted a
security interest in such amounts to the Class A Certificateholders to secure
the rights of the Class A Certificateholders to receive distributions in
priority over the Class A Certificateholders.
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Section 6.07. Determination of LIBOR. LIBOR applicable to the
calculation of the Certificate Rates on the Class A-1 and Class A-9 Certificates
for any Interest Accrual Period (other than the initial Interest Accrual Period)
will be determined by the Master Servicer on each Rate Adjustment Date as
follows:
For any Interest Accrual Period other than the first Interest Accrual
Period, 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, England time, on the
second LIBOR Business Day prior to the first day of such Interest Accrual
Period. For the first Interest Accrual Period, LIBOR shall equal 2.08125% with
respect to the Class A-1 and Class A-9 Certificates. 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 Master
Servicer), 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.
The establishment of LIBOR by the Master Servicer on any Rate
Adjustment Date and the Master Servicer's subsequent calculation of the
Certificate Rates applicable to the Class A-1 and Class A-9 Certificates for the
relevant Interest Accrual Period, in the absence of manifest error, will be
final and binding.
[END OF ARTICLE VI]
ARTICLE VII
REPORTS TO BE PREPARED BY THE MASTER SERVICER
---------------------------------------------
Section 7.01. Master Servicer and the Servicer Shall Provide
Information as Reasonably Required. The Master Servicer and the Servicer shall
furnish to the Trustee, during the term of this Agreement, such periodic,
special, or other reports or information, whether or not provided for herein, as
shall be necessary, reasonable, or appropriate in respect to the Trustee, or
otherwise in respect to the purposes of this Agreement, all such reports or
information to be as provided by and in accordance with such applicable
instructions and directions as the Trustee may reasonably require.
Section 7.02. Federal Information Returns and Reports to
Certificateholders.
(a) For Federal income tax purposes, the taxable year of each REMIC
Pool shall be a calendar year and the Master Servicer shall maintain or cause
the maintenance of the books of the Trust Fund on the accrual method of
accounting.
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(a) The Master Servicer shall prepare and file or cause to be filed
with the Internal Revenue Service federal tax or information returns with
respect to each REMIC Pool and the Certificates containing such information and
at the times and in the manner as may be required by the Code or applicable
Treasury regulations, and shall furnish to each Certificateholder at any time
during the calendar year for which such returns or reports are made such
statements or information at the times and in the manner as may be required
thereby. Without limitation on any other requirement of this Section 7.02, the
Master Servicer shall make available the information necessary for the
application of Section 860E(e) of the Code within 60 days of such request. With
respect to the Class A-R Certificate, the Master Servicer shall provide such
information or cause such information to be provided to (i) the Internal Revenue
Service, (ii) the transferor of a Class A-R Certificate to a Disqualified
Organization and (iii) a Pass-Thru Entity that holds a Class A-R Certificate
with one or more record holders that are Disqualified Organizations. The Master
Servicer also shall provide or cause to be provided promptly the above described
computation and information relating to the tax on transfers to Disqualified
Organizations or holdings by Pass-Thru Entities within sixty (60) days after
becoming aware of the transfer to a Disqualified Organization or Pass-Thru
Entity with one or more Disqualified Organization owners, as the case may be. In
addition, except as may be provided in Treasury Regulations, any Person holding
an interest in a Pass-Thru Entity as a nominee for another will, with respect to
such interest, be treated as a Pass-Thru Entity. In connection with the
foregoing, the Master Servicer shall provide the name, address and telephone
number of the person who can be contacted to obtain information required to be
reported to the holders of regular interests in each REMIC Pool (the "REMIC
Reporting Agent") as required by IRS Form 8811. The Master Servicer shall
provide the name, address and telephone number of the REMIC Reporting Agent to
the Trustee on the Closing Date, and the Trustee shall designate such person to
act as the REMIC Reporting Agent as required by IRS Form 8811. The Master
Servicer shall indicate the elections to treat each REMIC Pool as a REMIC (which
elections shall apply to the taxable period ending December 31, 2001 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax information returns
filed pursuant to this Section 7.02 and any other returns as may be required by
the Code, and in doing so shall rely entirely upon, and shall have no liability
for information provided by, or calculations provided by, the Servicer. The
Master Servicer is hereby designated as the agent of the Holder of the Class A-R
Certificate who shall be the "tax matters person" (within the meaning of Treas.
Reg. "1.860F-4(d)) for each REMIC Pool. Any Holder of a Class A-R Certificate
will by acceptance thereof so appoint the Master Servicer as agent and
attorney-in-fact for the purpose of acting as tax matters person. In the event
that the Code or applicable Treasury regulations prohibit the Trustee from
signing tax or information returns or other statements, or the Master Servicer
from acting as tax matters person (as an agent or otherwise), the Trustee or the
Master Servicer, as the case may be, shall take whatever action that in its sole
good faith judgment is necessary for the proper filing of such information
returns or for the provision of a tax matters person, including designation of
the Holder of a Class A-R Certificate to sign such returns or act as tax matters
person. Each Holder of a Class A-R Certificate shall be bound by this Section
7.02 by virtue of its acceptance of a Class A-R Certificate.
[END OF ARTICLE VII]
ARTICLE VIII
THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER
---------------------------------------------------
Section 8.01. Indemnification; Third Party Claims.The Servicer agrees
to indemnify the Depositor, the Master Servicer and the Trustee and hold the
Depositor, the Master Servicer and the Trustee, their officers, directors,
employees and agents harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Depositor, the Master Servicer or the Trustee
may sustain in any way related to failure of the Servicer to perform its duties
and service the Mortgage Loans in compliance with the terms of this Agreement;
provided that no such indemnification shall be required with respect to acts of
a prior Servicer. The Servicer shall immediately notify the Depositor, the
Master Servicer and the Trustee if a claim is made by a third party with respect
to this Agreement or the Mortgage Loans, assume (with the consent of the
Depositor, the Master Servicer and the Trustee) the defense of any such claim
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it, the Depositor, the Master Servicer or the Trustee in respect of such
claim. This right to indemnification shall survive the termination of this
Agreement.
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Section 8.02. Merger or Consolidation of the Depositor, the Servicer or
the Master Servicer. The Depositor, the Servicer and the Master Servicer will
each keep in full effect its existence, rights and franchises as a corporation,
and will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its duties under this
Agreement. The Servicer will sell all or substantially all of its assets without
the prior written consent of the Depositor and the Trustee which shall not be
unreasonably withheld or delayed.
Any Person into which the Depositor, the Servicer or the Master
Servicer may be merged or consolidated, or to whom the Depositor, the Servicer
or the Master Servicer has sold substantially all of its assets, or any
corporation resulting from any merger, conversion or consolidation to which the
Depositor, the Servicer or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor, the Servicer or the Master
Servicer, shall be the successor of the Depositor, the Servicer or the Master
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Servicer or the Master Servicer shall satisfy the requirements of Section
8.05 with respect to the qualifications of a successor to the Master Servicer.
Notwithstanding anything else in this Section 8.02 and Section 8.04 to
the contrary, the Servicer and the Master Servicer may assign its rights and
delegate its duties and obligations under this Agreement; provided that the
Person accepting such assignment or delegation shall be a Person which is
qualified to service mortgage loans on behalf of FNMA or FHLMC, is approved in
advance in writing by the Trustee and the Depositor, is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor and
the Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer or the Master Servicer under this Agreement; provided
further that each Rating Agency's rating of any of the Classes of Certificates
that have been rated in effect immediately prior to such assignment and
delegation will not be qualified or reduced or withdrawn as a result of such
assignment and delegation. In the case of any such assignment and delegation,
the Servicer and the Master Servicer shall be released from its obligations as
Servicer or Master Servicer, as applicable under this Agreement, except that the
Servicer and the Master Servicer shall remain liable for all liabilities and
obligations incurred by it as Servicer or Master Servicer, as applicable
hereunder prior to the satisfaction of the conditions to such assignment and
delegation set forth in the next preceding sentence.
Section 8.03. Limitation on Liability of the Depositor, the Servicer,
the Master Servicer the Trustee and Others. Neither the Depositor, the Servicer,
the Master Servicer nor any of the directors, officers, employees or agents of
the Depositor, the Servicer or the Master Servicer shall be under any liability
to the Trustee or the Certificateholders for any action taken, or for refraining
from the taking of any action, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor, the Servicer or the Master Servicer against any breach of warranties
or representations made herein, or failure to perform its obligations in strict
compliance with this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Depositor, the Master Servicer, the Trustee, and any director, officer,
employee or agent of the Depositor, the Master Servicer or the Trustee 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. Neither the
Depositor, the Master Servicer nor the Trustee shall be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
respective duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may cause it to incur any expenses or
liability; provided, however, that the Depositor, the Servicer, the Master
Servicer or the Trustee may in its discretion (and, in the case of the
Depositor, the Servicer or the Master Servicer, with the consent of the Trustee,
which consent shall not be unreasonably withheld) undertake any such action
which it may deem necessary or desirable with respect to this Agreement and the
rights and duties of the parties hereto. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities payable from the Collection Account and the Depositor, the
Servicer, the Master Servicer or the Trustee shall be entitled to be reimbursed
therefor out of the Collection Account as provided by Section 4.06; provided
that no such right of reimbursement shall exist with respect to the Servicer
when such claim relates to the failure of the Servicer to service the Mortgage
Loans in strict compliance with the terms of this Agreement or to a breach of a
representation or warranty made by the Servicer hereunder.
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Section 8.04. Depositor, Servicer and Master Servicer Not to Resign.
Except as described in Section 8.02, neither the Depositor, the Servicer nor the
Master Servicer shall assign this Agreement or resign from the obligations and
duties hereby imposed on it except by mutual consent of the Depositor, the
Servicer, the Master Servicer and all of the Certificateholders unless the
determination is made that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Depositor, the
Servicer or the Master Servicer. Any such determination permitting the
resignation of the Depositor, the Servicer or the Master Servicer shall be
evidenced by an opinion of independent counsel to such effect delivered to the
Trustee which opinion of counsel shall be in form and substance acceptable to
the Trustee. Upon any such assignment or resignation, the Depositor, the
Servicer or the Master Servicer, as appropriate, shall send notice to all
Certificateholders of the effect of such assignment or resignation upon the then
current rating of the Class of Certificates by each Rating Agency whose rating
on such Class is then in effect. No such resignation shall become effective
until a successor shall have assumed the Depositor's, the Servicer's or the
Master Servicer's responsibilities and obligations hereunder in the manner
provided in Section 8.05. Any purported assignment or resignation which does not
comply with the requirements of this Section shall be of no effect.
Section 8.05. Successor to the Servicer. In connection with the
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Section 8.04 or 9.01, the Trustee shall (i) succeed to and assume
all of the Servicer's responsibilities, rights, duties and obligations as
Servicer (but not in any other capacity) under this Agreement (except that the
Trustee shall not be obligated to make Advances if prohibited by applicable law
nor to effectuate repurchases or substitutions of Mortgage Loans pursuant to
Section 2.02 and except that the Trustee makes no representations and warranties
pursuant to Sections 3.01 and 3.02). Prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement, the Trustee may
appoint a successor having a net worth of not less than $15,000,000 and which is
a FNMA or FHLMC approved seller/servicer in good standing and which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement, except as aforesaid, if the
Trustee receives a letter from each Rating Agency that such appointment would
not result in a reduction or withdrawal of the current rating of any Class of
Certificates that is rated by a Rating Agency. Any co-trustee appointed pursuant
to Section 10.10 for purposes of this Section 8.05 shall have an obligation to
make Advances pursuant to Section 6.03 during such time as the Trustee is the
Servicer, which obligation shall be joint and several with that of the Trustee
as Servicer. If the Trustee has become the successor to the Servicer in
accordance with this Section or Section 9.03, then notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution having a net worth of not
less than $15,000,000 and which is a FNMA or FHLMC approved seller/servicer in
good standing as the successor to the Servicer hereunder in the assumption of
all of the responsibilities, duties or liabilities of the Servicer hereunder. In
connection with any such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree or such court shall determine;
provided, however, that no such compensation shall be in excess of that
permitted under this Agreement without the consent of all of the
Certificateholders. If the Servicer's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to Section 8.02, 8.04 or
9.01, the Servicer shall discharge such duties and responsibilities during the
period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor or the Trust Fund. The resignation or removal of the Servicer
pursuant to Section 8.02, 8.04 or 9.01 shall not become effective until a
successor shall be appointed pursuant to this Section and shall in no event
relieve the Servicer of liability for breach of the representations and
warranties made pursuant to Section 3.03.
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Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer it is succeeding and to the Trustee an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement and the Certificates. Any termination or resignation of the
Servicer or this Agreement pursuant to Section 8.02, 8.04, 9.01 or 11.01 shall
not affect any claims that the Trustee may have against the Servicer for events
or actions taken or not taken by the Servicer arising prior to any such
termination or resignation.
A Servicer succeeded hereunder shall timely deliver to the successor
the funds that were, or were required to be, in the Collection Account and the
Escrow Account, if any, and all Mortgage Files and related documents, statements
and recordkeeping held by it hereunder and the Servicer shall account for all
funds and shall execute and deliver such instruments and do such other things as
may reasonably be required to more fully and definitely vest and confirm in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the succeeded
Servicer shall notify, in writing, the Trustee, the Master Servicer, the
Certificateholders and each Rating Agency of such appointment.
Section 8.06. Maintenance of Ratings. The Servicer shall cooperate with
the Depositor and the Master Servicer and take any action that may be reasonably
necessary to maintain the current rating or ratings on the Certificates.
Section 8.07. Compensation of the Master Servicer. The Master Servicer
shall be entitled to receive the Master Servicer Fee as compensation for
services rendered by the Master Servicer under this Agreement. The Master
Servicer shall pay itself such Master Servicer Fee monthly from amounts on
deposit in the Certificate Account.
Section 8.08. Certain Matters Affecting the Master Servicer. Except as
otherwise provided in Section 8.03:
(a) The Master Servicer may rely upon and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) The Master Servicer may consult with counsel, and any advice or
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;
(c) Neither the Master Servicer nor any of its directors, officers,
employees or agents shall be personally liable for any action taken, suffered or
omitted by it in good faith and believed by it or any of them to be authorized
or within the discretion or rights or powers conferred upon the Master Servicer
by this Agreement;
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(d) Nothing in this Agreement shall be construed to require the Master
Servicer to expend its own funds; and
(e) The Master Servicer undertakes to, and is empowered to, perform
such duties and only such duties as are specifically set forth in this
Agreement.
[END OF ARTICLE VIII]
ARTICLE IX
DEFAULT
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Section 9.01. Events of Default. If one or more of the following Events
of Default shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit any payment required
to be made or distributed under the terms of this Agreement which
continues unremedied for a period of three (3) Business Days after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Trustee, the
Master Servicer or the Depositor or to the Servicer, the Trustee, the
Master Servicer and the Depositor by the Holders of Certificates of any
Class evidencing, as to such Class, Percentage Interests aggregating
not less than 25%; or
(ii) a breach by the Servicer in a material respect of any
representation or warranty set forth in Section 3.02, or failure on the
part of the Servicer duly to observe or perform in any material respect
any other of the covenants or agreements on the part of the Servicer
set forth in this Agreement, which continues unremedied for a period of
60 days after the date on which written notice of such breach or
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Trustee, the Master Servicer or the Depositor or to
the Servicer, the Trustee, the Master Servicer and the Depositor by the
Holders of Certificates of any Class evidencing, as to such Class,
Percentage Interests aggregating not less than 25%; or
(iii) the Servicer shall notify the Trustee in writing that it
is unable to make an Advance required to be made in accordance with
Section 6.03; or;
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to all or
substantially all of the Servicer's property; or
(vi) the 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.
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then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee shall notify the Certificateholders, the Master
Servicer and each Rating Agency of such Event of Default. The Trustee may, and
at the written direction of the Holders of Certificates evidencing Percentage
Interests aggregating more than 50%, shall, by notice in writing to the
defaulting Servicer, terminate all the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof.
On or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 8.05. Upon written request from the Trustee, the
Servicer shall prepare, execute and deliver, any and all documents and other
instruments, place in such successor's possession all Mortgage Files, and do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Servicer's sole expense. The Servicer agrees to cooperate with
the Trustee and any co-trustee in effecting the termination of the Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited or should have been credited by the Servicer to
the Collection Account or Escrow Account or thereafter received with respect to
the Mortgage Loans. The Trustee will have no obligation to take any action or
institute, conduct or defend any litigation under this Agreement at the request,
order or direction of any of the Holders of Certificates unless such
Certificateholders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which the Trustee may incur.
Section 9.02. Waiver of Defaults. The Trustee may waive any default by
the Servicer in the performance of the Servicer's obligations hereunder and its
consequences, except that a default in the making of any required distribution
on any of the Certificates may only be waived by the holders of a majority of
the Percentage Interests of the affected Certificateholders. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.03. Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 9.01,
the Trustee or its appointed agent shall be the successor in all respects to the
Servicer to the extent provided in Section 8.05.
Section 9.04. Notification to Certificateholders and the Rating
Agencies.
(a) Upon any such termination pursuant to Section 9.01, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within sixty (60) days of a Responsible Officer of the Trustee
having received written notice of the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
[END OF ARTICLE IX]
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ARTICLE X
CONCERNING THE TRUSTEE
----------------------
Section 10.01. Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to, and is empowered to, perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee as enumerated in this Agreement shall not be construed as a
duty; provided that in case an Event of Default has occurred (which has not been
cured), 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 such
man's own affairs.
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, and, if the Trustee is acting as the
successor Servicer pursuant to Section 8.05 or 9.03, its own willful misconduct
with respect to its servicing obligations; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default 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 liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of any Class
holding Certificates which evidence, as to such Class, Percentage
Interests aggregating not less than 25% as to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement.
Section 10.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 10.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) The Trustee may consult with counsel, and any advice or 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;
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(c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured), 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 such man's own affairs;
(d) Neither the Trustee nor any of its directors, officers, employees
or agents shall be personally liable for any action taken, suffered or omitted
by it in good faith and believed by it or any of them to be authorized or within
the discretion or rights or powers conferred upon the Trustee by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default 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 document, unless
requested in writing to do so by Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not less than 25%
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request);
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 expense or liability
as a condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer, if an Event of Default shall have
occurred and is continuing, and otherwise by the Certificateholder requesting
the investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
subcontractors or attorneys; and
(g) Nothing in this Agreement shall be construed to require the Trustee
(acting in its capacity as Trustee) to expend its own funds.
Section 10.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication of the Certificates by an authorized signatory of the Trustee)
shall be taken as the statements of the Depositor or the Servicer, as the case
may be, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations or warranties as to the validity or sufficiency
of this Agreement or of the Certificates (except that (except as set forth
herein) the Certificates shall be duly and validly executed and authenticated by
it) or of any Mortgage Loan or related document. The Trustee shall not be
accountable for the use or application by the Depositor, the Master Servicer or
the Servicer 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, the Master
Servicer or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor, the Master Servicer or
the Servicer. The Trustee, in its capacity as trustee hereunder, shall have no
responsibility for the timeliness or the amount of payments made by the Paying
Agent to the Certificateholders.
Section 10.04. 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 it would have if it were not Trustee.
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Section 10.05. Fees and Expenses. 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 trust 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, and the expenses
incurred by the Trustee in connection with the appointment of an office or
agency pursuant to Section 10.11) except any such expense, disbursement or
advance as may arise from its negligence or bad faith. Notwithstanding anything
to the contrary in this Agreement, this Section shall survive the termination of
this Agreement.
Section 10.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be an entity having its principal office in a state
and city acceptable to the Depositor and organized and doing business under the
laws of such state or the United States of America, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. The Trustee shall not be an Affiliate of either Seller, the Master
Servicer or the Depositor. If such entity 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, 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. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 10.07.
Section 10.07. Resignation and Removal of the Trustee. The Trustee, and
any co-trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Master Servicer,
the Servicer and each Rating Agency. Upon receiving such notice of resignation,
the Depositor shall promptly appoint a successor trustee or co-trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee;
provided that such appointment does not result in a reduction or withdrawal of
the rating of any of the Classes of Certificates that have been rated. If no
successor trustee shall have been so appointed and have accepted appointment
within thirty (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 10.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged 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, then the Depositor
may remove the Trustee and appoint a successor trustee 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 Certificates evidencing in the aggregate more than 50%
of Percentage Interest may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
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Any resignation or removal of the Trustee or any resignation of any
co-trustee and appointment of a successor trustee or co-trustee pursuant to any
of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 10.08, or upon
acceptance of appointment by a co-trustee, as applicable, unless with respect to
a co-trustee, the Trustee receives written notice from each Rating Agency that
the failure to appoint a successor co-trustee would not result in a withdrawal
or reduction of the rating of any of the Classes of Certificates that have been
rated, in which case the resignation of any co-trustee shall be effective upon
receipt of such written notice. Any co-trustee may not be removed unless the
Depositor and the Trustee each receive written notice from each Rating Agency
that such removal would not result in a withdrawal or reduction of the rating of
any of the Classes of Certificates that have been rated, in which case the
removal of any co-trustee shall be effective upon receipt of such written
notice.
Section 10.08. Successor Trustee. Any successor trustee appointed as
provided in Section 10.07 shall execute, acknowledge and deliver to the
Depositor 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 shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Depositor, the Master Servicer, the Servicer and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 10.06. Prior to the appointment of any
successor trustee becoming effective, the Depositor shall have received from
each Rating Agency written confirmation that such appointment would not result
in a reduction of the rating of the Class A or Class M Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register, to the Servicer, any Subservicer and to each Rating
Agency. If the Depositor fails to mail such notice within ten (10) days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Depositor.
Section 10.09. Merger or Consolidation of Trustee. Any entity into
which the Trustee may be merged or converted or with which it may be
consolidated or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section
10.06, 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.
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Section 10.10. Appointment of Co-Trustee or Separate Trustee. At any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing the same may at the time
be located, the Depositor and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, of any part of the Trust Fund, and to vest in such Person or Persons,
in such capacity, such title to the Trust Fund, or any part thereof, and,
subject to the other provisions of this Section 10.10, such powers, duties,
obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable. If the Depositor shall not have joined in such
appointment within fifteen (15) days after the receipt by it of a request so to
do, or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 10.06, hereunder, and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 10.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 10.10, 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 and severally, 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 Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.
Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article X. 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.
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.
Section 10.11. Appointment of Office or Agency. The Trustee may appoint
an office or agency in The City of New York where Certificates may be
surrendered for registration of transfer or exchange. The Trustee will maintain
an office at the address stated in Section 12.07 hereof where notices and
demands to or upon the Trustee in respect of the Certificates may be served.
[END OF ARTICLE X]
85
ARTICLE XI
TERMINATION
-----------
Section 11.01. Termination. The respective obligations and
responsibilities of the Depositor, the Servicer, the Master Servicer (except the
duty to pay the Trustee's fees and expenses and indemnification hereunder) and
the Trustee shall terminate upon (i) the later of the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan or
the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due hereunder;
or (ii) at the option of the Servicer (or any successor thereto under this
Agreement), on any Distribution Date which occurs in the month next following a
Due Date on which the aggregate unpaid Principal Balance of all Outstanding
Mortgage Loans is less than 10% of the aggregate unpaid Principal Balance of the
Mortgage Loans on the Cut-off Date, so long as the Servicer (or any such
successor) deposits or causes to be deposited in the Collection Account during
the Principal Prepayment Period related to such Distribution Date (and provides
notice to the Trustee and the Master Servicer of its intention to so deposit on
or before 20th day of such Principal Prepayment Period) an amount equal to the
greater of (A) the Purchase Price for each Outstanding Mortgage Loan, less any
unreimbursed Advances made with respect to any Mortgage Loan (which amount shall
offset completely any unreimbursed Advances for which the Servicer is otherwise
entitled to reimbursement), and, with respect to all property acquired in
respect of any Mortgage Loan remaining in the Trust Fund, an amount equal to the
fair market value of such property, as determined by an appraisal to be
conducted by an appraiser selected by the Trustee, less unreimbursed Advances
made with respect to any Mortgage Loan with respect to which property has been
acquired and (B) the aggregate Outstanding Principal Balance of the Class A,
Class M, Class B-1, and Class B-2 Certificates plus any accrued and unpaid
interest therein at the Remittance Rate; provided, further, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death 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. Notwithstanding the foregoing, a termination may be effected by the
making of such optional repurchases only if the termination of each REMIC Pool
satisfies the requirement for a "qualified liquidation" of each REMIC Pool
within the meaning of Section 860F(a)(4) of the Code and that the purchases of
the Outstanding Mortgage Loans pursuant to this Section 11.01 will not
constitute "prohibited transactions" within the meaning of Section 860F(a)(2) of
the Code.
Notice of any termination, specifying the Distribution Date upon which
all Certificateholders may surrender their Certificates to the Trustee or, if a
Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent for
payment and cancellation, shall be given promptly by the Trustee or, if a Paying
Agent has been appointed under Section 4.05, the Paying Agent, (upon direction
by the Depositor ten (10) days prior to the date such notice is to be mailed) by
signed letter to Certificateholders and each Rating Agency mailed no later than
the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, therein designated and (ii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office or
agency of the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, therein specified. The Servicer shall indicate the date
of adoption of the plan of qualified liquidation in a statement attached to the
final federal income tax return of each REMIC Pool. After giving such notice,
the Trustee or if a Paying Agent has been appointed under Section 4.05, the
Paying Agent shall not register the transfer or exchange of any Certificates. If
such notice is given in connection with the Servicer's election to purchase the
Outstanding Mortgage Loans, the Servicer shall deposit in the Collection Account
after adoption of the plan during the applicable Principal Prepayment Period an
amount equal to the purchase price as determined as provided in clause (ii) of
the preceding paragraph and on the Distribution Date on which such termination
is to occur, Certificateholders will be entitled to the amount of such purchase
price but not amounts in excess thereof, all as provided herein. Upon
presentation and surrender of the Certificates, the Master Servicer shall cause
to be distributed to Certificateholders an amount equal to (a) the amount
otherwise distributable on such Distribution Date, if not in connection with a
purchase; or (b) if the Servicer elected to so purchase, the purchase price
determined as provided in clause (ii) of the preceding paragraph. Following such
final deposit the Trustee shall promptly release to the Servicer the Mortgage
Files for the remaining Mortgage Loans, and the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer and shall have no further responsibility with regard to said Mortgage
Files.
If all of the Certificateholders shall not surrender their Certificates
for cancellation within 3 months after the time specified in the above-mentioned
written notice, at the close of the 90 day period beginning after the written
notice is given, each remaining Certificateholder will be credited with an
amount that would have been otherwise distributed to such Certificateholder, and
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within three (3) months after
the second notice all the Certificates shall not have been surrendered for
cancellation, the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, shall appoint an agent to take appropriate and
reasonable steps to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain in the Trust Fund hereunder.
[END OF ARTICLE XI]
86
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
Section 12.01. 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.
Section 12.02. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding-up of the Trust Fund, 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 expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third 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 of any provision 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 the Holders of Certificates
of any Class evidencing in the aggregate not less than 25% of the Percentage
Interests of such Class shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request) 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 sixty (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
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
87
Section 12.03. Amendment. This Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Servicer and the Trustee,
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein, to ensure continuing treatment of each REMIC Pool as a
REMIC to avoid or minimize the risk of imposition of any tax on either REMIC
Pool pursuant to the Code, or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be materially
inconsistent with the provisions of this Agreement, provided that such actions
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder of a Class having an
Outstanding Certificate Principal Balance of greater than zero or cause either
REMIC Pool to fail to qualify as a REMIC.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the
Percentage Interest of each Class of Certificates having an Outstanding
Certificate Principal Balance greater than zero and affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates of any class the Holders of which are
required to consent to any such amendment or (iii) change the percentage
specified in clause (ii) of the first paragraph of Section 11.01, without the
consent of the Holders of all Certificates of such Class then outstanding.
Notwithstanding anything to the contrary in this Agreement, this
Agreement may be amended from time to time by the Depositor, the Servicer and
the Trustee with the consent of Certificateholders evidencing not less than
66-2/3% of the interests held by parties other than the Depositor, its
Affiliates or its agents, for the purposes of significantly changing the
Permitted Activities of the Trust.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 12.03 to approve the particular form of any proposed amendment but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 12.04. Counterparts. |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 12.05. Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
Section 12.06. 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.
88
Section 12.07. 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 first class or registered mail, postage
prepaid, to (i) in the case of the Depositor, Chase Mortgage Finance
Corporation, 000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx, Xxxxxxxxx Lake, New Jersey
07675, Attention: Structured Finance, (ii) in the case of the Seller, Chase
Manhattan Mortgage Corporation, 000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx, Xxxxxxxxx
Lake, New Jersey 07675, Attention: Contract Finance, (iii) in the case of
Washington Mutual Mortgage Securities Corp., as servicer, 00 Xxxxx Xxxxxxx
Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000, Attention: Master Servicing, with a copy to
Washington Mutual Legal Department, 1201 Third Avenue, WMT 1706, Xxxxxxx, XX
00000, (iv) in the case of the Master Servicer, to the address specified above
for Chase Manhattan Mortgage Corporation with a copy to JPMorgan Chase Bank, 000
X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 0000, Attention: Global Trust Services), (v)
in the case of the Trustee, Citibank, N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx/Xxxx 0,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Department, (vi) in the
case of Moody's, Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, (vii) in the case of S & P, Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
(viii) in the case of any of the foregoing persons, such other addresses as may
hereafter be furnished by any such persons to the other parties to this
Agreement.Section 12.08. Further Assurances. The Seller and the Servicer agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement, including, without limitation,
the execution of any financing statements and the preparation for execution by
the Trustee of any continuation statements relating to the Co-op Loans for
filing under the provisions of the Uniform Commercial Code as in effect in the
jurisdiction in which the Underlying Mortgaged Property related to the affected
Co-op Loan is located. The Trustee agrees that it shall promptly execute and
redeliver to the Seller or the Servicer for filing any such continuation
statement so prepared by the Seller relating to the Co-op Loans.
[END OF ARTICLE XII]
89
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Servicer
and the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CHASE MORTGAGE FINANCE
CORPORATION
By:_______________________
Name:
Title:
CHASE MANHATTAN MORTGAGE
CORPORATION
By:_______________________
Name:
Title:
WASHINGTON MUTUAL MORTGAGE
SECURITIES CORP.
By:_______________________
Name:
Title:
CITIBANK, N.A.,
as Trustee
By:_______________________
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
A-2-1
EXHIBIT B
CONTENTS OF MORTGAGE FILE
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) (I) Original Mortgage Note (or a lost note affidavit (including a
copy of the original Mortgage Note)) or (II) original consolidation, extension
and modification agreement (or a lost note affidavit (including a copy of the
original consolidation, extension and modification agreement), in either case
endorsed, "Pay to the order of Citibank, N.A., as trustee, without recourse."
(B) The original Mortgage (including all riders thereto) with evidence
of recording thereon, or a copy thereof certified by the public recording office
in which such mortgage has been recorded or, if the original Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller, of the original Mortgage together with a
certificate of the Seller certifying that the original Mortgage has been
delivered for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
(C) With respect to each Non-MERS Mortgage Loan which is not a Co-op
Loan, the original Assignment of Mortgage to "Citibank, N.A., as trustee," which
assignment shall be in form and substance acceptable for recording, or a copy
certified by the Seller as a true and correct copy of the original Assignment of
Mortgage which has been sent for recordation. Subject to the foregoing, such
assignments may, if permitted by law, be by blanket assignments for Mortgage
Loans covering Mortgaged Properties situated within the same county. If the
Assignment of Mortgage is in blanket form, a copy of the Assignment of Mortgage
shall be included in the related individual Mortgage File.
(D) The original policy of title insurance, including riders and
endorsements thereto, or if the policy has not yet been issued, a written
commitment or interim binder or preliminary report of title issued by the title
insurance or escrow company.
(E) Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments or Mortgage have been recorded showing a complete chain of title
from the originator to the Depositor, with evidence of recording, thereon, or a
copy thereof certified by the public recording office in which such Assignment
of Mortgage has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage together
with a certificate of the Seller certifying that the original Assignment of
Mortgage has been delivered for recording in the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located.
(F) Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such document has not been returned from the
applicable public recording office, a true certified copy, certified by the
Seller, of such original document together with certificate of Seller certifying
the original of such document has been delivered for recording in the
appropriate recording office of the jurisdiction in which the Mortgaged Property
is located.
B-1
(G) If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a Person on behalf
of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such Person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power
of attorney or other such instrument has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located.
(ii) With respect to each Co-op Loan:
(i) With respect to each Co-op Loan:
(A) (I) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement)), in either case endorsed "Pay to the order
of Citibank, N.A., as trustee, without recourse."
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-op Loan.
(C) The original Assignment of Mortgage to "Citibank, N.A. as
trustee."
(D) Original assignments of Mortgage showing a complete chain
of assignment from the originator of the related Co-op Loan to the
Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect
to such Co-op Loan.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage
Loan Seller or its agent assigning the security interest covered by
such Form UCC-1 to "Citibank, N.A. as trustee," together with all Forms
UCC-3 (or copies thereof) showing a complete chain of assignment from
the originator of the related Co-op Loan to the Seller, with evidence
of recording thereon.
(G) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of
such Co-op Loan with a stock power in blank attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee,
and all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan.
(K) Origninals of any assumption, consolidation or
modification agreements relating to any of the items specified in (A)
through (F) above with respect to the Co-op Loans.
B-2
EXHIBIT C
FORM OF CLASS A CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), THE MASTER SERVICER, THE SERVICER OR THE
TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE,
THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY CMFC, THE MASTER SERVICER, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS A-1 CERTIFICATE
Number 01-S7-A-1-1 Original Denomination $_____________
Cut-off Date: November 1, 2001 Final Scheduled
Distribution Date: December 26, 2031
First Distribution Date: Aggregate Original Principal
December 26, 2001 Balance of all Class A-1
Certificates: $_____________
Certificate Rate: _______ CUSIP: 16162T __ _
C-1
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2001-S7
evidencing an ownership interest in distributions allocable to the Class A-1
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Original
Denomination of all Class A-1 Certificates) in certain distributions with
respect to a pool of conventional one- to four-family first lien mortgage loans
(the "Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(hereinafter called the "Depositor"), and certain other property held in trust
for the benefit of Certificateholders (collectively, the "Trust Fund"). The
Mortgage Loans are serviced by Washington Mutual Mortgage Securities Corp. (the
"Servicer") and are secured by first mortgages on Mortgaged Properties. The
Trust Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 2001 among the Depositor, the Servicer,
Chase Manhattan Mortgage Corporation, as master servicer (the "Master Servicer")
and Citibank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
Class A-1 (the "Class A-1 Certificates") and 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 Agreement such Holder is bound. Also issued under the Agreement are
Certificates designated as Multi-Class Mortgage Pass-Through Certificates,
Series 2001-S7, Class M Certificates (the "Class M Certificates") and Class B
Certificates (the "Class B Certificates"). The Class A Certificates, the Class M
Certificates and the Class B Certificates are collectively referred to herein as
the "Certificates."
C-2
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on December 26, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate original denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement the Paying Agent, for the purpose and specified in such
notice of final distribution.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-3
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: November __, 2001 CHASE MORTGAGE FINANCE
CORPORATION
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
--------------------------------
Authorized Signatory
C-4
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2001-S7
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
issued in twelve Classes of Class A Certificates, one Class of Class M
Certificates and five Classes of Class B Certificates, each evidencing an
interest in certain distributions with respect to a pool of fixed rate one- to
four-family first lien Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee. The Class A
Certificates evidence in the aggregate the Class A Percentage of distributions
relating to repayments of principal and interest on such Mortgage Loans. The
Class M Certificates evidence in the aggregate the Class M Percentage of
distributions relating to repayments of principal and interest on such Mortgage
Loans. The Class B Certificates evidence in the aggregate the Class B Percentage
of distributions relating to repayments of principal and interest on such
Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Master Servicer, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, 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 the Certificate.
Prior to due presentation of a Certificate for registration of transfer, the
Depositor, the Master Servicer, the Paying Agent and the Trustee may treat the
person in whose name any Certificate is registered as the owner of such
Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Paying Agent nor the Trustee will be affected by notice to the contrary.
C-5
The Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicer and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions therein which may be inconsistent with the other provisions therein,
to ensure continuing treatment of each REMIC included in the Trust Fund as a
REMIC (as hereinafter defined), or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder or cause any of the
REMICs included in the Trust Fund to fail to qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the
Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates of any Class the Holders of which are
required to consent to any such amendment or (iii) change the percentage
specified in clause (ii) of the first paragraph of Section 11.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.
The Depositor intends to cause an election to be made to treat the
segregated pool comprising the assets of the Trust Fund (the "Subsidiary REMIC")
as a real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes. The Depositor intends to cause an election to be made to treat the
pool of assets represented by the "regular interests" in the Subsidiary REMIC as
a separate REMIC (the "Master REMIC"). The Class A Certificates, the Class M
Certificates and the Class B Certificates (other than the Class A-R Certificate)
will constitute "regular interests" in the Master REMIC. The Class A-R
Certificate will represent the sole class of "residual interests" in each of the
Subsidiary REMIC and the Master REMIC.
The respective obligations and responsibilities of the Depositor, the
Master Servicer, the Servicer (except the duty to pay the Trustee's fees and
expenses and indemnification hereunder) and the Trustee shall terminate upon (i)
the later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee and the Master Servicer of
its intention to so deposit on or before the 20th day of such Principal
Prepayment Period) an amount equal to the greater of (A) the Purchase Price for
each Outstanding Mortgage Loan, less any unreimbursed Advances made with respect
to any Mortgage Loan (which amount shall offset completely any unreimbursed
Advances for which the Servicer is otherwise entitled to reimbursement), and,
with respect to all property acquired in respect of any Mortgage Loan remaining
in the Trust Fund, an amount equal to the fair market value of such property, as
determined by an appraisal to be conducted by an appraiser selected by the
Trustee, less unreimbursed Advances made with respect to any Mortgage Loan with
respect to which property has been acquired and (B) the aggregate Outstanding
Certificate Principal Balance of the Class A, Class M, Class B-1 and Class B-2
Certificates, plus any accrued and unpaid interest thereon at the Remittance
Rate; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death 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.
C-6
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
________________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
(Signature guaranty)
-------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Certificate
in every particular, without
alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
C-7
EXHIBIT D
FORM OF CLASS M CERTIFICATE
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), THE MASTER SERVICER, the SERVICER OR THE
TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE,
THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY CMFC, THE MASTER SERVICER, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE IF SUCH CERTIFICATE IS AN ERISA
RESTRICTED CERTIFICATE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT).] NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") (A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF
OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH
ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY
SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) SUCH TRANSFEREE IS AN
INSURANCE COMPANY AND THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES
IS AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATES IS EXEMPT UNDER PTCE
95-60, OR (ii) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF
A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE OR SIMILAR LAW
(OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY
SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO
EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE
OR HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN ASSET
REGULATIONS SET FORTH IN 29 C.F.R. "2510.3-101 AND TO BE SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA OR THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN
A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, CMFC OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF
THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
D-1
CLASS M CERTIFICATE
Number 01-S7-M-1 Original Denomination
$------------
Cut-off Date: November 1, 2001 Final Scheduled
Distribution Date: December 26, 2031
First Distribution Date: Aggregate Original Principal
December 26, 2001 Balance of all Class M
Certificates: $____________
Certificate Rate: ______ CUSIP: 16162T __ _
D-2
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2001-S7
evidencing an ownership interest in distributions allocable to the Class M
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Original
Denomination of all Class M Certificates) in certain distributions with respect
to a pool of conventional one- to four-family first lien mortgage loans (the
"Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(hereinafter called the "Depositor"), and certain other property held in trust
for the benefit of Certificateholders (collectively, the "Trust Fund"). The
Mortgage Loans are serviced by Washington Mutual Mortgage Securities Corp. (the
"Servicer") and are secured by first mortgages on Mortgaged Properties. The
Trust Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 2001 among the Depositor, the Servicer,
Chase Manhattan Mortgage Corporation, as master servicer (the "Master Servicer")
and Citibank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
Class M (the "Class M Certificates") and 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
Agreement such Holder is bound. Also issued under the Agreement are Certificates
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
Class A (the "Class A Certificates") and Class B (the "Class B Certificates").
The Class A Certificates are senior to, and the Class B Certificates are
subordinate to, the Class M Certificates in right of payment to the extent
described herein and in the Agreement. The Class A Certificates, the Class M
Certificates and the Class B Certificates are collectively referred to herein as
the "Certificates." Amounts properly distributed to the Class M
Certificateholders pursuant to the Agreement will be deemed released from the
Trust Fund, and the Class M Certificateholders will not in any event be required
to refund any such distributed amounts.
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on December 26, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
D-3
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate original denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: November __, 2001 CHASE MORTGAGE FINANCE
CORPORATION
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
----------------------------------
Authorized Signatory
D-5
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2001-S7
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
issued in twelve Classes of Class A Certificates, one Class of Class M
Certificates and five Classes of Class B Certificates, each evidencing an
interest in certain distributions with respect to a pool of fixed rate one- to
four-family first lien Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee. The Class A
Certificates evidence in the aggregate the Class A Percentage of distributions
relating to repayments of principal and interest on such Mortgage Loans. The
Class M Certificates evidence in the aggregate the Class M Percentage of
distributions relating to repayments of principal and interest on such Mortgage
Loans. The Class B Certificates evidence in the aggregate the Class B Percentage
of distributions relating to repayments of principal and interest on such
Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Master Servicer, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, 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 the Certificate.
Prior to due presentation of a Certificate for registration of transfer, the
Depositor, the Master Servicer, the Paying Agent and the Trustee may treat the
person in whose name any Certificate is registered as the owner of such
Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Paying Agent nor the Trustee will be affected by notice to the contrary.
D-6
The Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicer and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions therein which may be inconsistent with the other provisions therein,
to ensure continuing treatment of each REMIC included in the Trust Fund as a
REMIC (as hereinafter defined), or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder or cause any of the
REMICs included in the Trust Fund to fail to qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the
Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates of any Class the Holders of which are
required to consent to any such amendment or (iii) change the percentage
specified in clause (ii) of the first paragraph of Section 11.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.
The Depositor intends to cause an election to be made to treat the
segregated pool comprising the assets of the Trust Fund (the "Subsidiary REMIC")
as a real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes. The Depositor intends to cause an election to be made to treat the
pool of assets represented by the "regular interests" in the Subsidiary REMIC as
a separate REMIC (the "Master REMIC"). The Class A Certificates, the Class M
Certificates and the Class B Certificates (other than the Class A-R Certificate)
will constitute "regular interests" in the Master REMIC. The Class A-R
Certificate will represent the sole class of "residual interests" in each of the
Subsidiary REMIC and the Master REMIC.
The respective obligations and responsibilities of the Depositor, the
Master Servicer, the Servicer (except the duty to pay the Trustee's fees and
expenses and indemnification hereunder) and the Trustee shall terminate upon (i)
the later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee and the Master Servicer of
its intention to so deposit on or before the 20th day of such Principal
Prepayment Period) an amount equal to the greater of (A) the Purchase Price for
each Outstanding Mortgage Loan, less any unreimbursed Advances made with respect
to any Mortgage Loan (which amount shall offset completely any unreimbursed
Advances for which the Servicer is otherwise entitled to reimbursement), and,
with respect to all property acquired in respect of any Mortgage Loan remaining
in the Trust Fund, an amount equal to the fair market value of such property, as
determined by an appraisal to be conducted by an appraiser selected by the
Trustee, less unreimbursed Advances made with respect to any Mortgage Loan with
respect to which property has been acquired and (B) the aggregate Outstanding
Certificate Principal Balance of the Class A, Class M, Class B-1 and Class B-2
Certificates, plus any accrued and unpaid interest thereon at the Remittance
Rate; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death 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.
D-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
(Signature guaranty)
-------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Certificate
in every particular, without
alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure
that the assignee will not be subject to backup withholding under Section 3406
of the Code.)
D-8
EXHIBIT E
FORM OF CLASS B CERTIFICATE
THIS CLASS B-1 CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), THE MASTER SERVICER, the SERVICER OR THE
TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE,
THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY CMFC, THE MASTER SERVICER, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE IF SUCH CERTIFICATE IS AN ERISA
RESTRICTED CERTIFICATE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT).] NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR MATERIALLY
SIMILAR PROVISION OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") (A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF
OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH
ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY
SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) SUCH TRANSFEREE IS AN
INSURANCE COMPANY AND THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES
IS AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATES IS EXEMPT UNDER PTCE
95-60, OR (ii) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF
A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE OR SIMILAR LAW
(OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY
SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO
EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE
OR HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN ASSET
REGULATIONS SET FORTH IN 29 C.F.R. "2510.3-101 AND TO BE SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA OR THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN
A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, CMFC OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF
THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES.
E-1
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS B-1 CERTIFICATE
Number 01-S7-B-1-1 Original Denomination
$------------
Cut-off Date: November 1, 2001 Final Scheduled
Distribution Date: December 26, 2031
First Distribution Date: Aggregate Original Principal
December 26, 2001 Balance of all Class B-1
Certificates: $_____________
Certificate Rate: ______ CUSIP: 16162T __ _
E-2
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2001-S7
evidencing an ownership interest in distributions allocable to the Class B-1
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
This certifies that __________ is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Original
Denomination of all Class B-1 Certificates) in certain distributions with
respect to a pool of conventional one- to four-family first lien mortgage loans
(the "Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(hereinafter called the "Depositor"), and certain other property held in trust
for the benefit of Certificateholders (collectively, the "Trust Fund"). The
Mortgage Loans are serviced by Washington Mutual Mortgage Securities Corp. (the
"Servicer") and are secured by first mortgages on Mortgaged Properties. The
Trust Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 2001 among the Depositor, the Servicer,
Chase Manhattan Mortgage Corporation, as master servicer (the "Master Servicer")
and Citibank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
Class B-1 (the "Class B-1 Certificates") and 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 Agreement such Holder is bound. Also issued under the Agreement are
Certificates designated as Multi-Class Mortgage Pass-Through Certificates,
Series 2001-S7, Class A Certificates (the "Class A Certificates") and Class M
(the "Class M Certificates"). The rights of the Class B-1 Certificateholders to
receive distributions in respect of the Class B Certificates on any Distribution
Date are subordinated to the rights of the Class A and Class M
Certificateholders to receive distributions in respect of the Class A and Class
M Certificates to the extent, and only to the extent, set forth in the
Agreement. The Class A Certificates, the Class M Certificates and the Class B
Certificates are collectively referred to herein as the "Certificates." Amounts
properly distributed to the Class B Certificateholders pursuant to the Agreement
will be deemed released from the Trust Fund, and the Class B Certificateholders
will not in any event be required to refund any such distributed amounts.
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on December 26, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate original denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
E-3
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
E-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: November __, 2001 CHASE MORTGAGE FINANCE
CORPORATION
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
E-5
REVERSE OF CERTIFICATE
MULTI-PASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2001-S7
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
issued in twelve Classes of Class A Certificates, one Class of Class M
Certificates and five Classes of Class B Certificates, each evidencing an
interest in certain distributions with respect to a pool of fixed rate one- to
four-family first lien Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee. The Class A
Certificates evidence in the aggregate the Class A Percentage of distributions
relating to repayments of principal and interest on such Mortgage Loans. The
Class M Certificates evidence in the aggregate the Class M Percentage of
distributions relating to repayments of principal and interest on such Mortgage
Loans. The Class B Certificates evidence in the aggregate the Class B Percentage
of distributions relating to repayments of principal and interest on such
Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Master Servicer, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, 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 the Certificate.
Prior to due presentation of a Certificate for registration of transfer, the
Depositor, the Master Servicer, the Paying Agent and the Trustee may treat the
person in whose name any Certificate is registered as the owner of such
Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Paying Agent nor the Trustee will be affected by notice to the contrary.
E-6
The Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicer and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions therein which may be inconsistent with the other provisions therein,
to ensure continuing treatment of each REMIC included in the Trust Fund as a
REMIC (as hereinafter defined), or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder or cause any of the
REMICs included in the Trust Fund to fail to qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the
Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates of any Class the Holders of which are
required to consent to any such amendment or (iii) change the percentage
specified in clause (ii) of the first paragraph of Section 11.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.
The Depositor intends to cause an election to be made to treat the
segregated pool comprising the assets of the Trust Fund (the "Subsidiary REMIC")
as a real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes. The Depositor intends to cause an election to be made to treat the
pool of assets represented by the "regular interests" in the Subsidiary REMIC as
a separate REMIC (the "Master REMIC"). The Class A Certificates, the Class M
Certificates and the Class B Certificates (other than the Class A-R Certificate)
will constitute "regular interests" in the Master REMIC. The Class A-R
Certificate will represent the sole class of "residual interests" in each of the
Subsidiary REMIC and the Master REMIC.
The respective obligations and responsibilities of the Depositor, the
Master Servicer, the Servicer (except the duty to pay the Trustee's fees and
expenses and indemnification hereunder) and the Trustee shall terminate upon (i)
the later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee and the Master Servicer of
its intention to so deposit on or before the 20th day of such Principal
Prepayment Period) an amount equal to the greater of (A) the Purchase Price for
each Outstanding Mortgage Loan, less any unreimbursed Advances made with respect
to any Mortgage Loan (which amount shall offset completely any unreimbursed
Advances for which the Servicer is otherwise entitled to reimbursement), and,
with respect to all property acquired in respect of any Mortgage Loan remaining
in the Trust Fund, an amount equal to the fair market value of such property, as
determined by an appraisal to be conducted by an appraiser selected by the
Trustee, less unreimbursed Advances made with respect to any Mortgage Loan with
respect to which property has been acquired and (B) the aggregate Outstanding
Certificate Principal Balance of the Class A, Class M, Class B-1 and Class B-2
Certificates, plus any accrued and unpaid interest thereon at the Remittance
Rate; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death 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.
E-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
(Signature guaranty)
-------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Certificate
in every particular, without
alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure
that the assignee will not be subject to backup withholding under Section 3406
of the Code.)
E-8
EXHIBIT F
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN EACH OF Two "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), THE MASTER SERVICER, the SERVICER OR THE
TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE,
THE REMIC RESIDUAL INTERESTS REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED OR INSURED BY CMFC, the master servicer, the servicer, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") (A "PLAN"), AND IS NOT
DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS INVESTMENT
MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN
THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT
SUCH ACQUISITION, OR (ii) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN
THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE OR
SIMILAR LAW (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A
TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY
SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT
THE PURCHASE OR HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE
TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR
PLAN ASSET REGULATIONS SET FORTH IN 29 C.F.R. ss.2510.3-101 AND TO BE SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA OR THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN
A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION
OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975
OF THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES.
TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED UNDER THE PROVISIONS OF
SECTION 4.02 OF THE AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT principal balance BY
INQUIRY OF THE TRUSTEE.
F-1
CLASS A-R CERTIFICATE
Number 01-S7-A-R-1 Original Denomination
$100.00
Cut-off Date: November 1, 2001 Final Scheduled
Distribution Date: December 26, 2031
First Distribution Date: Aggregate Original Principal
December 26, 2001 Balance of Class A-R
Certificate: $100.00
Certificate Rate: _____ CUSIP: 16162T __ _
F-2
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2001-S7
evidencing an ownership interest in distributions allocable to the Class A-R
Certificate with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
This certifies that Credit Suisse First Boston Corporation is the
registered owner of the ownership interest (the "Ownership Interest") evidenced
by this Certificate in certain distributions with respect to a pool of
conventional one- to four-family first lien mortgage loans (the "Mortgage
Loans") formed and sold by Chase Mortgage Finance Corporation (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Washington Mutual Mortgage Securities Corp. (the
"Servicer") and are secured by first mortgages on Mortgaged Properties. The
Trust Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 2001 among the Depositor, the Servicer,
Chase Manhattan Mortgage Corporation, as master servicer (the "Master Servicer")
and Citibank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
Class A-R (the "Class A-R Certificate") and 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 Agreement such Holder is bound. Also issued under the Agreement are
Certificates designated as Multi-Class Mortgage Pass-Through Certificates,
Series 2001-S7, Class M Certificates (the "Class M Certificates") and Class B
Certificates (the "Class B Certificates"). The Class A Certificates, the Class M
Certificates and the Class B Certificates are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on December 26, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate original denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
F-3
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
F-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: November __, 2001 CHASE MORTGAGE FINANCE
CORPORATION
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is the Class A-R
Certificate referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
----------------------------------
Authorized Signatory
F-5
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2001-S7
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2001-S7,
issued in twelve Classes of Class A Certificates, one Class of Class M
Certificates and five Classes of Class B Certificates, each evidencing an
interest in certain distributions with respect to a pool of fixed rate one- to
four-family first lien Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee. The Class A
Certificates evidence in the aggregate the Class A Percentage of distributions
relating to repayments of principal and interest on such Mortgage Loans. The
Class M Certificates evidence in the aggregate the Class M Percentage of
distributions relating to repayments of principal and interest on such Mortgage
Loans. The Class B Certificates evidence in the aggregate the Class B Percentage
of distributions relating to repayments of principal and interest on such
Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Master Servicer, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, 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 the Certificate.
Prior to due presentation of a Certificate for registration of transfer, the
Depositor, the Master Servicer, the Paying Agent and the Trustee may treat the
person in whose name any Certificate is registered as the owner of such
Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Paying Agent nor the Trustee will be affected by notice to the contrary.
F-6
The Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicer and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions therein which may be inconsistent with the other provisions therein,
to ensure continuing treatment of each REMIC included in the Trust Fund as a
REMIC (as hereinafter defined), or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder or cause any of the
REMICs included in the Trust Fund to fail to qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the
Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates of any Class the Holders of which are
required to consent to any such amendment or (iii) change the percentage
specified in clause (ii) of the first paragraph of Section 11.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.
The Depositor intends to cause an election to be made to treat the
segregated pool comprising the assets of the Trust Fund (the "Subsidiary REMIC")
as a real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes. The Depositor intends to cause an election to be made to treat the
pool of assets represented by the "regular interests" in the Subsidiary REMIC as
a separate REMIC (the "Master REMIC"). The Class A Certificates, the Class M
Certificates and the Class B Certificates (other than the Class A-R Certificate)
will constitute "regular interests" in the Master REMIC. The Class A-R
Certificate will represent the sole class of "residual interests" in each of the
Subsidiary REMIC and the Master REMIC.
The respective obligations and responsibilities of the Depositor, the
Master Servicer, the Servicer (except the duty to pay the Trustee's fees and
expenses and indemnification hereunder) and the Trustee shall terminate upon (i)
the later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee and the Master Servicer of
its intention to so deposit on or before the 20th day of such Principal
Prepayment Period) an amount equal to the greater of (A) the Purchase Price for
each Outstanding Mortgage Loan, less any unreimbursed Advances made with respect
to any Mortgage Loan (which amount shall offset completely any unreimbursed
Advances for which the Servicer is otherwise entitled to reimbursement), and,
with respect to all property acquired in respect of any Mortgage Loan remaining
in the Trust Fund, an amount equal to the fair market value of such property, as
determined by an appraisal to be conducted by an appraiser selected by the
Trustee, less unreimbursed Advances made with respect to any Mortgage Loan with
respect to which property has been acquired and (B) the aggregate Outstanding
Certificate Principal Balance of the Class A, Class M, Class B-1 and Class B-2
Certificates, plus any accrued and unpaid interest thereon at the Remittance
Rate; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death 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.
F-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
________________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
(Signature guaranty)
-------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Certificate
in every particular, without
alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
F-8
EXHIBIT G
FORM OF TRUSTEE CERTIFICATION
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Re: Pooling and Servicing Agreement dated as of November
1, 2001 among Chase Mortgage Finance Corporation,
Chase Manhattan Mortgage Corporation as master
servicer, Washington Mutual Mortgage Securities Corp.
as servicer and Citibank, N.A., as trustee,
Multi-Class Mortgage Pass-Through Certificates,
Series 2001-S7
-----------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that
[, except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:
(i) All documents in the Mortgage File required to be
delivered to the Trustee pursuant to Section 2.01 of the Pooling and
Servicing Agreement are in its possession;
(ii) In connection with each Mortgage Loan or Assignment
thereof as to which documentary evidence of recording was not received
on the Closing Date, it has received evidence of such recording; and
(iii) Such documents have been reviewed by it and such
documents do not contain any material omissions or defects within the
meaning of Section 2.01 or 2.02.
The Trustee further certifies that as to each Mortgage Loan, the
Trustee holds the Mortgage Note without any Responsible Officer of the Trustee
having received written notice (a) of any adverse claims, liens or encumbrances,
(b) that any Mortgage Note was overdue or has been dishonored, (c) of evidence
on the face of any Mortgage Note or Mortgage of any security interest therein,
or (d) of any defense against or claim to the Mortgage Note by any other party.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number and the name of the Mortgagor in each Mortgage File conform to the
respective Mortgage Loan number and name listed on the Mortgage Loan Schedule
and (ii) the existence in each Mortgage File of each of the documents listed in
subparagraphs (i)(A) through (G), inclusive, of Section 2.01 in the Agreement.
The Trustee makes no representations or warranties as to the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
each Mortgage Loan or the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
G-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
CITIBANK, N.A., as Trustee
By: _____________________________
Name: ___________________________
Title: __________________________
G-2
EXHIBIT H
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
Chase Manhattan Mortgage Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Chase Mortgage Finance Corporation Multi-Class
Mortgage Pass-Through Certificates, Series 2001-S7,
[Class B- ]
---------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series 2001-S7, [Class B- ] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of November 1, 2001 (the "Pooling
and Servicing Agreement"), among Chase Mortgage Finance Corporation (the
"Depositor"), Chase Manhattan Mortgage Corporation, as master servicer (together
with its permitted successors and assigns, the "Master Servicer"), Washington
Mutual Mortgage Securities Corp., as servicer (together with its permitted
successors and assigns, the "Servicer") and Citibank, N.A., as trustee (the
"Trustee"). [The Purchaser intends to register the Transferred Certificate in
the name of ____________________, as nominee for __________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
H-1
2. The Certificates will bear a legend to the following effect:
THIS CLASS B CERTIFICATE HAS NOT 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 SOLD OR TRANSFERRED
IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 4.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS
AN ERISA RESTRICTED CERTIFICATE.] NO TRANSFER OF THIS CERTIFICATE SHALL
BE MADE UNLESS THE DEPOSITOR SHALL HAVE RECEIVED EITHER (i) A
REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE
EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") OR MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW (?SIMILAR LAW?) (A ?PLAN?),
AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF
OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR
WITH ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE
ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) THE
SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES IS AN "INSURANCE
COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATES IS EXEMPT UNDER
PTCE 95-60, OR (ii) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION
IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF
THE CODE OR SIMILAR LAW (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO IS
USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION, AN
OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING
DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN
ASSET REGULATIONS SET FORTH IN 29 C.F.R. ss.2510.3-101 AND TO BE
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE OR SIMILAR LAW,
WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE
CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE SERVICER,
CMFC OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF
THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES.
3. The Purchaser is acquiring the Transferred Certificates for its own
account [for investment only]*/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
------------------------
*/ Not required of a broker/dealer purchaser.
H-2
4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it authorize
any Person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any Person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
6. [This paragraph may be deleted if the Purchaser provides the Opinion
of Counsel referred to in clause (ii) of Section 4.02(d) of the Pooling and
Servicing Agreement or if the Purchaser is purchasing an ERISA Restricted
Certificate.] The Purchaser either (A) is not an employee benefit plan within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or a plan within the meaning of Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") or any materially similar
provisions of applicable federal, state or local law (each, a "Plan"), and is
not directly or indirectly purchasing any Certificate on behalf of, as
investment manager of, as named fiduciary of, as trustee of or with assets of a
Plan or directly or indirectly purchasing any certificates with the assets of
any insurance company separate account or of any Plan or (B) is an insurance
company and the source of funds for the purchase of the certificates is an
"insurance company general account" within the meaning of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and
the purchase and holding of the Certificates is exempt under PTCE 95-60.
7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit I to the Pooling and Servicing Agreement.
H-3
8. The Purchaser agrees to indemnify the Trustee, the Master Servicer,
the Servicer and the Depositor against any liability that may result from any
misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
H-4
EXHIBIT I
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
Chase Manhattan Mortgage Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
JPMorgan Chase Bank
Global Trust Services
15th Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Re: Chase Mortgage Finance Corporation, Multi-Class
Mortgage Pass-Through Certificates, Series 2001-S7,
[Class B- ]
---------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series 2001-S7, [Class B-] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of November 1, 2001 (the "Pooling
and Servicing Agreement"), among Chase Mortgage Finance Corporation (the
"Depositor"), Chase Manhattan Mortgage Corporation, as master servicer (together
with its permitted successors and assigns, the "Master Servicer"), Washington
Mutual Mortgage Securities Corp., as servicer (together with its permitted
successors and assigns, the "Servicer") and Citibank, N.A., as trustee (the
"Trustee"). [The Purchaser intends to register the Transferred Certificate in
the name of ____________________, as nominee for __________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
I-1
In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates, (d)
we are not an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, or a plan
within the meaning of Section 4975 of the Internal Revenue Code of 1986 (the
"Code"), as amended or any retirement plan or other employee benefit plan
subject to any federal, state or local law materially similar to the foregoing
provisions of ERISA or the Code (each, a "Plan"), nor are we directly or
indirectly purchasing any Certificate on behalf of, as investment manager of, as
named fiduciary of, as trustee of or with assets of a Plan or directly or
indirectly purchasing any certificates with the assets of any insurance company
separate account or of any Plan [or alternatively, if we are an insurance
company, the source of funds for the purchase of the certificates] is an
"insurance company general account" within the meaning of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60"), 50 Fed. Reg. 35925 (July 12, 1995), and
the purchase and holding of the Certificates is exempt under PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred Certificates for our own account or for resale pursuant to Rule 144A
and further understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed by us, based upon
certifications of such purchaser or information we have in our possession, to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
I-2
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the 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 $____________*/ 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 Federal, 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
such institution or is a foreign savings and loan
association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934, as amended.
----------------------
* 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.
I-3
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of the 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, as amended.
____ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940, as amended.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958, as
amended.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
I-4
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Date:
----------------------------------------
I-5
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other
than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $__________ in
securities (other than the excluded securities
referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
I-6
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
IF AN ADVISER:
Print Name of Buyer
Date:
-------------------------------
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
FORM OF TRANSFEREE'S LETTER
CHASE MORTGAGE FINANCE CORPORATION SERIES 2001-S7
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
We propose to purchase Chase Mortgage Finance Corporation's Multi-Class
Mortgage Pass-Through Certificates, Series 2001-S7, Class A-R, described in the
Prospectus Supplement, dated November 26, 2001 and Prospectus, dated August 23,
2001.
1. We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class A-R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that we are not an employee benefit plan subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Code or materially similar provisions or
applicable federal, state or local law, nor a person acting on behalf of any
such plan or using the assets of such plan, or, alternatively, in the case of an
insurance company, the assets of any separate accounts to effect such
acquisition.
3. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class A-R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class A-R Certificate, and (d) we
intend to pay any taxes associated with holding the Class A-R Certificate as
they become due.
4. We acknowledge that we will be the beneficial owner of the Class A-R
Certificate and:*/ -
-----------------------
*/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
K-1
______ The Class A-R Certificate will be registered in our
name.
______ The Class A-R Certificate will be held in the name of
our nominee, ____________________, which is not a
disqualified organization.
5. Unless Chase Mortgage Finance Corporation ("CMFC") has consented to
the transfer to us by executing the form of Consent affixed hereto as Appendix
B, we certify that we are a U.S. person; for this purpose the term "U.S. Person"
means a citizen or resident of the United States, a corporation or partnership
(unless, in the case of a partnership, Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, including an entity
treated as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to Unites States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust, and one or more such
U.S. Persons have the authority to control all substantial decisions of such
trust, (or, to the extent provided in applicable Treasury regulations, certain
trusts in existence on August 20, 1996 which are eligible to elect to be treated
as U.S. Persons). We agree that any breach by us of this certification shall
render the transfer of any interest in the Class A-R Certificate to us
absolutely null and void and shall cause no rights in the Class A-R Certificate
to vest in us.
6. We agree that in the event that at some future time we wish to
transfer any interest in the Class A-R Certificate, we will transfer such
interest in the Class A-R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class A-R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person and
(iii) has delivered to CMFC a letter in the form of this letter (including the
affidavit appended hereto) and, if requested by CMFC, an opinion of counsel (in
a form acceptable to CMFC) that the proposed transfer will not cause the
interest in the Class A-R Certificate to be held by a disqualified organization
or a person who is not a U.S. person or (b) with the written consent of CMFC.
K-2
We hereby designate Chase Manhattan Mortgage Corporation as our
fiduciary to act as the tax matters person for the Series 2001-S7 REMIC.
Very truly yours,
[PURCHASER]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Accepted as of , 200_
---------------
CHASE MORTGAGE FINANCE CORPORATION
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
K-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the Internal Revenue Code of
1986, as amended, and (ii) certain provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following
is true:
(1) He or she is an officer of _________________________ (the
"Transferee"),
(2) the Transferee's Employer Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as
defined below), has no plan or intention of becoming a
disqualified organization, and is not acquiring any of its
interest in the Chase Mortgage Finance Corporation,
Multi-Class Mortgage Pass-Through Certificates, Series
2001-S7, Class A-R on behalf of a disqualified organization or
any other entity,
(4) unless Chase Mortgage Finance Corporation ("CMFC") has
consented to the transfer to the Transferee by executing the
form of Consent affixed as Appendix B to the Transferee's
Letter to which this Certificate is affixed as Appendix A, the
Transferee is a "U.S. Person" (as defined below),
(5) that no purpose of the transfer is to avoid or impede the
assessment or collection of tax,
(6) the Transferee has historically paid its debts as they became
due,
(7) the Transferee intends, and believes that it will be able, to
continue to pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the
Class A-R Certificate, it may incur tax liabilities in excess
of any cash flows generated by the Class A-R Certificate,
(9) the Transferee intends to pay any taxes associated with
holding the Class A-R Certificate as they become due,
(10) the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by CMFC
(upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Class A-R Certificate will not
be owned directly or indirectly by a disqualified
organization, and
(11) [the present value of the anticipated tax liabilities
associated with holding the Class A-R Certificate does not
exceed the sum of:
(A) the present value of any consideration given to the
Transferee to acquire the Class A-R Certificate;
(B) the present value of the expected future distributions on
the Class A-R Certificate; and
(C) the present value of the anticipated tax savings
associated with holding the Class A-R Certificate as the Trust Fund
generates losses.
K-4
For purposes of this declaration, (i) the Transferee is assumed to pay
tax at a rate equal to the highest rate of tax specified in Section
11(b)(1) of the Code, and (ii) present values are computed using a
discount rate equal to the applicable Federal rate prescribed by
Section 1274(d) of the Code or a lower discount rate if the Transferee
can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from unrelated third
parties;]
[(11) (A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the year of transfer, the
Transferee's gross assets for financial reporting purposes exceed $100
million and its net assets for financial reporting purposes exceed $10
million; and
(B) the Transferee is an eligible corporation as defined in
Section 860L(a)(2) of the Code and has made a written agreement that
any subsequent transfer of the Class A-R Certificate will be to another
eligible corporation that satisfies Section 4 of Revenue Procedure
2001-12, and such transfer will not be a transfer to a foreign branch
of an eligible corporation or any other arrangement by which the Class
A-R Certificate is at any time subject to net tax by a country other
than the United States or by a possession of the United States.
For purposes of this declaration, (i) the gross assets and net assets
of the Transferee do not include any obligation of any person related
to the Transferee (as defined in Section 860L(g) of the Code) or any
other asset if a principal purpose for holding or acquiring that asset
is to permit the Transferee to make this declaration or to satisfy the
requirements of Section 6 of Revenue Procedure 2001-12;]
[(11) [Intentionally left blank;]
For purpose of this affidavit, the term "disqualified organization"
means the United States, any state or political subdivision thereof,
any foreign government, any international organization, any agency or
instrumentality of any of the foregoing (except any entity treated as
other than an instrumentality of the foregoing for purposes of Section
168(h)(2)(D) of the Internal Revenue Code of 1986, as amended (the
"Code")), any organization (other than a cooperative described in
Section 521 of the Code) that is exempt from taxation under the Code
(unless such organization is subject to tax on excess inclusions) and
any organization that is described in Section 1381(a)(2)(C) of the Code
and the term "U.S. Person" means a citizen or resident of the United
States, a corporation or partnership (unless, in the case of a
partnership, Treasury regulations are adopted that provide otherwise)
created or organized in or under the laws of the United States, any
state thereof or the District of Columbia, including an entity treated
as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to Unites States federal income tax
regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration
of such trust, and one or more such U.S. Persons have the authority to
control all substantial decisions of such trust, (or, to the extent
provided in applicable Treasury regulations, certain trusts in
existence on August 20, 1996 which are eligible to elect to be treated
as U.S. Persons).
K-5
----------------------------------------
By:
-------------------------------------
----------------------------------------
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
----------------------------------------
, Secretary
----------------------------------------
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this day of , 200 .
------- ----------- --
Notary Public
County of
----------------------------------
State of
-----------------------------------
My commission expires the day of
-------- --------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Dated:
------------------------------
K-6
APPENDIX B
CONSENT
(Transferee)
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Ladies and Gentlemen:
Chase Mortgage Finance Corporation ("CMFC") hereby consents to the
transfer to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Multi-Class
Mortgage Pass-Through Certificates, Series 2001-S7, Class A-R described in the
Transferee's Letter to which this Consent is appended, notwithstanding CMFC's
knowledge that the Transferee is not a U.S. Person (as defined in such
Transferee's Letter).
CHASE MORTGAGE FINANCE CORPORATION
By:
--------------------------------
Dated:
-------------------------
K-7
EXHIBIT L
REQUEST FOR RELEASE OF DOCUMENTS
To: Citibank, N.A.
000 Xxxx Xxxxxx
00xx Xxxxx/Xxxx 0
Xxx Xxxx, XX 00000
Re: Pooling and Servicing Agreement, dated as of November
1, 2001, by and among Chase Mortgage Finance
Corporation, Chase Manhattan Mortgage Corporation,
Washington Mutual Mortgage Securities Corp. and
Citibank, N.A. relating to the issuance of the Series
2001-S7 Multi-Class Mortgage Pass-Through
Certificates
-----------------------------------------------------
In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
--------------------------------------------
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation
_______ 5. Nonliquidation Reason:
----------------------------------------
By:
-------------------------------------
(authorized signer)
Issuer:
---------------------------------
Address:
--------------------------------
Date:
-----------------------------------
L-1
Trustee
-------
Citibank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
---------------------------------------
Signature Date
Documents returned to Trustee:
---------------------------------------
Trustee Date
L-2
EXHIBIT M
TRANSFEREE ERISA REPRESENTATION LETTER
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series 2001-S7, [Class M]
[Class B- ]
--------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificate") of Multi-Class Mortgage Pass-Through
Certificates, Series 2001-S7, [Class M] [Class B-__] (the "Certificates"),
issued pursuant to a pooling and servicing agreement, dated as of November 1,
2001 (the "Pooling and Servicing Agreement"), among Chase Mortgage Finance
Corporation (the "Depositor"), Chase Manhattan Mortgage Corporation, as master
servicer (together with its permitted successors and assigns, the "Master
Servicer"), Washington Mutual Mortgage Securities Corp., as servicer (together
with its permitted successors and assigns, the "Servicer") and Citibank, N.A.,
as trustee (the "Trustee"). [The Purchaser intends to register the Transferred
Certificate in the name of ____________________, as nominee for
__________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, we hereby certify, represent and warrant to, and
covenant with, the Depositor that:
(a) we are not an employee benefit plan subject to Section 406
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") or any materially similar provisions of applicable
federal, state or local law, nor a person acting on behalf of any such
plan or using the assets of such plan, or, alternatively, in the case
of an insurance company, the assets of any separate accounts to effect
such acquisition, or alternatively, (b) the source of funds for the
purchase of such Transferred Certificate is an "insurance company
general account" within the meaning of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and
the acquisition and holding of such Transferred Certificate is exempt
under PTCE 95-60.
M-1
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
M-2
