EXHIBIT 99.1
EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller and Master Servicer
and
THE BANK OF NEW YORK,
Trustee
and
BNY WESTERN TRUST COMPANY,
Co-Trustee
______________________________________
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2001
______________________________________
ASSET-BACKED CERTIFICATES, SERIES 2001-BC3
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Table of Contents
Page
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ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms.............................................................................I-2
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.............................................................II-1
Section 2.02. Acceptance by Trustee of the Mortgage Loans..............................................II-7
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Seller.........II-13
Section 2.04. Representations and Warranties of the Depositor.........................................II-25
Section 2.05. Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases.........II-27
Section 2.06. Authentication and Delivery of Certificates.............................................II-28
Section 2.07. Covenants of the Master Servicer........................................................II-28
Section 2.08. Seller Loss Coverage Obligation.........................................................II-28
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans...............................................III-1
Section 3.02. Subservicing; Enforcement of the Obligations of Master Servicer.........................III-2
Section 3.03. Rights of the Depositor, the Trustee in Respect of the Master Servicer. ................III-3
Section 3.04. Trustee to Act as Master Servicer.......................................................III-3
Section 3.05. Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
Pre-Funding Account; Capitalized Interest Account.......................................III-3
Section 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts.....................III-8
Section 3.07. Access to Certain Documentation and Information Regarding the Mortgage Loans............III-8
Section 3.08. Permitted Withdrawals from the Certificate Account,
Distribution Account and the Carryover Reserve Fund.....................................III-8
Section 3.09. [Reserved.]............................................................................III-11
Section 3.10. Maintenance of Hazard Insurance........................................................III-11
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements..............................III-11
i
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage Loans..................................III-13
Section 3.13. Co-Trustee to Cooperate; Release of Mortgage Files.....................................III-16
Section 3.14. Documents, Records and Funds in Possession of Master Servicer to be Held for
the Trustee............................................................................III-17
Section 3.15. Servicing Compensation.................................................................III-17
Section 3.16. Access to Certain Documentation........................................................III-18
Section 3.17. Annual Statement as to Compliance......................................................III-18
Section 3.18. Annual Independent Public Accountants' Servicing Statement; Financial Statements.......III-18
Section 3.19. The Cap Contract.......................................................................III-19
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.................................................................................IV-1
Section 4.02. Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls....IV-1
Section 4.03. [Reserved]...............................................................................IV-2
Section 4.04. Distributions............................................................................IV-2
Section 4.05. Monthly Statements to Certificateholders.................................................IV-5
Section 4.06. [Reserved]...............................................................................IV-8
Section 4.07. [Reserved]...............................................................................IV-8
Section 4.08. Carryover Reserve Fund...................................................................IV-8
ARTICLE V.
THE CERTIFICATES
Section 5.01. The Certificates..........................................................................V-1
Section 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates...............V-2
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.........................................V-5
Section 5.04. Persons Deemed Owners.....................................................................V-5
Section 5.05. Access to List of Certificateholders' Names and Addresses.................................V-5
Section 5.06. Book-Entry Certificates...................................................................V-6
Section 5.07. Notices to Depository.....................................................................V-7
Section 5.08. Definitive Certificates...................................................................V-7
Section 5.09. Maintenance of Office or Agency...........................................................V-7
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01. Respective Liabilities of the Depositor, the Master Servicer and the Seller..............VI-1
Section 6.02. Merger or Consolidation of the Depositor, the Master Servicer or the Seller..............VI-1
Section 6.03. Limitation on Liability of the Depositor, the Seller, the Master Servicer and Others.....VI-1
Section 6.04. Limitation on Resignation of Master Servicer.............................................VI-2
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds...........................................VI-2
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. Events of Default.......................................................................VII-1
Section 7.02. Trustee to Act; Appointment of Successor................................................VII-2
Section 7.03. Notification to Certificateholders......................................................VII-4
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01. Duties of Trustee......................................................................VIII-1
Section 8.02. Certain Matters Affecting the Trustee..................................................VIII-2
Section 8.03. Trustee Not Liable for Mortgage Loans..................................................VIII-3
Section 8.04. Trustee May Own Certificates...........................................................VIII-3
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses.....................................VIII-3
Section 8.06. Eligibility Requirements for Trustee...................................................VIII-4
Section 8.07. Resignation and Removal of Trustee.....................................................VIII-4
Section 8.08. Successor Trustee......................................................................VIII-5
Section 8.09. Merger or Consolidation of Trustee.....................................................VIII-6
Section 8.10. Appointment of Co-Trustee or Separate Trustee..........................................VIII-6
Section 8.11. Tax Matters............................................................................VIII-7
Section 8.12. Co-Trustee............................................................................VIII-10
ARTICLE IX.
TERMINATION
Section 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans.........................IX-1
Section 9.02. Final Distribution on the Certificates...................................................IX-1
Section 9.03. Additional Termination Requirements....................................................IX-3
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ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.................................................................................X-1
Section 10.02. Recordation of Agreement; Counterparts....................................................X-2
Section 10.03. Governing Law.............................................................................X-2
Section 10.04. Intention of Parties......................................................................X-3
Section 10.05. Notices...................................................................................X-3
Section 10.06. Severability of Provisions................................................................X-4
Section 10.07. Assignment................................................................................X-5
Section 10.08. Limitation on Rights of Certificateholders................................................X-5
Section 10.09. Inspection and Audit Rights...............................................................X-6
Section 10.10. Certificates Nonassessable and Fully Paid.................................................X-6
EXHIBITS
Exhibit A Photocopies of the Certificates, as Delivered at Closing
Exhibit B [Reserved]
Exhibit C [Reserved]
Exhibit D Photocopy of the Class A-R Certificate, as Delivered at Closing
Exhibit E Photocopy of the Tax Matters Person Certificate, as Delivered at Closing
Exhibit F Mortgage Loan Schedules, as Delivered to the Trustee at Closing
Exhibit G Forms of Certification of Trustee
Exhibit H Form of Final Certification of Trustee
Exhibit I Transfer Affidavit
Exhibit J Form of Transferor Certificate for Class A-R Certificates
Exhibit K [Reserved]
Exhibit L [Reserved]
Exhibit M Request for Release (for Co-Trustee)
Exhibit N Request for Release [Mortgage Loans Paid in Full, Repurchased or Replaced]
Exhibit O Photocopy of the Depository Agreement, as Delivered
Exhibit P Form of Mortgage Note and Mortgage
Exhibit Q Form of Subsequent Transfer Agreement
Exhibit R Form of Confirmation and Schedule Between Bear Xxxxxxx Financial Products
Inc. and Countrywide Home Loans, Inc.
Exhibit S Form of Cap Contract Assignment Agreement
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POOLING AND SERVICING AGREEMENT, dated as of August 1, 2001,
by and among CWABS, INC., a Delaware corporation, as depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York corporation (in its
capacity as seller hereunder, the "Seller", and in its capacity as master
servicer hereunder, the "Master Servicer"), The Bank of New York, a New York
banking corporation, as trustee (the "Trustee"), and BNY WESTERN TRUST
COMPANY, a California banking corporation, as Co-Trustee (the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates.
The Subsidiary REMIC will be evidenced by the LT-A, Class
LT-M-1, Class LT-M-2, Class LT-B-1 and Class LT-B-2 Interests (the "Subsidiary
REMIC Interests"), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in the Subsidiary REMIC. The
Class A-R-1 Interest is hereby designated as the sole class of residual
interest in the Subsidiary REMIC. The Class A-R-2 Interest is hereby
designated as the sole class of residual interest in the Master REMIC. The
Class A-R Certificates will represent the beneficial ownership of each of the
Class A-R-1 and Class A-R-2 Interests.
The Subsidiary REMIC Interests will have the following
designations, initial principal balances, pass-through rates, and
Corresponding Classes of Master REMIC Certificates ("Corresponding Classes"):
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Pass- Corresponding
Subsidiary REMIC Initial Through Allocation of Allocation of Class in
Interests Balance Rate Interest Principal Master REMIC
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LT-A Corresponding Master REMIC Net Rate Cap A, A-IO A A
Class balance
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LT-M-1 Corresponding Master REMIC Net Rate Cap X-0, X-XX X-0 M-1
Class balance
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LT-M-2 Corresponding Master REMIC Net Rate Cap X-0, X-XX X-0 M-2
Class balance
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LT-B-1 Corresponding Master REMIC Net Rate Cap X-0, X-XX X-0 X-0
Class balance
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LT-B-2 Corresponding Master REMIC Net Rate Cap X-0, X-XX X-0 X-0
Class balance
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On each Distribution Date, after all distributions of
principal have been made and all Realized Losses have been allocated on such
Distribution Date (i) the principal balances of
each of the Subsidiary REMIC Interests is equal to the principal balance of
their Corresponding Class of Master REMIC Certificates.
The following Master REMIC Interests, each of which is
hereby designated a regular interest in the Master REMIC, will have the
following designations, initial principal balances, pass-through rates:
Original Certificate
Class Principal Balance(1) Pass-Through Rate
--------------------------- ------------------------------ ------------------
A $ 370,000,000 (2)
A-IO $ 4,000,000,100(3) (4)
M-1 $ 10,000,000 (2)
M-2 $ 8,000,000 (2)
B-1 $ 4,000,000 (2)
B-2 $ 8,000,000 (2)
(1) This amount is subject to a permitted variance in the aggregate of
plus or minus 10%.
(2) The Certificates (other than the Class A-IO Certficates) will accrue
interest at the related Pass-Through Rates identified in this
Agreement.
(3) Notional amount. No principal will be paid on the Class A-IO
Certificates.
(4) The Class A-IO Certificates will accrue interest at the Class A-IO
Pass-Through Rate.
The Class A-R-2 Interest is hereby designated as the sole class of
residual interest in the Master REMIC. The Class A-R Certificates will
represent beneficial ownership of both the Class A-R-1 Interest and the Class
A-R-2 Interest.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Seller, the Trustee and the Co-Trustee
agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms.
In addition to those defined terms defined in Section 1.02,
whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
2/28 Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage
Rate becomes subject to adjustment.
3/27 Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage
Rate becomes subject to adjustment.
Accrual Period: With respect to the Certificates (other than
the Class A-IO Certificates) and any Distribution Date, the period commencing
on the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately
preceding such Distribution Date. With respect to the Class A-IO Certificates
and any Distribution Date, the calendar month immediately preceding such
Distribution Date. All calculations of interest on the Certificates (other
than the Class A-IO Certificates) will be made on the basis of the actual
number of days elapsed in the related Accrual Period and on a 360 day year.
All calculations of interest on the Class A-IO Certificates will be made on
the basis of a 360-day year consisting of twelve 30-day months.
Actuarial Mortgage Loan: Any Mortgage Loan other than a
Simple Interest Mortgage Loan.
Adjustable Rate Mortgage Loans: The Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate which is
adjustable for the life of the related Mortgage, including any Mortgage Loans
delivered in replacement thereof.
Adjusted Maximum Mortgage Rate: With respect to each
Adjustable Rate Mortgage Loan, the Maximum Mortgage Rate less the Expense Fee
Rate. With respect to each Fixed Rate Mortgage Loan, the Adjusted Net Mortgage
Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to each Adjustable Rate Mortgage Loan,
each date on which the related Mortgage Rate is subject to adjustment, as
provided in the related Mortgage Note.
Advance: The aggregate of the advances required to be made
by the Master Servicer with respect to any Distribution Date pursuant to
Section 4.01, the amount of any such advances being equal to the sum of (A)
the aggregate of payments of principal and interest on the Actuarial Mortgage
Loans and payments of interest on the Simple Interest Mortgage Loans (in each
case, net of the Servicing Fees) on the Mortgage Loans that were due on the
related Due Date and not received as of the close of business on the related
Determination Date and (B) with respect to each REO Property that has not been
liquidated, an amount equal to the excess, if any, of (x) one month's interest
(adjusted to the Net Mortgage Rate) on the Stated Principal Balance of the
related Mortgage Loan over (y) the net monthly rental income (if any) from
such REO Property deposited in the Certificate Account for such Distribution
Date pursuant to Section 3.12, less the aggregate amount of any such
delinquent payments that the Master Servicer has determined would constitute a
Nonrecoverable Advance were an advance to be made with respect thereto.
Notwithstanding the foregoing, all references to scheduled interest or
interest due on a related Due Date with respect to a Simple Interest Mortgage
Loan will mean an amount equal to the excess of (i) 30 days' interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Simple
Interest Mortgage Loan as of the last day of the related
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Due Period over (ii) the portion of any monthly payment received from the
borrower during the related Due Period which was allocable to interest.
Agreement: This Pooling and Servicing Agreement and any and
all amendments or supplements hereto made in accordance with the terms herein.
Amended Confirmation And Agreement: The Amended Confirmation
and Agreement dated August 30, 2001 evidencing a transaction between the Cap
Contract Counterparty and the Seller.
Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage
Loans due after the related Due Date and (ii) Principal Prepayments and
Liquidation Proceeds received in respect of such Mortgage Loans after the last
day of the related Prepayment Period or Due Period, respectively.
Applied Realized Loss Amount: With respect to any
Distribution Date on or after the date on which the Seller Loss Coverage
Amount has been reduced to zero, the sum of the Realized Losses with respect
to the Mortgage Loans which are to be applied in reduction of the Certificate
Principal Balance of the Subordinate Certificates pursuant to this Agreement,
which shall equal the amount, if any, by which, Certificate Principal Balance
of all Certificates (after all distributions of principal on such Distribution
Date) exceeds the Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The appraised value of the Mortgaged
Property based upon the appraisal made for the Seller by a fee appraiser at
the time of the origination of the related Mortgage Loan, or the sales price
of the Mortgaged Property at the time of such origination, whichever is less,
or with respect to any Mortgage Loan originated in connection with a
refinancing, the appraised value of the Mortgaged Property based upon the
appraisal made at the time of such refinancing.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the City of New York, New York
or the city in which the Corporate Trust Office of the Trustee is located are
authorized or obligated by law or executive order to be closed.
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Cap Contract: Collectively, the transaction evidenced by the
Amended Confirmation And Agreement (as assigned to the Trustee pursuant to the
Cap Contract Assignment Agreement), a form of which is attached hereto as
Exhibit R.
Cap Contract Assignment Agreement: The Assignment Agreement
dated as of the Closing Date among the Seller, the Trustee and the Cap
Contract Counterparty, the form of which is attached hereto as Exhibit S.
Cap Contract Counterparty: Bear Xxxxxxx Financial Products
Inc.
Cap Contract Termination Date: The Distribution Date in
August 2004.
Capitalized Interest Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 3.05 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York, in trust for registered holders of CWABS, Inc. Asset-Backed
Certificates, Series 2001-BC3." Funds in the Capitalized Interest Account
shall be held in trust for the Certificateholders for the uses and purposes in
this Agreement and shall not be a part of any REMIC created under this
Agreement. Any investment income earned from Permitted Investments made with
funds in the Capitalized Interest Account will be for the account of the
Seller.
Capitalized Interest Mortgage Rate: As to each Mortgage
Loan, the Net Mortgage Rate minus the MGIC Premium Rate.
Capitalized Interest Requirement: For the Distribution Date
in September 2001, October 2001 and November 2001, the sum of (1) the product
of:
(a) the excess of the aggregate Stated Principal Balance of
the Mortgage Loans plus the Pre-Funded Amount at the beginning of the related
Due Period over the aggregate Stated Principal Balance of the Mortgage Loans
and the Subsequent Mortgage Loans that have a payment due in the related Due
Period, and
(b) a fraction, the numerator of which is the weighted
average Capitalized Interest Mortgage Rate of the Mortgage Loans as of the
first day of the calendar month preceding the month of such Distribution Date
and the denominator of which is 12, and
(2) the product of:
(a) the aggregate Stated Principal Balance of the Delay
Delivery Mortgage Loans, and
(b) a fraction, the numerator of which is the weighted
average Net Mortgage Rate of the Delay Delivery Mortgage Loans as of the first
day of the calendar month preceding the month of such Distribution Date and
the denominator of which is 12.
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Carryover Reserve Fund: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section 4.08 in
the name of the Trustee for the benefit of the Certificateholders and
designated "The Bank of New York in trust for registered holders of CWABS,
Inc., Asset-Backed Certificates, Series 2001-BC3". Funds in the Carryover
Reserve Fund shall be held in trust for the Certificateholders for the uses
and purposes set forth in this Agreement.
Certificate: Any one of the certificates of any Class
executed and authenticated by the Trustee in substantially the forms attached
hereto as Exhibits A-1 through A-6, Exhibit D and Exhibit E.
Certificate Account: The separate Eligible Account created
and initially maintained by the Master Servicer pursuant to Section 3.05(b)
with a depository institution in the name of the Master Servicer for the
benefit of the Trustee on behalf of the Certificateholders and designated
"Countrywide Home Loans, Inc. in trust for registered holders of CWABS, Inc.,
Asset-Backed Certificates, Series 2001-BC3". Funds in the Certificate Account
shall be held in trust for the Certificateholders for the uses and purposes
set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate,
the person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other
than any Class A-IO Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate less the sum of (i) all
amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant
to Section 4.04, and (ii) with respect to any Subordinate Certificates, any
Applied Realized Loss Amounts allocated to such Certificate on previous
Distribution Dates pursuant to Section 4.04. References herein to the
Certificate Principal Balance of a Class of Certificates shall mean the
Certificate Principal Balances of all Certificates in such Class. The Class
A-IO Certificates shall have no Certificate Principal Balance, and any
reference to the Certificate Principal Balance of the Certificates shall not
include the Class A-IO Notional Amount.
Certificate Register: The register maintained pursuant to
Section 5.02 hereof.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register (initially, Cede & Co.,
as nominee for the Depository, in the case of any Class of Regular
Certificates, except that solely for the purpose of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any affiliate of the Depositor shall be deemed not to be
Outstanding and the Voting Interest evidenced thereby shall not be taken into
account in determining whether the requisite amount of Voting Interests
necessary to effect such consent has been obtained; provided that if any such
Person (including the Depositor) owns 100% of the Voting Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof (other than the second
sentence of Section 10.01 hereof) that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder.
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The Trustee is entitled to rely conclusively on a certification of
the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same Class designation
as set forth in Section 5.01 hereof.
Class A Certificate: Any Certificate designated as a "Class
A Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class A Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A Certificates.
Class A Current Interest: For any Distribution Date, the
interest accrued on the Class A Certificate Principal Balance during the
related Accrual Period at the Class A Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class A Interest Carry Forward Amount: For any Distribution
Date, the excess of (a) the Class A Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A
Certificates with respect to interest on such prior Distribution Dates.
Class A Interest Carryover Amount: For any Distribution Date
on which the Pass-Through Rate for the Class A Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the
Class A Certificates would otherwise be entitled to receive on such
Distribution Date had such rate been calculated as the sum of One-Month LIBOR
and the applicable Class A Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, over (ii) the amount of interest payable on the
Class A Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class A Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at
the Class A Pass-Through Rate (without giving effect to the Net Rate Cap up to
the Weighted Maximum Rate Cap).
Class A Margin: For any Distribution Date on or prior to the
Optional Termination Date, 0.240% per annum and, for any Distribution Date
after the Optional Termination Date, 0.480% per annum.
Class A Pass-Through Rate: For the first Distribution Date,
3.820% per annum. For any Distribution Date thereafter, the lesser of (i)
One-Month LIBOR plus the Class A Margin, and (ii) the Net Rate Cap for such
Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (A) the Certificate Principal Balance of the
Class A Certificates immediately prior to
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such Distribution Date over (B) 85.0% of the Stated Principal Balances of the
Mortgage Loans for such Distribution Date.
Class A-IO Cashflow Carryover Deposit Amount: As defined in
Section 4.04(a).
Class A-IO Certificates: Any Certificate designated as a
"Class A-IO Certificate" on the face thereof, in the form of Exhibit A-2
hereto.
Class A-IO Current Interest: For any Distribution Date, the
interest accrued on the Class A-IO Notional Amount during the related Accrual
Period at the Class A-IO Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Class A-IO Interest Carry Forward Amount: For any
Distribution Date, the excess of (a) the Class A-IO Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed
to the Class A-IO Certificates with respect to interest on such prior
Distribution Dates.
Class A-IO Notional Amount: An amount equal to the principal
balance of the Mortgage Loans in the Trust Fund, plus the amount of the
Pre-Funded Amount on deposit in the Pre-Funding Account (if any).
Class A-IO Pass-Through Rate: With respect to any
Distribution Date, the excess of (i) the weighted average Adjusted Net
Mortgage Rate of the Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof) over (ii) the weighted average Pass-Through Rate
of the Class A, Class M-1, Class M-2,Class B-1 and Class B-2 Certificates
(weighted on the basis of the respective Certificate Principal Balances
thereof and adjusted in each case to an effective rate reflecting the
calculation of interest on the basis of a 360-day year that consists of twelve
30-day months). Solely for federal income tax purposes, the Class A-IO Pass
Through Rate will be calculated by substituting for clause (ii) in the
preceding sentence, the weighted average of the pass through rates of REMIC 1
XX-X, XX-X-0, XX-X-0, XX-X-0 and LT-B-2 with the pass through rate in respect
of each such Interest subject to a cap equal to the Pass Through Rate in
respect of its Corresponding Master REMIC Class, as provided in the
Preliminary Statement herein.
Class A-R Certificate: Any one of the Class A-R Certificates
executed and authenticated by the Trustee in substantially the form set forth
in Exhibits D and E hereto.
Class A-R Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-R
Certificates.
Class A-R Principal Distribution Amount: With respect to any
Distribution Date, the excess, if any, of (A) $100 over (B) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04.
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Class B-1 Certificate: Any Certificate designated as a
"Class B-1 Certificate" on the face thereof, in the form of Exhibit A-5
hereto, representing the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: For any Distribution Date, the
interest accrued on the Class B-1 Certificate Principal Balance during the
related Accrual Period at the Class B-1 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class B-1 Interest Carry Forward Amount: For any
Distribution Date, the excess of (a) the Class B-1 Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed
to the Class B-1 Certificates with respect to interest on such prior
Distribution Dates.
Class B-1 Interest Carryover Amount: For any Distribution
Date on which the Pass-Through Rate for the Class B-1 Certificates is based
upon the Net Rate Cap, the sum of (A) the excess of (i) the amount of interest
the Class B-1 Certificates would otherwise be entitled to receive on such
Distribution Date had such rate been calculated as the sum of One-Month LIBOR
and the applicable Class B-1 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, over (ii) the amount of interest payable on the
Class B-1 Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class B-1 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon
at the Class B-1 Pass-Through Rate (without giving effect to the Net Rate Cap
up to the Weighted Maximum Rate Cap).
Class B-1 Margin: For any Distribution Date on or prior to
the Optional Termination Date, 1.250% per annum and, for any Distribution Date
after the Optional Termination Date, 1.875% per annum.
Class B-1 Pass-Through Rate: For the first Distribution
Date, 4.830% per annum. For any Distribution Date thereafter, the lesser of
(i) One-Month LIBOR plus the Class B-1 Margin, and (ii) the Net Rate Cap for
such Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), and (D) the Class B-1 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) 96.0% of the aggregate
Stated Principal Balances for such Distribution Date of the Mortgage Loans.
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Class B-2 Certificate: Any Certificate designated as a
"Class B-2 Certificate" on the face thereof, in the form of Exhibit A-6
hereto, representing the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Current Interest: For any Distribution Date, the
interest accrued on the Class B-2 Certificate Principal Balance during the
related Accrual Period at the Class B-2 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class B-2 Interest Carry Forward Amount: For any
Distribution Date, the excess of (a) the Class B-2 Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed
to the Class B-2 Certificates with respect to interest on such prior
Distribution Dates.
Class B-2 Interest Carryover Amount: For any Distribution
Date on which the Pass-Through Rate for the Class B-2 Certificates is based
upon the Net Rate Cap, the sum of (A) the excess of (i) the amount of interest
the Class B-2 Certificates would otherwise be entitled to receive on such
Distribution Date had such rate been calculated as the sum of One-Month LIBOR
and the applicable Class B-2 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, over (ii) the amount of interest payable on the
Class B-2 Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class B-2 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon
at the Class B-2 Pass-Through Rate (without giving effect to the Net Rate Cap
up to the Weighted Maximum Rate Cap).
Class B-2 Margin: For any Distribution Date on or prior to
the Optional Termination Date, 2.000% per annum and, for any Distribution Date
after the Optional Termination Date, 3.000% per annum.
Class B-2 Pass-Through Rate: For the first Distribution
Date, 5.580% per annum. For any Distribution Date thereafter, the lesser of
(i) One-Month LIBOR plus the Class B-2 Margin, and (ii) the Net Rate Cap for
such Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class B-1 Certificate Principal Balance (after
taking into account distribution of the Class B-1 Principal Distribution
Amount on such Distribution Date) and (E) the Class B-2 Certificate Principal
Balance immediately prior to such
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Distribution Date over (ii) the Stated Principal Balances for such Distribution
Date of the Mortgage Loans, provided, however, that after the Class A
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have been reduced to zero, the Class B-2 Principal Distribution Amount
for such Distribution Date will equal 100% of the Principal Distribution Amount
for such Distribution Date.
Class M-1 Certificate: Any Certificate designated as a
"Class M-1 Certificate" on the face thereof, in the form of Exhibit A-3
hereto, representing the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-1
Certificates.
Class M-1 Current Interest: For any Distribution Date, the
interest accrued on the Class M-1 Certificate Principal Balance during the
related Accrual Period at the Class M-1 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class M-1 Interest Carry Forward Amount: For any
Distribution Date, the excess of (a) the Class M-1 Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed
to the Class M-1 Certificates with respect to interest.
Class M-1 Interest Carryover Amount: For any Distribution
Date on which the Pass-Through Rate for the Class M-1 Certificates is based
upon the Net Rate Cap, the sum of (A) the excess of (i) the amount of interest
the Class M-1 Certificates would otherwise be entitled to receive on such
Distribution Date had such rate been calculated as the sum of One-Month LIBOR
and the applicable Class M-1 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, over (ii) the amount of interest payable on the
Class M-1 Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class M-1 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon
at the Class M-1 Pass-Through Rate (without giving effect to the Net Rate Cap
up to the Weighted Maximum Rate Cap).
Class M-1 Margin: For any Distribution Date on or prior to
the Optional Termination Date, 0.550% per annum and, for any Distribution Date
after the Optional Termination Date, 0.825% per annum.
Class M-1 Pass-Through Rate: For the first Distribution
Date, 4.130% per annum. For any Distribution Date thereafter, the lesser of
(i) One-Month LIBOR plus the Class M-1 Margin, and (ii) the Net Rate Cap for
such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date) and
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(B) the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) 90.00% of the Stated Principal Balances for such
Distribution Date of the Mortgage Loans.
Class M-2 Certificate: Any Certificate designated as a
"Class M-2 Certificate" on the face thereof, in the form of Exhibit A-4
hereto, representing the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-2
Certificates.
Class M-2 Current Interest: For any Distribution Date, the
interest accrued on the Class M-2 Certificate Principal Balance during the
related Accrual Period at the Class M-2 Pass-Through Rate plus any amount
previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
Class M-2 Interest Carry Forward Amount: For any
Distribution Date, the excess of (a) the Class M-2 Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed
to the Class M-2 Certificates with respect to interest on such prior
Distribution Dates.
Class M-2 Interest Carryover Amount: For any Distribution
Date on which the Pass-Through Rate for the Class M-2 Certificates is based
upon the Net Rate Cap, the sum of (A) the excess of (i) the amount of interest
the Class M-2 Certificates would otherwise be entitled to receive on such
Distribution Date had such rate been calculated as the sum of One-Month LIBOR
and the applicable Class M-2 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, over (ii) the amount of interest payable on the
Class M-2 Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class M-2 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon
at the Class M-2 Pass-Through Rate (without giving effect to the Net Rate Cap
up to the Weighted Maximum Rate Cap).
Class M-2 Margin: For any Distribution Date on or prior to
the Optional Termination Date, 0.950% per annum and, for any Distribution Date
after the Optional Termination Date, 1.425% per annum.
Class M-2 Pass-Through Rate: For the first Distribution
Date, 4.530% per annum. For any Distribution Date thereafter, the lesser of
(i) One-Month LIBOR plus the Class M-2 Margin, (ii) the Net Rate Cap for such
Distribution Date, and (iii) the Maximum Rate for such Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2
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Certificate Principal Balance immediately prior to such Distribution
Date over (ii) 91.00% of the aggregate Stated Principal Balances for such
Distribution Date of the Mortgage Loans.
Closing Date: August 30, 2001.
Co-Trustee: BNY Western Trust Company, a California banking
corporation, not in its individual capacity, but solely in its capacity as
co-trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Compensating Interest: With respect to any Mortgage Loan, an
amount equal to one-half of the Servicing Fee, to be applied to the interest
portion of a Prepayment Interest Shortfall on such Mortgage Loan pursuant to
Section 4.02 hereof.
Corporate Trust Office: The designated office of the Trustee
in the State of New York where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 000 Xxxxxxx Xxxxxx,
00X, Xxx Xxxx, Xxx Xxxx 00000 (Attention: Corporate Trust MBS Administration),
telephone: (000) 000-0000, facsimile: (000) 000-0000.
Corresponding Certificate: With respect to each REMIC 4
Regular Interest, the Certificate that evidences ownership of that REMIC 4
Regular Interest.
Covered Mortgage Loan: A mortgage loan listed on the
Mortgage Loan Schedule as being covered by the MGIC Policy.
Current Interest: With respect to (i) the Class A
Certificates, the Class A Current Interest, (ii) the Class A-IO Certificates,
the Class A-IO Current Interest, (iii) the Class A-R Certificates, the Class
A-R Current Interest, (iv) the Class M-1 Certificates, the Class M-1 Current
Interest, (v) the Class M-2 Certificates, the Class M-2 Current Interest (vi)
the Class B-1 Certificates, the Class B-1 Current Interest and (vii) the Class
B-2 Certificates, the Class B-2 Current Interest.
Cut-off Date: In the case of any Initial Mortgage Loan, the
later of (x) August 1, 2001 and (y) the date of origination of such Mortgage
Loan (the "Initial Cut-off Date"), and in the case of any Subsequent Mortgage
Loan, the later of (x) the first day of the month of the related Subsequent
Transfer Date and (y) the date of origination of such Subsequent Mortgage Loan
(the related "Subsequent Cut-off Date"). When used with respect to any
Mortgage Loans "the Cut-off Date" shall mean the related Cut-off Date.
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Cut-off Date Principal Balance: As to any Actuarial Mortgage
Loan, the unpaid principal balance thereof as of the close of business on the
Cut-off Date after application of all payments of principal due on or prior to
the Cut-off Date, whether or not received, and all Principal Prepayments
received on or prior to the Cut-off Date, but without giving effect to any
installments of principal received in respect of Due Dates after the Cut-off
Date. As to any Simple Interest Mortgage Loan, the unpaid principal balance
thereof as of the close of business on the Cut-off Date after application of
all payments of principal made on or prior to the Cut-off Date and all
Principal Prepayments received on or prior to the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.
Definitive Certificates: As defined in Section 5.06.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under such Mortgage Loan,
or any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage
Loans identified on the schedule of Mortgage Loans hereto set forth on Exhibit
F-2 hereof for which all or a portion of a related Mortgage File is not
delivered to the Co-Trustee on or prior to the Closing Date, and (ii) all
Subsequent Mortgage Loans. The Depositor shall deliver (or cause delivery of)
the Mortgage Files to the Co-Trustee: (A) with respect to at least 50% of the
Initial Mortgage Loans, not later than the Closing Date, (B) with respect to
at least an additional 40% of the Initial Mortgage Loans, not later than 21
days after the Closing Date, and not later than twenty one days after the
relevant Subsequent Transfer Date with respect to at least 90% of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, and (C) ,
with respect to the remaining 10% of the Mortgage Loans, not later than thirty
days after the Closing Date, and not later than thirty days after the relevant
Subsequent Transfer Date with respect to the remaining 10% of the Subsequent
Mortgage Loans conveyed on the related Subsequent Transfer Date. To the extent
that Countrywide Home Loans, Inc. shall be in possession of any Mortgage Files
with respect to any Delay Delivery Loan, until delivery to of such Mortgage
File to the Co-Trustee as provided in Section 2.01, Countrywide Home Loans,
Inc. shall hold such files as Master Servicer hereunder, as agent and in trust
for the Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
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Delinquent: A Mortgage Loan is "delinquent" if any payment
due thereon is not made pursuant to the terms of such Mortgage Loan by the
close of business on the day such payment is scheduled to be due. A Mortgage
Loan is "30 days delinquent" if such payment has not been received by the
close of business on the corresponding day of the month immediately succeeding
the month in which such payment was due, or, if there is no such corresponding
day (e.g., as when a 30-day month follows a 31-day month in which a payment
was due on the 31st day of such month), then on the last day of such
immediately succeeding month. Similarly for "60 days delinquent," "90 days
delinquent" and so on.
Denomination: With respect to each Certificate, the amount
set forth on the face thereof as the "Initial Principal Balance of this
Certificate".
Depositor: CWABS, Inc., a Delaware corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company ("DTC"), the nominee of which is Cede & Co., or any other
organization registered as a "clearing agency" pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. The Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Class of
Book-Entry Certificates, the agreement among the Depositor, the Trustee and
the initial Depository, dated as of the Closing Date, substantially in the
form of Exhibit O.
Depository Participant: A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date,
the 15th day of the month of such Distribution Date or, if such 15th day is
not a Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.05 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2001-BC3". Funds in the Distribution Account shall be
held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Distribution Account Deposit Date: As to any Distribution
Date, 1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
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Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such 25th day is not a
Business Day, the next succeeding Business Day, commencing in September 2001.
Due Date: With respect to any Mortgage Loan, the day of the
month on which a Monthly Payment is due.
Due Period: With respect to any Distribution Date, the
period beginning on the second day of the calendar month preceding the
calendar month in which such Distribution Date occurs and ending on the first
day of the month in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company, the long-term unsecured debt obligations and short-term unsecured
debt obligations of which (or, in the case of a depository institution or
trust company that is the principal subsidiary of a holding company, the debt
obligations of such holding company, if Xxxxx'x is not a Rating Agency) are
rated by each Rating Agency in one of its two highest long-term and its
highest short-term rating categories respectively, at the time any amounts are
held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC
(to the limits established by the FDIC) and the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company having capital and surplus
of not less than $50,000,000, acting in its fiduciary capacity or (iv) any
other account acceptable to the Rating Agencies. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(c)
hereof.
Enhancement Payment: With respect to any Distribution Date
on or prior to the Distribution Date on which the Seller Loss Coverage Amount
is reduced to zero, the amount of Realized Losses with respect to Mortgage
Loans, provided, however, that with respect to the Distribution Date on which
the amount of Realized Losses are greater than the Seller Loss Coverage
Amount, the Enhancement Payment for such Distribution Date shall be the Seller
Loss Coverage Amount.
ERISA: The Employee Retirement Income Security Act of 1974,
as amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment underwriting or private placement that meets the applicable
requirements of the Underwriter's Exemption.
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ERISA-Restricted Certificates: Until they have been the
subject of an ERISA-Qualifying Underwriting, the Class A-IO Certificates and
Class A-R Certificates; and any class of Certificates that does not satisfy
the applicable rating requirement under the Underwriter's Exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation Proceeds that are in excess of the sum of (i) the unpaid principal
balance of such Liquidated Loan as of the date of such liquidation plus (ii)
interest at the Mortgage Rate from the Due Date as to which interest was last
paid or advanced to Certificateholders (and not reimbursed to the Master
Servicer) up to the Due Date in the month in which such Liquidation Proceeds
are required to be distributed on the Stated Principal Balance of such
Liquidated Loan outstanding during each Due Period as to which such interest
was not paid or advanced.
Expense Fee Rate: The sum of (i) the Servicing Fee Rate,
(ii) the Trustee Fee Rate and (iii) with respect to a Covered Mortgage Loan,
the MGIC Premium Rate.
Xxxxxx Xxx: The Federal National Mortgage Association, a
federally chartered and privately owned corporation organized and existing
under the Federal National Mortgage Association Charter Act, or any successor
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
Fixed Rate Mortgage Loans: The Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the
life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under
Title III of the Emergency Home Finance Act of 1970, as amended, or any
successor thereto.
Funding Period: The period from and after the Closing Date
to and including November 30, 2001.
Gross Margin: The percentage set forth in the related
Mortgage Note for the Adjustable Rate Mortgage Loans to be added to the Index
for use in determining the Mortgage Rate on each Adjustment Date, and which is
set forth in the Mortgage Loan Schedule for the Adjustable Rate Mortgage
Loans.
Index: As to any Adjustable Rate Mortgage Loan on any
Adjustment Date related thereto, the index for the adjustment of the Mortgage
Rate set forth as such in the related
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Mortgage Note, such index in general being the average of the London interbank
offered rates for six-month U.S. dollar deposits in the London market, as set
forth in The Wall Street Journal or some other source generally accepted in
the residential mortgage loan origination business and specified in the related
Mortgage Note, as most recently announced as of either 45 days prior to, or the
first business day of the month immediately preceding the month of, such
Adjustment Date or, if the Index ceases to be published in the original source
or becomes unavailable for any reason, then the Index shall be a new index
selected by the Master Servicer, based on comparable information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of such Mortgage
Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the Initial Mortgage
Loans due on or after the Initial Cut-off Date and received by the Master
Servicer before the Closing Date and not applied in computing the Cut-off Date
Principal Balance thereof, (ii) interest on the Initial Mortgage Loans due on
and after the Initial Cut-off Date and received by the Master Servicer before
the Closing Date and (iii) $100 in respect of the Class A-R Certificates.
Initial Certificate Principal Balance: With respect to any
Certificate, the Certificate Principal Balance of such Certificate or any
predecessor Certificate on the Closing Date.
Initial Cut-off Date: As defined in the definition of
Cut-off Date.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trust
Fund on the Closing Date pursuant to this Agreement as identified on the
Mortgage Loan Schedule delivered to the Trustee on the Closing Date.
Initial Mortgage Rate: As to each Mortgage Loan, the
Mortgage Rate in effect prior to the Initial Adjustment Date.
Initial Seller Loss Coverage Amount: 2.00% of the initial
aggregate Certificate Principal Balance of the Certificates.
Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including the MGIC Policy, and
including all riders and endorsements thereto in effect with respect to such
Mortgage Loan, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans pursuant to any Insurance Policy or any other insurance policy covering
a Mortgage Loan, to the extent such proceeds are payable to the mortgagee
under the Mortgage, the Master Servicer or the trustee under the deed of trust
and are not applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would
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follow in servicing mortgage loans held for its own account, in each case other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: With respect to (i) the Class
A-1 Certificates, the Class A-1 Interest Carry Forward Amount, (ii) the Class
A-R Certificates, the Class A-R Interest Carry Forward Amount, (iii) the Class
A-IO Certificates, the Class A-IO Interest Carry Forward Amount, (iv) the
Class M-1 Certificates, the Class M-1 Interest Carry Forward Amount, (v) the
Class M-2 Certificates, the Class M-2 Interest Carry Forward Amount, (vi) the
Class B-1 Certificates, the Class B-1 Interest Carry Forward Amount and (vii)
the Class B-2 Certificates, the Class B-2 Interest Carry Forward Amount.
Interest Determination Date: With respect to the
Certificates (other than the Class A-IO Certificates) for the first Accrual
Period, August 25, 2001. With respect to the (other than the Class A-IO
Certificates) and any Accrual Period thereafter, the second LIBOR Business Day
preceding the commencement of such Accrual Period.
Interest Funds: The Interest Remittance Amount plus any
amounts required to be withdrawn from the Capitalized Interest Account and any
amounts received under the Cap Contract, less the aggregate MGIC Premium and
Trustee Fee for the Mortgage Loans.
Interest Rate Cap Agreement: An interest rate cap contract
referred to in the last paragraph of Section 8.11 and all related provisions
of this Agreement.
Interest Remittance Amount: With respect to the Mortgage
Loans and any Master Servicer Advance Date, the sum, without duplication, of
(i) all scheduled interest collected during the related Due Period with
respect to the Mortgage Loans less the related Servicing Fee, (ii) all related
Advances relating to interest with respect to the Mortgage Loans, (iii) all
Compensating Interest with respect to the Mortgage Loans, and (iv) Liquidation
Proceeds with respect to the Mortgage Loans collected during the related Due
Period (to the extent such Liquidation Proceeds relate to interest), less all
Nonrecoverable Advances relating to interest reimbursed during the related Due
Period.
Latest Possible Maturity Date: The Distribution Date in
December 2031.
LIBOR Business Day: Any day on which banks in the City of
London, England and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified
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(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such
liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Advances, Servicing Fees and
Servicing Advances.
Loan Number and Borrower Identification Mortgage Loan
Schedule: With respect to any Subsequent Transfer Date, the Loan Number and
Borrower Identification Mortgage Loan Schedule delivered in connection with
such Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan Number
and Borrower Identification Mortgage Loan Schedule shall contain the
information specified in the definition of "Mortgage Loan Schedule" with
respect to the Subsequent Mortgage Loans conveyed on such Subsequent Transfer
Date, and each Loan Number and Borrower Identification Mortgage Loan Schedule
shall be deemed to be included in the Mortgage Loan Schedule.
Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the original principal balance of the
related Mortgage Loan and the denominator of which is the Appraised Value of
the related Mortgaged Property.
Master Servicer: Countrywide Home Loans, Inc., a New York
corporation, and its successors and assigns, in its capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date,
1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.
Maximum Rate: The weighted average of the Adjusted Maximum
Mortgage Rates on the Mortgage Loans weighted on the basis of the Stated
Principal Balance thereof and adjusted to an effective rate reflecting the
accrual of interest calculated on the basis of a 360-day year and the actual
number of days elapsed during the related interest accrual period.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS
on the MERS(R) System.
MERS(R) System: The system of recording transfers of
mortgages electronically maintained by MERS.
I-20
MGIC Policy: The mortgage insurance policy issued by
Mortgage Guarantee Insurance Corporation with respect to certain mortgage
loans identified in the Mortgage Loan Schedule.
MGIC Premium: The premium payable on the MGIC Policy on each
Distribution Date, plus the amount of any Kentucky or West Virginia state
taxes payable by the Co-Trustee as a result of the payment of such premium in
each case as provided by the MGIC Policy.
MGIC Premium Rate: With respect to a Covered Mortgage Loan,
the per annum rate equal to a quotient (expressed as a percentage), the
numerator of which is equal to the portion of the MGIC Premium attributable to
such Covered Mortgage Loan and the denominator of which is equal to the sum of
the Stated Principal Balance of such Covered Mortgage Loan.
MIN: The Mortgage Identification Number for any MERS
Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest, or creating a
second lien on or second priority ownership interest, as applicable, in an
estate in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Co-Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loan: Each of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof and any Subsequent
Transfer Agreement as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in
the Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition
of title of the related Mortgaged Property. Any Mortgage Loan subject to
repurchase by the Seller or Master Servicer as provided in this Agreement,
shall continue to be a Mortgage Loan hereunder until the Purchase Price with
respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the deletion of Deleted
Mortgage Loans and the addition of (x) Replacement Mortgage Loans pursuant to
the provisions of this Agreement any
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(y) Subsequent Mortgage Loans pursuant to the provisions of this Agreement and
any Subsequent Transfer Agreement) transferred to the Trustee as part of the
Trust Fund and from time to time subject to this Agreement, attached hereto as
Exhibit F-1, setting forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the Appraised Value;
(iii) the Initial Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off
Date;
(ix) the Loan-to-Value Ratio or Combined Loan-to-Value
Ratio, as applicable, at origination;
(x) a code indicating whether the residential dwelling at
the time of origination was represented to be owner-occupied;
(xi) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling (b) a
condominium unit or (c) a two- to four-unit residential
property;
(xii) [Reserved];
(xiii) a code indicating whether the Mortgage Loan is
covered by the MGIC Policy and the rate for the MGIC Premium,
if applicable;
(xiv) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
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(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan.
The Mortgage Loan Schedule shall be deemed to include for all purposes each
Loan Number and Borrower Identification Mortgage Loan Schedule delivered
pursuant to Section 2.01(f) and all the related Subsequent Mortgage Loans and
Subsequent Mortgage Loan information included therein.
Mortgage Note: The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
Mortgage Pool: The aggregate of the Mortgage Loans
identified in the Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a
Mortgage Note from time to time.
Mortgaged Property: The underlying property securing a
Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any
time, the per annum rate equal to the Mortgage Rate less the Servicing Fee
Rate.
Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate on the Mortgage Loans in the Trust Fund,
adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the Accrual Period and a
360-day year.
Net Rate Carryover: With respect to any Distribution Date,
an amount equal to the sum of (i) the Class A Interest Carryover Amount for
such Distribution Date (if any), (ii) the Class A-R Interest Carryover Amount
for such Distribution Date (if any), (iii) the Class M-1 Interest Carryover
Amount for such Distribution Date (if any), (iv) the Class M-2 Interest
Carryover Amount for such Distribution Date (if any), (v) the Class B-1
Interest Carryover Amount for such Distribution Date (if any) and (vi) the
Class B-2 Interest Carryover Amount for such Distribution Date (if any);
provided that when the term Net Rate Carryover is used with respect to one
Class of Certificates (other than the Class A-IO Certificates), it shall mean
such carryover amount listed in clauses (i), (ii), (iii), (iv) or (v) as
applicable, with the same Class designation. The Class A-IO Certificates shall
not accrue any Net Rate Carryover.
Non-Book-Entry Certificate: Any Certificate other than a
Book-Entry Certificate.
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Nonrecoverable Advance: Any portion of an Advance previously
made or proposed to be made by the Master Servicer that, in the good faith
judgment of the Master Servicer, will not or, in the case of a current
delinquency, would not, be ultimately recoverable by the Master Servicer from
the related Mortgagor, related Liquidation Proceeds or otherwise.
Officer's Certificate: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Vice
President (however denominated), an Assistant Vice President, the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries of
the Depositor or the Master Servicer (or any other officer customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with a
particular subject) or (ii), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor, the
Seller and the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the
rate determined by the Trustee on the related Interest Determination Date on
the basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that
One-Month LIBOR calculated for the first Accrual Period shall equal 3.580% per
annum. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying One-Month LIBOR or comparable rates as may
be reasonably selected by the Trustee), One-Month LIBOR for the applicable
Accrual Period will be the Reference Bank Rate. If no such quotations can be
obtained by the Trustee and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to
each addressee of such opinion; provided that with respect to Section 6.04 or
10.01, or the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Depositor and the Master
Servicer, (ii) not have any direct financial interest in the Depositor or the
Master Servicer or in any affiliate of either, and (iii) not be connected with
the Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the Trust Fund
provided hereunder pursuant to the purchase of the Mortgage Loans pursuant to
the last sentence of Section 9.01 hereof.
Optional Termination Date: Any Distribution Date on which
the Stated Principal Balance of the Mortgage Loans is equal to or less than
10% of the sum of the Stated Principal Balance of the Initial Mortgage Loans
as of the Initial Cut-off Date plus the Pre-Funded Amount.
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Original Mortgage Loan: The mortgage loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
Original Value: The value of the property underlying a
Mortgage Loan based, in the case of the purchase of the underlying Mortgaged
Property, on the lower of an appraisal satisfactory to the Master Servicer or
the sales price of such property or, in the case of a refinancing, on an
appraisal satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated
under this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by
the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not
the subject of a Principal Prepayment in full, and that did not become a
Liquidated Loan, prior to the end of the related Prepayment Period.
Ownership Interest: As to any Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
Pass-Through Rate: With respect to the Class A Certificates,
the Class A Pass-Through Rate; with respect to the Class A-IO Certificates,
the Class A-IO Pass-Through Rate; with respect to the Class A-R Certificates,
the Class A-R Pass-Through Rate; with respect to the Class M-1 Certificates,
the Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates,
the Class M-2 Pass-Through Rate; with respect to the Class B-1 Certificates,
the Class B-1 Pass-Through Rate; and with respect to the Class B-2
Certificates, the Class B-2 Pass-Through Rate.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest in the related Certificates evidenced
by such Class which shall be equal to the Certificate Principal
Balance of such Class divided by the Certificate Principal Balance
of all Certificates of such Class; and
I-25
(ii) any Certificate, the Percentage Interest evidenced
thereby of the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of such Class.
Periodic Rate Cap: As to substantially all Adjustable Rate
Mortgage Loans and the related Mortgage Notes, the provision therein that
limits permissible increases and decreases in the Mortgage Rate on any
Adjustment Date to not more than three percentage points.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency
thereof, provided such obligations are backed by the full faith and
credit of the United States;
(ii) general obligations of or obligations guaranteed by
any state of the United States or the District of Columbia receiving
the highest long-term debt rating of each Rating Agency, or such
lower rating as each Rating Agency has confirmed in writing will not
result in the downgrading or withdrawal of the ratings then assigned
to the Certificates by such Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as each Rating Agency has
confirmed in writing will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by such
Rating Agency;
(v) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding
company, but only if Xxxxx'x is not a Rating Agency) are then rated
one of the two highest long-term and the highest short-term ratings
of each such Rating Agency for such securities, or such lower
ratings as each Rating Agency has confirmed in writing will not
result in the downgrading or withdrawal of the rating then assigned
to the Certificates by such Rating Agency;
(vi) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (v) above;
I-26
(vii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment,
have one of the two highest long term ratings of each Rating Agency
(except if the Rating Agency is Moody's, such rating shall be the
highest commercial paper rating of S&P for any such securities) or
such lower rating as each Rating Agency has confirmed in writing
will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by such Rating Agency;
(viii) interests in any money market fund which at the
date of acquisition of the interests in such fund and throughout the
time such interests are held in such fund has the highest applicable
long term rating by each Rating Agency or such lower rating as each
Rating Agency has confirmed in writing will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by such Rating Agency;
(ix) short term investment funds sponsored by any trust
company or national banking association incorporated under the laws
of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in their respective
highest applicable rating category or such lower rating as each
Rating Agency has confirmed in writing will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by such Rating Agency; and
(x) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no
such instrument shall be a Permitted Investment (A) if such instrument
evidences principal and interest payments derived from obligations underlying
such instrument and the interest payments with respect to such instrument
provide a yield to maturity of greater than 120% of the yield to maturity at
par of such underlying obligations, or (B) if it may be redeemed at a price
below the purchase price (the foregoing clause (B) not to apply to investments
in units of money market funds pursuant to clause (vii) above); provided
further that no amount beneficially owned by any REMIC (including, without
limitation, any amounts collected by the Master Servicer but not yet deposited
in the Certificate Account) may be invested in investments (other than money
market funds) treated as equity interests for Federal income tax purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at the expense
of Master Servicer, to the effect that such investment will not adversely
affect the status of any such REMIC as a REMIC under the Code or result in
imposition of a tax on any such
I-27
REMIC. Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives
described in section 521 of the Code) that is exempt from tax imposed by
Chapter 1 of the Code (including the tax imposed by section 511 of the Code on
unrelated business taxable income) on any excess inclusions (as defined in
section 860E(c)(1) of the Code) with respect to any Class A-R Certificate,
(iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) an "electing large partnership" as defined in
Section 775 of the Code, (vi) a Person that is not a citizen or resident of
the United States, a corporation, partnership, or other entity (treated as a
corporation or a partnership for federal income tax purposes) created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, or an estate whose income from sources without the
United States is includible in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans which
were Outstanding Mortgage Loans on the Due Date in the month preceding the
month of such Distribution Date.
Pre-Funded Amount: The amount deposited in the Pre-Funding
Account on the Closing Date, which shall equal $63,913,692.00.
Pre-Funding Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.05 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered holders of
I-28
CWABS, Inc., Asset-Backed Certificates, Series 2001-BC3." Funds in the Pre-
Funding Account shall be held in trust for the Certificateholders for the uses
and purposes set forth in this Agreement and shall not be a part of any REMIC
created hereunder, provided, however that any investment income earned from
Permitted Investments made with funds in the Pre-Funding Account will be for
the account of the Depositor.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates (other
than the Class A-IO Certificates).
Prepayment Interest Excess: With respect to any Distribution
Date, for each Actuarial Mortgage Loan that was the subject of a Principal
Prepayment during the period from the second day through the fifteenth day of
the month of such Distribution Date, any payment of interest received in
connection therewith (net of any applicable Servicing Fee) representing
interest accrued for any portion of such month of receipt.
Prepayment Interest Shortfall: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a Principal Prepayment in full, or that became a
Liquidated Loan during (i) the Prepayment Period with respect to a Simple
Interest Mortgage Loan or (ii) the period from the sixteenth day of the month
preceding such Distribution Date, or in the case of the first Distribution
Date, from the Cut-off Date through and including the last day of the month
preceding such Distribution Date (in each case, other than a Principal
Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof), the amount, if any, by which
(i) one month's interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan immediately prior to such prepayment
(or liquidation) or in the case of a partial Principal Prepayment on the
amount of such prepayment (or liquidation proceeds) exceeds (ii) the amount of
interest paid or collected in connection with such Principal Prepayment or
such liquidation proceeds.
Prepayment Period: As to any Distribution Date, (i) with
respect to Actuarial Mortgage Loans, the period beginning with the opening of
business on the sixteenth day of the calendar month preceding the month in
which such Distribution Date occurs (or, with respect to the first
Distribution Date, the period from the Cut-off Date) and ending on the close
of business on the fifteenth day of the month in which such Distribution Date
occurs or (ii) with respect to Simple Interest Mortgage Loans, the calendar
month preceding such Distribution Date.
Primary Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the lesser of (x) the Net Rate Carryover
for such Distribution Date, less any amounts received under the Cap Contract
and (y) the Class A-IO Current Interest and any Class A-IO Interest
Carryforward Amounts payable for such Distribution Date.
Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Principal Funds for such Distribution
Date and (ii) for the December 2001 Distribution Date, any amounts remaining
in the Pre-Funding Account after the end of the Funding Period (net of any
investment income therefrom).
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Principal Funds: The Principal Remittance Amount plus any
Enhancement Payment.
Principal Prepayment: Any Mortgagor payment or other
recovery of (or proceeds with respect to) principal on a Mortgage Loan
(including loans purchased or repurchased under Sections 2.02, 2.03, 2.04,
3.12 and 9.01 hereof) that is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest due on any date or dates in any month or months subsequent to the
month of prepayment. Partial Principal Prepayments shall be applied by the
Master Servicer in accordance with the terms of the related Mortgage Note.
Principal Remittance Amount: (a) The sum, without
duplication, of: (i) the scheduled principal collected with respect to the
Actuarial Mortgage Loans during the related Due Period or advanced on or
before the related Master Servicer Advance Date, (ii) prepayments collected in
the related Prepayment Period, with respect to the Actuarial Mortgage Loans
and, with respect to the Simple Interest Mortgage Loans, all payments received
from the borrower which are allocable to principal, (iii) the Stated Principal
Balance of each Mortgage Loan that was repurchased by the Seller or purchased
by the Master Servicer, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loans is less than the aggregate
unpaid principal balance of any Deleted Mortgage Loans delivered by the Seller
in connection with a substitution of a Mortgage Loan and (v) all Liquidation
Proceeds collected during the related Due Period (to the extent such
Liquidation Proceeds related to principal); less (b) all non-recoverable
Advances relating to principal and certain expenses reimbursed during the
related Due Period.
Prospectus Supplement: The Prospectus Supplement dated
August 24, 2001, relating to the public offering of the Certificates offered
thereby.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x)
required to be repurchased by the Seller or purchased by (1) the Master
Servicer, as applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2)
the Depositor pursuant to Section 2.04 hereof or (y) that the Master Servicer
has a right to purchase pursuant to Section 3.12 hereof, an amount equal to
the sum of (i) 100% of the unpaid principal balance (or, if such purchase or
repurchase, as the case may be, is effected by the Seller (and the Seller is
the Master Servicer) or by the Master Servicer, the Stated Principal Balance)
of the Mortgage Loan as of the date of such purchase and (ii) accrued interest
thereon at the applicable Mortgage Rate (or, if such purchase or repurchase,
as the case may be, is effected by the Seller (and the Seller is the Master
Servicer) or by the Master Servicer, at the Net Mortgage Rate) from (a) the
date through which interest was last paid by the Mortgagor (or, if such
purchase or repurchase, as the case may be, is effected by the Seller (and the
Seller is the Master Servicer) or by the Master Servicer, the date through
which interest was last advanced and not reimbursed by the Master Servicer) to
(b) the Due Date in the month in which the Purchase Price is to be distributed
to Certificateholders.
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Rating Agency: Xxxxx'x and S&P. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of such Liquidated Loan as of the date of such liquidation,
minus (ii) the Liquidation Proceeds, if any, received in connection with such
liquidation during the month in which such liquidation occurs, to the extent
applied as recoveries of principal of the Liquidated Loan. With respect to
each Mortgage Loan that has become the subject of a Deficient Valuation, (i)
if the value of the related Mortgaged Property was reduced below the principal
balance of the related Mortgage Note, the amount by which the value of the
Mortgaged Property was reduced below the principal balance of the related
Mortgage Note, and (ii) if the principal amount due under the related Mortgage
Note has been reduced, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation plus any reduction in the interest component of the Scheduled
Payments. With respect to each Mortgage Loan that has become the subject of a
Debt Service Reduction and any Distribution Date, the amount, if any, by which
the related Scheduled Payment was reduced.
Record Date: With respect to the Class A-IO and Class A-R
Certificates, the last Business Day of the month preceding the month of a
Distribution Date. With respect to the Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates, the Business Day immediately preceding a
Distribution Date, or if such Certificates are no longer book entry
certificates, the last Business Day of the month preceding the month of a
Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple
of 0.03125%) of the offered rates for United States dollar deposits for one
month that are quoted by the Reference Banks as of 11:00 a.m., New York City
time, on the related Interest Determination Date to prime banks in the London
interbank market for a period of one month in amounts approximately equal to
the outstanding balance of the Class A, Class A-R, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates on such Interest Determination Date, provided
that at least two such Reference Banks provide such rate. If fewer than two
offered rates appear, the Reference Bank Rate will be the arithmetic mean
(rounded upwards, if necessary, to the nearest whole multiple of 0.03125%) of
the rates quoted by one or more major banks in New York City, selected by the
Trustee, as of 11:00 a.m., New York City time, on such date for loans in U.S.
dollars to leading European banks for a period of one month in amounts
approximately equal to the outstanding balance of the Class A, Class A-R,
Class M-1, Class M-2, Class B-1 and Class B-2 Certificates on such Interest
Determination Date.
I-31
Reference Banks: Barclays Bank PLC, Bankers Trust and
NatWest, N.A., provided that if any of the foregoing banks are not suitable to
serve as a Reference Bank, then any leading banks selected by the Trustee
which are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) not controlling, under the control of or under common control
with the Depositor or any affiliate thereof and (iii) which have been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than a Class A-R
Certificate.
REO Property: A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with
a defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by
the Seller for a Deleted Mortgage Loan, which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit N, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution,
not in excess of, and not less than 90% of the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) with respect to any Fixed Rate Mortgage Loan, have
a Mortgage Rate not less than or no more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan and, with respect to any Adjustable
Rate Mortgage Loan: (a) have a Maximum Mortgage Rate no more than 1% per annum
higher or lower than the Maximum Mortgage Rate of the Deleted Mortgage Loan;
(b) have a Minimum Mortgage Rate no more than 1% per annum higher or lower
than the Minimum Mortgage Rate of the Deleted Mortgage Loan; (c) have the same
Index and Periodic Rate Cap as that of the Deleted Mortgage Loan and a Gross
Margin not more than 1% per annum higher or lower than that of the Deleted
Mortgage Loan; and (d) not permit conversion of the related Mortgage Rate to a
fixed Mortgage Rate; (iii) have the same or higher credit quality
characteristics than that of the Deleted Mortgage Loan; (iv) at the time of
transfer to the Trust Fund, be accruing interest at a Mortgage Rate not more
than 1% per annum higher or lower than that of the Deleted Mortgage Loan; (v)
have a Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as applicable, no
higher than that of the Deleted Mortgage Loan; (vi) have a remaining term to
maturity no greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate or visa versa; (viii) provide for a prepayment
charge on terms substantially similar to those of the prepayment charge, if
any, of the Deleted Mortgage Loan; (ix) have the same lien priority as the
Deleted Mortgage Loan; (x) constitute the same occupancy type as the Deleted
Mortgage Loan; (xi) be covered by the MGIC Policy if the Deleted Mortgage Loan
was covered by the MGIC Policy, and (xii) comply with each representation and
warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release submitted by
the Master Servicer to the Trustee, substantially in the form of Exhibits M
and N, as appropriate.
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Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, the excess, if any, of (i) $10,000 over (ii) the amount of
funds on deposit in the Carryover Reserve Fund prior to deposits thereto on
such Distribution Date. The Depositor shall cause the deposit of $10,000 to
the Carryover Reserve Fund on the Closing Date.
Required Insurance Policy: With respect to any Mortgage
Loan, any insurance policy that is required to be maintained from time to time
under this Agreement.
Required Percentage: With respect to any Distribution Date
after the Stepdown Date, is equal to the quotient of (x) the excess of (I) the
Stated Principal Balance of the Mortgage Loans for the preceding Distribution
Date over (II) the Certificate Principal Balance of the most senior Class of
the Certificates outstanding as of the preceding Master Servicer Advance Date
and (y) the Stated Principal Balance of the Mortgage Loans for the preceding
Distribution Date.
Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Scheduled Payment: The scheduled monthly payment on a
Mortgage Loan due on any Due Date allocable to principal and/or interest on
such Mortgage Loan.
Secondary Carryover Reserve Fund Deposit: With respect to
any Distribution Date, an amount equal to the excess of (i) $10,000 over (ii)
the amount of funds on deposit in the Carryover Reserve Fund following all
other deposits thereto and distributions therefrom on such Distribution Date.
Seller: Countrywide Home Loans, Inc., a New York
corporation, and its successors and assigns, in its capacity as seller of the
Mortgage Loans to the Depositor.
Seller Loss Coverage Amount: With respect to the first
Distribution Date, an amount equal to the Initial Seller Loss Coverage Amount.
With respect to any Distribution Date prior to the Stepdown Date or as to
which a Trigger Event is in effect, an amount equal to the Initial Seller Loss
Coverage Amount minus all Enhancement Payments made prior to such Distribution
Date. With respect to each Distribution Date on or after the Stepdown Date and
as to which a Trigger Event is not in effect, the lesser of (i) the Initial
Seller Loss Coverage Amount minus all Enhancement Payments made prior to such
Distribution Date, and (ii) 4.00% of the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date; provided, however, in the case
of clause (ii), that such amount shall be subject to a floor of 0.25% of the
aggregate original Certificate Principal Balance of the Certificates.
Seller Loss Coverage Obligation: Pursuant to the obligation
of the Seller described in Section 2.08, an amount the Seller will provide as
coverage against losses realized
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on the Mortgage Loans that the Certificates would otherwise absorb; provided
that such amount is limited to no more than the Seller Loss Coverage Amount.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations hereunder, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and
(iv) compliance with the obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Servicing Fee Rate on the Stated Principal Balance
of such Mortgage Loan for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan,
0.50% per annum.
Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and facsimile signature appear on a list of
servicing officers furnished to the Trustee by the Master Servicer on the
Closing Date pursuant to this Agreement, as such list may from time to time be
amended.
Simple Interest Method: The method of allocating a payment
to principal and interest pursuant to which the portion of such payment that
is allocated to interest is equal to the product of the fixed rate of interest
multiplied by the unpaid principal balance multiplied by the period of time
elapsed since the preceding payment of interest was received and divided by
either 360 or 365, as specified in the related Mortgage Note, and the
remainder of such payment is allocated to principal.
Simple Interest Mortgage Loan: Any Mortgage Loan under which
the portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.
S&P: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
Stated Principal Balance: With respect to any Mortgage Loan
or related REO Property (i) as of the Cut-off Date, the unpaid principal
balance of the Mortgage Loan as of such date (before any adjustment to the
amortization schedule for any moratorium or similar waiver or grace period),
after giving effect to any partial prepayments or Liquidation Proceeds
received prior to such date and to the payment of principal due (with respect
to Actuarial Mortgage Loans) or actually paid( with respect to Simple Interest
Mortgage Loans) on or prior to such date and irrespective any delinquency in
payment by the related mortgagor with respect to Actuarial Mortgage Loans, and
(ii) as of any Distribution Date, the Stated Principal Balance of the
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Mortgage Loan as of its Cut-off Date, minus the sum of (a) the principal
portion of (i) for the Actuarial Mortgage Loans, the Scheduled Payments (x) due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date and (y) that were received by the Master Servicer as of the
close of business on the Determination Date related to such Distribution Date
or with respect to which Advances were made as of the Master Servicer Advance
Date related to such Distribution Date, or (ii) for Simple Mortgage Loans,
actual payments due with respect to the Mortgage Loans on or prior to the end
of the most recent Due Period that were received by the Master Servicer as of
the close of business on the Determination Date related to such Distribution
Date, (b) all Principal Prepayments with respect to such Mortgage Loan received
by the Master Servicer during each Prepayment Period ending prior to such
Distribution Date, and (c) all Liquidation Proceeds collected with respect to
such Mortgage Loan during each Due Period ending prior to such Distribution
Date, to the extent applied by the Master Servicer as recoveries of principal
in accordance with Section 3.12. The Stated Principal Balance of any Mortgage
Loan that becomes a Liquidated Loan will be zero on the Distribution Date
following the Due Period in which such Mortgage Loan becomes a Liquidated
Loan. References herein to the Stated Principal Balance the Mortgage Loans at
any time shall mean the aggregate Stated Principal Balances of all Mortgage
Loans in the Trust Fund as of such time.
Stepdown Date: The later to occur of (i) the Distribution
Date in September 2004 or (ii) the first Distribution Date on which the Class
A Certificate Principal Balance is less than or equal to 85.00% of the Stated
Principal Balances of the Mortgage Loans for such Distribution Date.
Subordinate Certificates: The Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of all amounts in
respect of (i) principal of the related Subsequent Mortgage Loans due after
the related Subsequent Cut-off Date and received by the Master Servicer on or
before such Subsequent Transfer Date and not applied in computing the Cut-off
Date Principal Balance thereof and (ii) interest on the such Subsequent
Mortgage Loans due after such Subsequent Cut-off Date and received by the
Master Servicer on or before the Subsequent Transfer Date.
Subsequent Cut-off Date: As defined in the definition of
Cut-off Date.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the
Trust Fund pursuant to Section 2.01(b) on a Subsequent Transfer Date, and
listed on the related Loan Number and Borrower Identification Mortgage Loan
Schedule delivered pursuant to Section 2.01(f). When used with respect to a
single Subsequent Transfer Date, "Subsequent Mortgage Loan" shall mean a
Subsequent Mortgage Loan conveyed to the Trust Fund on such Subsequent
Transfer Date.
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Subsequent Transfer Agreement: A Subsequent Transfer
Agreement substantially in the form of Exhibit Q hereto, executed and
delivered by the Seller, the Depositor and the Trustee as provided in Section
2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer
Agreement, the "Subsequent Transfer Date" identified in such Subsequent
Transfer Agreement; provided, however, the Subsequent Transfer Date for any
Subsequent Transfer Agreement may not be a date earlier than the date on which
the Subsequent Transfer Agreement is executed and delivered by the parties
thereto pursuant to Section 2.01(d).
Subsequent Transfer Date Aggregate Purchase Amount: With
respect to any Subsequent Transfer Date, the "Subsequent Transfer Date
Aggregate Purchase Amount" identified in the related Subsequent Transfer
Agreement which shall be an estimate of the aggregate Stated Principal
Balances of the Subsequent Mortgage Loans identified in such Subsequent
Transfer Agreement.
Subsequent Transfer Date Aggregate Transfer Amount: With
respect to any Subsequent Transfer Date, the aggregate Stated Principal
Balances as of the related Subsequent Cut-off Dates of the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date, as listed on the related Loan
Number and Borrower Identification Mortgage Loan Schedule delivered pursuant
to Section 2.01(f); provided, however, that such amount shall not exceed the
amount on deposit in the Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(c), the excess of (x) the principal
balance of the Mortgage Loan that is substituted for, over (y) the principal
balance of the related substitute Mortgage Loan, each balance being determined
as of the date of substitution.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this person
shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate
with a Denomination of $0.05.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
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Trigger Event: With respect to any Distribution Date after
the Stepdown Date exists if the product of (i) 0.75 times (ii) the quotient
(expressed as a percentage) of (A) the numerator of which is the aggregate
Stated Principal Balance for such Distribution Date of all Mortgage Loans 60
or more days delinquent as of the close of business on the last day of the
calendar month preceding such Distribution Date (including Mortgage Loans in
foreclosure and REO Properties) and (B) the denominator of which is the
aggregate Stated Principal Balance for such Distribution Date of all Mortgage
Loans, equals or exceeds the related Required Percentage.
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto on and after the Cut-off Date to the extent not
applied in computing the Cut-off Date Principal Balance thereof, exclusive of
interest not required to be deposited in the Certificate Account pursuant to
Section 3.05(b)(ii); (ii) the Certificate Account, the Distribution Account,
the Pre-Funding Account, the Capitalized Interest Account and the Carryover
Reserve Fund, and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) the Cap Contract; (iv) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed in lieu of
foreclosure or otherwise; (v) the mortgagee's rights under the Insurance
Policies with respect to the Mortgage Loan; and (vi) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or
other liquid property.
Trustee: The Bank of New York, a New York banking
corporation, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee as may from time to time
be serving as successor trustee hereunder.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i) the Pool
Stated Principal Balance plus (ii) any amounts remaining in the Pre-Funding
Account (excluding any investment earnings thereon) with respect to such
Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.009%
per annum.
Underwriter's Exemption: Prohibited Transaction Exemption
2000-58, 65 Fed. Reg. 67765 (2000), as amended (or any successor thereto), or
any substantially similar administrative exemption granted by the U.S.
Department of Labor.
Unused Pre-Funded Amount: The Pre-Funded Amount immediately
after the end of the Funding Period.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Class A, Class M-1, Class
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M-2, Class B-1 and Class B-2 Certificates, and 5% to the Class A-IO
Certificates and Class A-R Certificates; with the allocation among the Class A,
Class M-1, Class M-2, Class B-1 and Class B-2 Certificates to be in proportion
to the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes, and with the allocation among the
Class A-IO and Class A-R Certificates being one-half each. Voting Rights will
be allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.
Weighted Maximum Rate Cap: As of any Distribution Date, a
rate equal to the weighted average of the Adjusted Maximum Mortgage Rates on
the Mortgage Loans.
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ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Seller hereby sells, transfers, assigns, sets over
and otherwise conveys to the Depositor, without recourse, all the right, title
and interest of the Seller in and to the Initial Mortgage Loans, including all
interest and principal received and receivable by the Seller on or with
respect to the Initial Mortgage Loans after the Initial Cut-off Date (to the
extent not applied in computing the Cut-off Date Principal Balance thereof) or
deposited into the Certificate Account by the Seller as an Initial Certificate
Account Deposit as provided in this Agreement, other than principal due on the
Initial Mortgage Loans on or prior to the Initial Cut-off Date and interest
accruing prior to the Initial Cut-off Date. The Seller confirms that,
concurrently with the transfer and assignment, it has deposited into the
Certificate Account the Initial Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage
Loans referred to in the preceding paragraph, the Depositor sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders, without recourse, all right title and interest in the
Initial Mortgage Loans and causes the Seller to issue the Seller Loss Coverage
Obligation in favor of the Trust pursuant to Section 2.08 hereof.
The Seller further agrees to assign all of its right, title
and interest in and to the interest rate cap transaction evidenced by the
Amended Confirmation And Agreement to, and to cause all of its obligations in
respect of such transaction to be assumed by, the Trustee on behalf of the
Trust Fund, on the terms and conditions set forth in the Cap Contract
Assignment Agreement.
(b) Subject to the execution and delivery of the related
Subsequent Transfer Agreement as provided by Section 2.01(d) and the terms and
conditions of this Agreement, the Seller sells, transfers, assigns, sets over
and otherwise conveys to the Depositor, without recourse, on each Subsequent
Transfer Date, all the right, title and interest of the Seller in and to the
related Subsequent Mortgage Loans, including all interest and principal
received and receivable by the Seller on or with respect to such Subsequent
Mortgage Loans after the related Subsequent Cut-off Date (to the extent not
applied in computing the Cut-off Date Principal Balance thereof) or deposited
into the Certificate Account by the Seller as a Subsequent Certificate Account
Deposit as provided in this Agreement, other than principal due on such
Subsequent Mortgage Loans on or prior to the related Subsequent Cut-off Date
and interest accruing prior to the related Subsequent Cut-off Date.
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Immediately upon the conveyance of the Subsequent Mortgage
Loans referred to in the preceding paragraph, the Depositor sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders, without recourse, all right title and interest in the
Subsequent Mortgage Loans.
(c) The Seller has entered into this Agreement in
consideration for the purchase of the Mortgage Loans by the Depositor and has
agreed to take the actions specified herein. The Depositor, concurrently with
the execution and delivery of this Agreement, hereby sells, transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of the
Certificateholders, without recourse, all right title and interest in the
portion of the Trust Fund not otherwise conveyed to the Trust Fund pursuant to
Sections 2.01(a) or (b).
(d) On (x) August 31, 2001 and (y) on any Business Day
during the Funding Period designated to the Trustee by the Seller, the Seller,
the Depositor and the Trustee shall complete, execute and deliver a Subsequent
Transfer Agreement. After the execution and delivery of such Subsequent
Transfer Agreement, on the Subsequent Transfer Date, the Trustee shall set
aside in the Pre-Funding Account an amount equal to the related Subsequent
Transfer Date Aggregate Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the
Subsequent Transfer Date is subject to the satisfaction of each of the
following conditions:
(i) the Trustee will be provided Opinions of Counsel
addressed to the Rating Agencies as with respect to the sale of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date
(such opinions being substantially similar to the opinions delivered
on the Closing Date to the Rating Agencies with respect to the sale
of the Initial Mortgage Loans on the Closing Date), to be delivered
as provided in Section 2.01(f);
(ii)the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans does
not result in a reduction or withdrawal of the any ratings assigned
to the Certificates by the Ratings Agencies;
(iii) the Depositor shall deliver to the Trustee an
Officer's Certificate confirming the satisfaction of each of the
conditions set forth in this Section 2.01(e) required to be satisfied
by such Subsequent Transfer Date;
(iv)each Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date satisfies the representations and warranties
applicable to it under this Agreement, provided, however, that with
respect to a breach of a representation and warranty with respect to
a Subsequent Mortgage Loan set forth in this clause (iv), the
obligation under Section 2.03(e) of this Agreement of the Seller to
cure, repurchase or replace such Subsequent Mortgage Loan shall
constitute the sole remedy against the Seller respecting such breach
available to Certificateholders, the Depositor or the Trustee.
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(v) the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date were selected in a manner reasonably
believed not to be adverse to the interests of the
Certificateholders;
(vi)no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date was 60 or more days delinquent;
(vii) following the conveyance of the Subsequent Mortgage
Loans on such Subsequent Transfer Date, the characteristics of the
Mortgage Loans will not vary by more than 10% from the
characteristics listed below; provided that for the purpose of making
such calculations, the characteristics for any Initial Mortgage Loan
made will be taken as of the Initial Cut-off Date and the
characteristics for any Subsequent Mortgage Loans will be taken as of
the Subsequent Cut-off Date:
Average Principal Balance:......................... $133,077
Weighted Average Mortgage Rate:.................... 9.224%
Weighted Average Combined Loan-to-Value Ratio:..... 79.61%
Weighted Average Amortization Remaining Term
to Maturity:..................................... 354 months
(viii) neither the Seller nor the Depositor is insolvent and
neither the Seller nor the Depositor will be rendered insolvent by
the conveyance of Subsequent Mortgage Loans on such Subsequent
Transfer Date; and
(ix)the Trustee will be provided with an Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect
that such purchase of Subsequent Mortgage Loans will not (i) result
in the imposition of the tax on "prohibited transactions" on the
Trust Fund or contributions after the Startup Date, as defined in
Sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the Trust Fund to fail to qualify as a REMIC, such opinion to
be delivered as provided in Section 2.01(f).
The Trustee shall not be required to investigate or
otherwise verify compliance with these conditions, except for its own receipt
of documents specified above, and shall be entitled to rely on the required
Officer's Certificate.
(f) Within five Business Days after each Subsequent Transfer
Date, upon (1) delivery to the Trustee by the Depositor of the Opinions of
Counsel referred to in Section 2.01(e)(i) and (e)(ix), (2) delivery to the
Trustee by the Seller of a Loan Number and Borrower Identification Mortgage
Loan Schedule reflecting the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date and (3) delivery to the Trustee by the Depositor of
an Officer's Certificate confirming the satisfaction of each of the conditions
precedent set forth in this Section 2.01(f), the Trustee shall pay the Seller
the Subsequent Transfer Date Aggregate Transfer Amount from such funds that
were set aside in the Pre-Funding Account pursuant to Section 2.01(d). On the
Business Day preceding the Distribution Date next following such Subsequent
Transfer Date, the Trustee shall deposit the Capitalized Interest Account
Requirement with
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respect to the Subsequent Mortgage Loans in the Distribution Account. The
positive difference, if any, between the Subsequent Transfer Date Aggregate
Transfer Amount and the Subsequent Transfer Date Aggregate Purchase
Amount shall be re-invested by the Trustee in the Pre-Funding Account.
The Trustee shall not be required to investigate or
otherwise verify compliance with the conditions set forth in the preceding
paragraph, except for its own receipt of documents specified above, and shall
be entitled to rely on the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee a letter of a nationally recognized
firm of independent public accountants stating whether or not the Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date conform to the
characteristics described in Section 2.01(e)(vi) and (vii).
(g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited with, the
Co-Trustee (or, in the case of the Delay Delivery Mortgage Loans, will deliver
to, and deposit with, the Co-Trustee within the time periods specified in the
definition of Delay Delivery Mortgage Loans) (except as provided in clause
(vi) below) for the benefit of the Certificateholders, the following documents
or instruments with respect to each such Mortgage Loan so assigned (with
respect to each Mortgage Loan, clause (i) through (vi) below, together, the
"Mortgage File" for each such Mortgage Loan):
(i) the original Mortgage Note, endorsed by the Seller or
the originator of such Mortgage Loan, without recourse, in the
following form: "Pay to the order of ________________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Seller, or, if the
original Mortgage Note has been lost or destroyed and not replaced,
an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of
the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the presence
of the MIN of the Mortgage Loan and language indicating that the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has
been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2001-BC3, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the
Pooling and Servicing Agreement dated as of August 1, 2001, without
recourse" (each such assignment, when duly and validly completed, to
be in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which such
assignment relates);
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(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto or, in the event such original title policy has not been
received from the insurer, such original or duplicate original
lender's title policy and all riders thereto shall be delivered
within one year of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has
done so) that such Mortgage Loans have been assigned by the Seller to the
Trustee in accordance with this Agreement (and any Subsequent Transfer
Agreement, as applicable) for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code "[IDENTIFY
TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE FIELD NAME FOR TRUSTEE]"
which identifies the Trustee and (b) the code "[IDENTIFY SERIES SPECIFIC CODE
NUMBER]" in the field "Pool Field" which identifies the series of the
Certificates issued in connection with such Mortgage Loans. The Seller further
agrees that it will not, and will not permit the Master Servicer to, and the
Master Servicer agrees that it will not, alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the
terms of this Agreement.
In the event that in connection with any Mortgage Loan that
is not a MERS Mortgage Loan the Seller cannot deliver the original recorded
Mortgage or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv) concurrently with the execution and
delivery hereof, the Seller shall deliver or cause to be delivered to the
Co-Trustee a true copy of such Mortgage and of each such undelivered interim
assignment of the Mortgage each certified by the Seller, the applicable title
company, escrow agent or attorney, or the originator of such Mortgage, as the
case may be, to be a true and complete copy of the original Mortgage or
assignment of Mortgage submitted for recording. For any such Mortgage Loan
that is not a MERS Mortgage Loan the Seller shall promptly deliver or cause to
be delivered to the Co-Trustee such original Mortgage and such assignment or
assignments with evidence of recording indicated thereon upon receipt thereof
from the public recording official, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery be made later than 270 days following the Closing Date; provided that
in the event that by such date the Seller is unable to deliver or cause to be
delivered each such Mortgage and each interim assignment by reason of the fact
that any such documents have not been returned by the appropriate recording
office, or, in the case of each interim assignment, because the related
Mortgage has not been returned by the appropriate recording office, the
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Seller shall deliver or cause to be delivered such documents to the Co-Trustee
as promptly as possible upon receipt thereof. If the public recording office in
which a Mortgage or interim assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office, shall satisfy the Seller's
obligations in Section 2.01. If any document submitted for recording pursuant
to this Agreement is (x) lost prior to recording or rejected by the applicable
recording office, the Seller shall immediately prepare or cause to be prepared
a substitute and submit it for recording, and shall deliver copies and
originals thereof in accordance with the foregoing or (y) lost after
recording, the Seller shall deliver to the Co-Trustee a copy of such document
certified by the applicable public recording office to be a true and complete
copy of the original recorded document. The Seller shall promptly forward or
cause to be forwarded to the Co-Trustee (x) from time to time additional
original documents evidencing an assumption or modification of a Mortgage Loan
and (y) any other documents required to be delivered by the Depositor or the
Master Servicer to the Trustee within the time periods specified in this
Section 2.01.
With respect to each Mortgage Loan other than a MERS
Mortgage Loan as to which the related Mortgaged Property and Mortgage File are
located in (a) the State of California or (b) any other jurisdiction under the
laws of which the recordation of the assignment specified in clause (iii)
above is not necessary to protect the Trustee's and the Certificateholders,
interest in the related Mortgage Loan, as evidenced by an Opinion of Counsel,
delivered by the Seller to the Trustee and a copy to the Rating Agencies, in
lieu of recording the assignment specified in clause (iii) above, the Seller
may deliver an unrecorded assignment in blank, in form otherwise suitable for
recording to the Co-Trustee; provided that if the related Mortgage has not
been returned from the applicable public recording office, such assignment, or
any copy thereof, of the Mortgage may exclude the information to be provided
by the recording office. As to any Mortgage Loan other than a MERS Mortgage
Loan, the procedures of the preceding sentence shall be applicable only so
long as the related Mortgage File is maintained in the possession of the
Co-Trustee in the State or jurisdiction described in such sentence. In the
event that with respect to Mortgage Loans other than MERS Mortgage Loans (i)
the Seller, the Depositor or the Master Servicer gives written notice to the
Trustee that recording is required to protect the right, title and interest of
the Trustee on behalf of the Certificateholders in and to any Mortgage Loan,
(ii) a court recharacterizes the sale of the Mortgage Loans as a financing, or
(iii) as a result of any change in or amendment to the laws of the State or
jurisdiction described in the first sentence of this paragraph or any
applicable political subdivision thereof, or any change in official position
regarding application or interpretation of such laws, including a holding by a
court of competent jurisdiction, such recording is so required, the Trustee or
the Co-Trustee shall complete the assignment in the manner specified in clause
(iii) of the second paragraph of this Section 2.01 and the Seller shall submit
or cause to be submitted for recording as specified above or, should the
Seller fail to perform such obligations, the Trustee shall cause the Master
Servicer, at the Master Servicer's expense, to cause each such previously
unrecorded assignment to be submitted for recording as specified above. In the
event a Mortgage File is released to the Master Servicer as a result of the
Master Servicer's having completed a Request for Release in
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the form of Exhibit M, the Trustee shall complete the assignment of the related
Mortgage in the manner specified in clause (iii) of the second paragraph of
this Section 2.01.
So long as the Co-Trustee maintains an office in the State
of California, the Co-Trustee shall maintain possession of and not remove or
attempt to remove from the State of California any of the Mortgage Files as to
which the related Mortgaged Property is located in such State. In the event
that the Seller fails to record an assignment of a Mortgage Loan as herein
provided within 90 days of notice of an event set forth in clause (i), (ii) or
(iii) of the above paragraph, the Master Servicer shall prepare and, if
required hereunder, file such assignments for recordation in the appropriate
real property or other records office. The Seller hereby appoints the Master
Servicer (and any successor servicer hereunder) as its attorney-in-fact with
full power and authority acting in its stead for the purpose of such
preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date (in the case of Initial Mortgage
Loans) or Subsequent Transfer Date (in the case of Subsequent Mortgage Loans)
and the Cut-off Date, the Seller shall deposit or cause to be deposited in the
Certificate Account the amount required to be deposited therein with respect
to such payment pursuant to Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement,
within thirty days after the Closing Date (in the case of Initial Mortgage
Loans) or Subsequent Transfer Date (in the case of Subsequent Mortgage Loans),
the Seller shall either (i) deliver to the Co-Trustee the Mortgage File as
required pursuant to this Section 2.01 for each Delay Delivery Mortgage Loan
or (ii) (A) repurchase the Delay Delivery Mortgage Loan or (B) substitute the
Delay Delivery Mortgage Loan for a Replacement Mortgage Loan, which repurchase
or substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03, provided that if the Seller fails to
deliver a Mortgage File for any Delay Delivery Mortgage Loan within the period
provided in the prior sentence, the cure period provided for in Section 2.02
or in Section 2.03 shall not apply to the initial delivery of the Mortgage
File for such Delay Delivery Mortgage Loan, but rather the Seller shall have
five (5) Business Days to cure such failure to deliver. The Seller shall
promptly provide each Rating Agency with written notice of any cure,
repurchase or substitution made pursuant to the proviso of the preceding
sentence. On or before the thirtieth (30th) day (or if such thirtieth day is
not a Business Day, the succeeding Business Day) after the Closing Date (in
the case of Initial Mortgage Loans) or Subsequent Transfer Date (in the case
of Subsequent Mortgage Loans), the Trustee shall, in accordance with the
provisions of Section 2.02, send a Delay Delivery Certification substantially
in the form annexed hereto as Exhibit G-3 (with any applicable exceptions
noted thereon) for all Delay Delivery Mortgage Loan delivered within thirty
(30) days after such date. The Trustee will promptly send a copy of such Delay
Delivery Certification to each Rating Agency.
Section 2.02. Acceptance by Trustee of the Mortgage Loans.
(a) The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial Certification
in the form annexed hereto as Exhibit G-1
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and in the list of exceptions attached thereto, of the documents referred to in
clauses (i) and (iii) of Section 2.01(g) above with respect to the Initial
Mortgage Loans and all other assets included in the Trust Fund and declares
that it holds and will hold such documents and the other documents delivered
to it constituting the Mortgage Files, and that it holds or will hold such
other assets included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees to execute and deliver on the Closing
Date to the Depositor, the Master Servicer and the Seller an Initial
Certification substantially in the form annexed hereto as Exhibit G-1 to the
effect that, as to each Initial Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Initial Mortgage Loan paid in full or any Initial
Mortgage Loan specifically identified in such certification as not covered by
such certification), the documents described in Section 2.01(g)(i) and, in the
case of each Mortgage Loan that is not a MERS Mortgage Loan, the documents
described in Section 2.01(g)(iii), with respect to such Initial Mortgage Loan
are in the Co-Trustee's possession, and based on its review and examination
and only as to the foregoing documents, such documents appear regular on their
face and relate to such Initial Mortgage Loan. The Trustee agrees to execute
and deliver within 30 days after the Closing Date to the Depositor, the Master
Servicer and the Seller an Interim Certification substantially in the form
annexed hereto as Exhibit G-2 to the effect that, as to each Initial Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Initial Mortgage
Loan paid in full or any Initial Mortgage Loan specifically identified in such
certification as not covered by such certification), all documents required to
be delivered to the Co-Trustee pursuant to this Agreement with respect to such
Initial Mortgage Loan are in its possession (except those described in Section
2.01(g)(vi)) and based on its review and examination and only as to the
foregoing documents, (i) such documents appear regular on their face and
relate to such Initial Mortgage Loan, and (ii) the information set forth in
items (i), (iv), (v), (vi), (viii), (xi) and (xiv) of the definition of the
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. On or before the thirtieth (30th) day after the Closing Date
(or if such thirtieth day is not a Business Day, the succeeding Business Day),
the Trustee shall deliver to the Depositor, the Master Servicer and the Seller
a Delay Delivery Certification with respect to the Initial Mortgage Loans
substantially in the form annexed hereto as Exhibit G-3, with any applicable
exceptions noted thereon. The Co-Trustee or the Trustee, as applicable, shall
be under no duty or obligation to inspect, review or examine such documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and the Seller (and to any
Certificateholder that so requests) a Final Certification with respect to the
Initial Mortgage Loans substantially in the form annexed hereto as Exhibit
H-1, with any applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of
such Final Certification, the Co-Trustee, at the Trustee's direction, shall
review each Mortgage File with
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respect to the Initial Mortgage Loans to determine that such Mortgage File
contains the following documents:
(i) the original Mortgage Note, endorsed by the Seller or
the originator of such Mortgage Loan, without recourse, in the
following form: "Pay to the order of ________________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Seller, or, if the
original Mortgage Note has been lost or destroyed and not replaced,
an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of
the related Mortgage Note;
(ii)in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage, and in the case
of each Initial Mortgage Loan that is a MERS Mortgage Loan, the
original Mortgage, noting the presence of the MIN of the Initial
Mortgage Loan and language indicating that the Initial Mortgage Loan
is a MOM Loan if the Initial Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which Mortgage has been
recorded;
(iii) in the case of each Initial Mortgage Loan that is not
a MERS Mortgage Loan, a duly executed assignment of the Mortgage in
the form permitted by Section 2.01;
(iv)the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi)the original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders thereto.
If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include such exceptions in such Final Certification (and the Trustee shall
state in such Final Certification whether any Mortgage File does not then
include the original or duplicate original lender's title policy or a printout
of the electronic equivalent and all riders thereto). If the public recording
office in which a Mortgage or assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable. The Seller
shall promptly correct or cure such defect referred to above within 90 days
from the date it was so notified of such defect and, if the Seller does not
correct or cure such defect within such period, the Seller shall either (A) if
the time to cure such defect expires prior to the end of the second
anniversary of the Closing Date, substitute for the related
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Initial Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (B) purchase such Initial Mortgage Loan from the Trust Fund within 90
days from the date the Seller was notified of such defect in writing at the
Purchase Price of such Mortgage Loan; provided that any such substitution
pursuant to (A) above or repurchase pursuant to (B) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05 hereof and any substitution pursuant to (A) above shall not be
effected prior to the additional delivery to the Co-Trustee of a Request for
Release substantially in the form of Exhibit N. No substitution will be made in
any calendar month after the Determination Date for such month. The Purchase
Price for any such Initial Mortgage Loan shall be deposited by the Seller in the
Certificate Account and, upon receipt of such deposit and certification with
respect thereto in the form of Exhibit N hereto, the Co-Trustee shall release
the related Mortgage File to the Seller and shall execute and deliver at the
Seller's request such instruments of transfer or assignment as the Seller has
prepared, in each case without recourse, as shall be necessary to vest in the
Seller, or a designee, the Trust Fund's interest in any Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions the Seller
repurchases an Initial Mortgage Loan that is a MERS Mortgage Loan, the Master
Servicer shall cause MERS to execute and deliver an assignment of the Mortgage
in recordable form to transfer the Mortgage from MERS to the Seller and shall
cause such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations.
The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of
the Seller from time to time.
It is understood and agreed that the obligation of the
Seller to substitute for or to purchase any Mortgage Loan that does not meet
the requirements of Section 2.02(a)(A) or (B) above shall constitute the sole
remedy respecting such defect available to the Trustee, the Co-Trustee, the
Depositor and any Certificateholder against the Seller.
(b) The Trustee agrees to execute and deliver on the
Subsequent Transfer Date to the Depositor, the Master Servicer and the Seller
an Initial Certification substantially in the form annexed hereto as Exhibit
G-4 to the effect that, as to each Subsequent Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Subsequent Mortgage Loan paid in full
or any Subsequent Mortgage Loan specifically identified in such certification
as not covered by such certification), the documents described in Section
2.01(g)(i) and, in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the documents described in Section 2.01(g)(iii), with respect to such
Subsequent Mortgage Loan are in its possession, and based on its review and
examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Subsequent Mortgage Loan.
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The Trustee agrees to execute and deliver within 30 days
after the Subsequent Transfer Date to the Depositor, the Master Servicer and
the Seller an Interim Certification substantially in the form annexed hereto
as Exhibit G-2 to the effect that, as to each Subsequent Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Subsequent Mortgage Loan paid in
full or any Subsequent Mortgage Loan specifically identified in such
certification as not covered by such certification), all documents required to
be delivered to it pursuant to this Agreement with respect to such Subsequent
Mortgage Loan are in its possession (except those described in Section
2.01(g)(vi)) and based on its review and examination and only as to the
foregoing documents, (i) such documents appear regular on their face and
relate to such Subsequent Mortgage Loan, and (ii) the information set forth in
items (i), (iv), (v), (vi), (viii) and (xiv) of the definition of the
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. On or before the thirtieth (30th) day after the Subsequent
Transfer Date (or if such thirtieth day is not a Business Day, the succeeding
Business Day), the Trustee shall deliver to the Depositor, the Master Servicer
and the Seller a Delay Delivery Certification with respect to the Subsequent
Mortgage Loans substantially in the form annexed hereto as Exhibit G-3, with
any applicable exceptions noted thereon, together with a Subsequent
Certification substantially in the form annexed hereto as Exhibit G-4. The
Co-Trustee or the Trustee, as applicable, shall be under no duty or obligation
to inspect, review or examine such documents, instruments, certificates or
other papers to determine that the same are genuine, enforceable or
appropriate for the represented purpose or that they have actually been
recorded in the real estate records or that they are other than what they
purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date,
the Trustee shall deliver to the Depositor, the Master Servicer, the Seller
and to any Certificateholder that so requests a Final Certification with
respect to the Subsequent Mortgage Loans substantially in the form annexed
hereto as Exhibit H-1, with any applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of
such Final Certification, the Co-Trustee, at the Trustee's direction, shall
review each Mortgage File with respect to the Subsequent Mortgage Loans to
determine that such Mortgage File contains the following documents:
(i) the original Mortgage Note, endorsed by the Seller or
the originator of such Mortgage Loan, without recourse, in the
following form: "Pay to the order of ________________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Seller, or, if the
original Mortgage Note has been lost or destroyed and not replaced,
an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of
the related Mortgage Note;
(ii)in the case of each Subsequent Mortgage Loan that is not
a MERS Mortgage Loan, the original recorded Mortgage, and in the case
of each Subsequent Mortgage Loan that is a MERS Mortgage Loan, the
original Mortgage, noting the presence of the MIN of the Subsequent
Mortgage Loan and language indicating that the Subsequent Mortgage
II-11
Loan is a MOM Loan if the Subsequent Mortgage Loan is a MOM Loan,
with evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which Mortgage
has been recorded;
(iii) in the case of each Subsequent Mortgage Loan that is
not a MERS Mortgage Loan, a duly executed assignment of the Mortgage
in the form permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders thereto.
If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include such exceptions in such Final Certification (and the Trustee shall
state in such Final Certification whether any Mortgage File does not then
include the original or duplicate original lender's title policy or a printout
of the electronic equivalent and all riders thereto). If the public recording
office in which a Mortgage or assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable. The Seller
shall promptly correct or cure such defect referred to above within 90 days
from the date it was so notified of such defect and, if the Seller does not
correct or cure such defect within such period, the Seller shall either (A) if
the time to cure such defect expires prior to the end of the second
anniversary of the Closing Date, substitute for the related Subsequent
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (B) purchase such Subsequent Mortgage Loan from the Trust Fund within
90 days from the date the Seller was notified of such defect in writing at the
Purchase Price of such Subsequent Mortgage Loan; provided that any such
substitution pursuant to (A) above or repurchase pursuant to (B) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and any substitution pursuant to (A) above
shall not be effected prior to the additional delivery to the Co-Trustee of a
Request for Release substantially in the form of Exhibit N. No substitution
will be made in any calendar month after the Determination Date for such
month. The Purchase Price for any such Subsequent Mortgage Loan shall be
deposited by the Seller in the Certificate Account and, upon receipt of such
deposit and certification with respect thereto in the form of Exhibit N
hereto, the Co-Trustee shall release the related Mortgage File to the Seller
and shall execute and deliver at the Seller's request such instruments of
transfer or assignment as the Seller has prepared, in each case without
recourse, as shall be necessary to vest in the Seller, or a designee, the
Trust Fund's interest in any Mortgage
II-12
Loan released pursuant hereto. If pursuant to the foregoing provisions the
Seller repurchases a Subsequent Mortgage Loan that is a MERS Mortgage Loan,
the Master Servicer shall cause MERS to execute and deliver an assignment of
the Mortgage in recordable form to transfer the Mortgage from MERS to the
Seller and shall cause such Mortgage to be removed from registration on the
MERS(R) System in accordance with MERS' rules and regulations.
The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of
the Seller from time to time.
It is understood and agreed that the obligation of the
Seller to substitute for or to purchase, pursuant to Section 2.02(b)(A) or (B)
respectively, any Mortgage Loan whose Mortgage File contains any document or
documents that does not meet the requirements of clauses (i)-(iv) and (vi)
above and which defect is not corrected or cured by the Seller within 90 days
from the date it was notified of such defect, shall constitute the sole remedy
respecting such defect available to the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against the Seller.
Section 2.03. Representations, Warranties and Covenants of
the Master Servicer and the Seller.
(a) The Master Servicer hereby represents and warrants to
the Depositor and the Trustee as follows, as of the date hereof with respect
to the Initial Mortgage Loans, and the related Subsequent Transfer Date with
respect to the Subsequent Mortgage Loans:
(i) The Master Servicer is duly organized as a New York
corporation and is validly existing and in good standing under the
laws of the State of New York and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Master Servicer in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with
the doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Mortgage Loan, to service the
Mortgage Loans in accordance with the terms of this Agreement and to
perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(ii)The Master Servicer has the full corporate power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized
by all necessary corporate action on the part of the Master Servicer
the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable against the
Master Servicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by
II-13
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer under this Agreement, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of
or compliance with the terms hereof are in the ordinary course of
business of the Master Servicer and will not (A) result in a material
breach of any term or provision of the charter or by-laws of the
Master Servicer or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to
which the Master Servicer is a party or by which it may be bound, or
(C) constitute a material violation of any statute, order or
regulation applicable to the Master Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over the Master Servicer; and the Master Servicer is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental
body having jurisdiction over it which breach or violation may
materially impair the Master Servicer's ability to perform or meet
any of its obligations under this Agreement.
(iv)The Master Servicer is an approved servicer of
conventional mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and is a
mortgagee approved by the Secretary of Housing and Urban Development
pursuant to sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master
Servicer to service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of, or compliance by
the Master Servicer with, this Agreement or any Subsequent Transfer
Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Master Servicer has obtained the same.
(vii) The Master Servicer is a member of MERS in good
standing, and will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the Mortgage
Loans for as long as such Mortgage Loans are registered with MERS.
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(b) The Seller hereby represents and warrants to the
Depositor and the Trustee as follows, as of the Initial Cut-off Date in the
case of the Initial Mortgage Loans and as of the related Subsequent Cut-off
Date in the case of the Subsequent Mortgage Loans (unless otherwise indicated
or the context otherwise requires, percentages with respect to the Initial
Mortgage Loans are measured by the Initial Cut-off Date Principal Balance):
(i) The Seller is duly organized as a New York corporation
and is validly existing and in good standing under the laws of the
State of New York and is duly authorized and qualified to transact
any and all business contemplated by this Agreement and each
Subsequent Transfer Agreement to be conducted by the Seller in any
state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in
any event, is in compliance with the doing business laws of any such
state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to sell the Mortgage Loans in accordance with the
terms of this Agreement and each Subsequent Transfer Agreement and to
perform any of its other obligations under this Agreement and each
Subsequent Transfer Agreement in accordance with the terms hereof.
(ii)The Seller has the full corporate power and authority to
sell each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement and has duly
authorized by all necessary corporate action on the part of the
Seller the execution, delivery and performance of this Agreement and
each Subsequent Transfer Agreement; and this Agreement and each
Subsequent Transfer Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by the Seller, the sale of the Mortgage
Loans by the Seller under this Agreement and each Subsequent Transfer
Agreement, the consummation of any other of the transactions
contemplated by this Agreement and each Subsequent Transfer
Agreement, and the fulfillment of or compliance with the terms hereof
and thereof are in the ordinary course of business of the Seller and
will not (A) result in a material breach of any term or provision of
the charter or by-laws of the Seller or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result
in a material default under, the terms of any other material
agreement or instrument to which the Seller is a party or by which it
may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to the Seller of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over the Seller; and the
II-15
Seller is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Seller's
ability to perform or meet any of its obligations under this
Agreement and each Subsequent Transfer Agreement.
(iv)The Seller is an approved seller of conventional
mortgage loans for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant
to sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement and each Subsequent Transfer Agreement or the ability of
the Seller to sell the Mortgage Loans or to perform any of its other
obligations under this Agreement and each Subsequent Transfer
Agreement in accordance with the terms hereof.
(vi)No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Seller of, or compliance by the
Seller with, this Agreement and each Subsequent Transfer Agreement or
the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the
Seller has obtained the same.
(vii) The information set forth on Exhibit F-1 hereto with
respect to each Initial Mortgage Loan is true and correct in all
material respects as of the Closing Date.
(viii) The Seller will treat the transfer of the Mortgage
Loans to the Depositor as a sale of the Mortgage Loans for all tax,
accounting and regulatory purposes.
(ix)None of the Initial Mortgage Loans are more than 60 days
delinquent in payment of principal and interest.
(x) No Mortgage Loan that is an Initial Mortgage Loan
secured by a first lien on the related Mortgaged Property had a
Loan-to-Value Ratio at origination in excess of 100%; and no Mortgage
Loan that is an Initial Mortgage Loan secured by a second lien on the
related Mortgaged Property had a Combined Loan-to-Value Ratio at
origination in excess of 100%.
(xi)Each Mortgage Loan is secured by a valid and enforceable
first or second lien on the related Mortgaged Property , subject only
to (1) the lien of non-delinquent current real property taxes and
assessments, (2) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions appearing of record being
acceptable to mortgage lending institutions generally or specifically
reflected in the appraisal made in connection with the origination of
the related Mortgage Loan, (3) other matters to which like properties
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are commonly subject that do not materially interfere with the
benefits of the security intended to be provided by such Mortgage and
(4) only in the case of each Mortgage Loan which is secured by a
valid and enforceable second lien on the Mortgaged Property, any
senior mortgage loan secured by such Mortgaged Property and
identified in the Mortgage File related to such Mortgage Loan.
Approximately 100% of the Mortgage Loans that are Initial Mortgage
Loans are first liens. Approximately 0% of the Mortgage Loans that
are Initial Mortgage Loans were secured by second liens on the
related Mortgaged Properties.
(xii) Immediately prior to the assignment of each Mortgage
Loan to the Depositor, the Seller had good title to, and was the sole
owner of, such Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement
and each Subsequent Transfer Agreement.
(xiii) There is no delinquent tax or assessment lien
against any Mortgaged Property.
(xiv) There is no valid offset, claim, defense or
counterclaim to any Mortgage Note or Mortgage, including the
obligation of the Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note.
(xv)There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property that are or may be a
lien prior to, or equal with, the lien of such Mortgage, except those
that are insured against by the title insurance policy referred to in
item (xix) below.
(xvi) As of the Closing Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Transfer Date in the
case of the Subsequent Mortgage Loans, to the best of the Seller's
knowledge, each Mortgaged Property is free of material damage and is
in good repair.
(xvii) To the best of the Seller's knowledge, the Mortgage
Loans complied at origination in all material respects with
applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of
any such laws.
(xviii) As of the Closing Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Transfer Date in the
case of the Subsequent Mortgage Loans, neither the Seller nor any
prior holder of any Mortgage has modified the Mortgage in any
material respect (except that a Mortgage Loan may have been modified
by a written instrument that has been recorded or submitted for
recordation, if necessary, to protect the interests of the
Certificateholders and the original or a copy of which has been
delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property
in whole or in part from the lien of such
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Mortgage; or executed any instrument of release, cancellation,
modification (except as expressly permitted above) or satisfaction
with respect thereto.
(xix) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of
each Mortgage Loan, each such policy is valid and remains in full
force and effect, and each such policy was issued by a title insurer
qualified to do business in the jurisdiction where the Mortgaged
Property is located and acceptable to Xxxxxx Mae or Xxxxxxx Mac and
is in a form acceptable to Xxxxxx Mae or Xxxxxxx Mac, which policy
insures the Seller and successor owners of indebtedness secured by
the insured Mortgage, as to the first priority lien, of the Mortgage
subject to the exceptions set forth in paragraph (iv) above; to the
best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission,
anything that would impair the coverage of such mortgage title
insurance policy.
(xx)No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Closing Date and the Initial Cut-off
Date. No Subsequent Mortgage Loan was the subject of a Principal
Prepayment in full between the Subsequent Transfer Date and the
Subsequent Cut-off Date.
(xxi) To the best of the Seller's knowledge, all of the
improvements that were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(xxii) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
(xxiii) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms and under
applicable law, except that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. To the
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best of the Seller's knowledge, all parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties.
(xxiv) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder,
and any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses
incurred in making, or closing or recording the Mortgage Loans were
paid.
(xxv) The related Mortgage contains customary and
enforceable provisions that render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including, (i) in the case
of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure.
(xxvi) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Certificateholders to the trustee under the deed of
trust, except in connection with a trustee's sale after default by
the Mortgagor.
(xxvii) Each Mortgage Note and each Mortgage is in
substantially one of the forms attached hereto as Exhibit P
acceptable in form to Xxxxxx Xxx or Xxxxxxx Mac.
(xxviii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the related Mortgage Note.
(xxix) The origination, underwriting and collection
practices used by the Seller with respect to each Mortgage Loan have
been in all respects legal, prudent and customary in the mortgage
lending and servicing business.
(xxx) There is no pledged account or other security other
than real estate securing the Mortgagor's obligations.
(xxxi) No Mortgage Loan has a shared appreciation feature,
or other contingent interest feature.
(xxxii) Each Mortgage Loan contains a customary "due on
sale" clause.
(xxxiii) No more than approximately 4.13% of the Initial
Mortgage Loans are secured by two- to four-family dwellings. No more
than approximately 4.40% of the Initial Mortgage Loans are secured by
condominium units. No less than approximately 79.42%
II-19
of the Initial Mortgage Loans are secured by single family detached
dwellings. No more than approximately 1.37% of the Initial Mortgage
Loans are secured by manufactured housing. No more than approximately
10.00% of the Initial Mortgage Loans are secured by PUDs.
(xxxiv) No Initial Mortgage Loan had a principal balance in
excess of $649,123 at origination.
(xxxv) [Reserved];
(xxxvi) Each Initial Mortgage Loan was originated in or
after May 18, 2000;
(xxxvii) Each Initial Mortgage Loan that is an Adjustable
Rate Mortgage Loan, other than a 2/28 or 3/27 Mortgage Loan, had an
initial Adjustment Date no later than May 30, 2002; each 2/28
Mortgage Loan that is an Initial Mortgage Loan had an initial
Adjustment Date no later than August 1, 2003; each 3/27 Mortgage Loan
that is an Initial Mortgage Loan had an initial Adjustment Date no
later than August 23, 2004.
(xxxviii) [Reserved]
(xxxix) Approximately 90.43% of the Initial Mortgage Loans
provide for a prepayment penalty.
(xl)[Reserved]
(xli) On the basis of representations made by the Mortgagors
in their loan applications, no more than approximately 4.74% of the
Initial Mortgage Loans are secured by investor properties, and no
less than approximately 94.67% of the owner-occupied Mortgage Loans
that are Initial Mortgage Loans are secured by owner-occupied
Mortgaged Properties that are primary residences.
(xlii) At the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides
for fire and extended coverage and coverage for such other hazards as
are customary in the area where the Mortgaged Property is located in
an amount that is at least equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan or
(ii) the greater of (a) the outstanding principal balance of the
Mortgage Loan and (b) an amount such that the proceeds of such policy
shall be sufficient to prevent the Mortgagor and/or the mortgagee
from becoming a co-insurer. If the Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. All such individual
insurance policies and all flood policies referred to in item (xliv)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such
II-20
insurance, including flood insurance, at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor.
(xliii) If the Mortgaged Property is in an area identified
in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood
Insurance Administration is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount
representing coverage not less than the least of (A) the original
outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement
cost basis, or (C) the maximum amount of insurance that is available
under the Flood Disaster Protection Act of 1973, as amended.
(xliv) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the total or partial
condemnation of the Mortgaged Property.
(xlv) There is no material monetary default existing under
any Mortgage or the related Mortgage Note and, to the best of the
Seller's knowledge, there is no material event that, with the passage
of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration under the Mortgage or the related Mortgage Note; and the
Seller has not waived any default, breach, violation or event of
acceleration.
(xlvi) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of the Seller's knowledge, no
Mortgaged Property includes a cooperative, and no improvement to a
Mortgaged Property includes mobile homes or constitutes other than
real property under state law.
(xlvii) Each Mortgage Loan is being serviced by the Master
Servicer, or, if a Mortgage Loan is being serviced by the originator
of such Mortgage Loan, the Master Servicer and the originator have
agreed to transfer the servicing of such Mortgage Loan within 120
days of the Closing Date.
(xlviii) Any future advances made prior to the Cut-off Date
have been consolidated with the outstanding principal amount secured
by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on
the Mortgage Loan Schedule. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan. The
Mortgage Note does not permit or obligate the Master Servicer to make
future advances to the Mortgagor at the option of the Mortgagor.
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(xlix) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents that previously became due and owing have been paid, or
an escrow of funds has been established in an amount sufficient to
pay for every such item that remains unpaid and that has been
assessed, but is not yet due and payable. Except for (A) payments in
the nature of escrow payments, and (B) interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage
proceeds, whichever is later, to the day that precedes by one month
the Due Date of the first installment of principal and interest,
including without limitation, taxes and insurance payments, the
Master Servicer has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage.
(l) The Mortgage Loans were underwritten in all material
respects in accordance with customary and prudent underwriting
guidelines generally used by originators of B and C quality mortgage
loans.
(li)Prior to the approval of the Mortgage Loan application,
an appraisal of the related Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any
loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan; such
appraisal is in a form acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
(lii) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and no Mortgage Loan
is subject to a buydown or similar arrangement.
(liii) The Mortgage Rates borne by the Initial Mortgage
Loans as of the Initial Cut-off Date ranged from 6.490% per annum to
15.000% per annum and the weighted average Mortgage Rate as of the
Cut-off Date was 9.251% per annum.
(liv) [Reserved]
(lv)The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Seller's
portfolio at the Closing Date or Subsequent Transfer Date, as
applicable, as to which the representations and warranties made as to
the Mortgage Loans set forth in this Section 2.03(b) can be made. No
selection was made in a manner that would adversely affect the
interests of Certificateholders.
(lvi) The Gross Margins on the Adjustable Rate Mortgage
Loans that are Initial Mortgage Loans range from approximately 2.610%
to 11.270% and the weighted average Gross Margin was approximately
6.194%.
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(lvii) Except for 1 Initial Mortgage Loan representing
approximately 0.027% of the Initial Mortgage Loans (by Stated
Principal Balance as of the Initial Cut-Off Date), each Initial
Mortgage Loan has a payment date on or before the Due Date in the
month of the first Distribution Date.
(lviii) The Mortgage Loans, individually and in the
aggregate, conform in all material respects to the descriptions
thereof in the Prospectus Supplement.
(lix) [Reserved]
(lx)There is no obligation on the part of the Seller under
the terms of the Mortgage or related Mortgage Note to make payments
in addition to those made by the Mortgagor.
(lxi) Any leasehold estate securing a Mortgage Loan has a
term of not less than five years in excess of the term of the related
Mortgage Loan.
(lxii) [Reserved]
(lxiii) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without
regard to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that
treats a defective obligation as a qualified mortgage, or any
substantially similar successor provision) and applicable Treasury
regulations promulgated thereunder.
(lxiv) No Mortgage Loan was either a "consumer credit
contract" or a "purchase money loan" as such terms are defined in 16
C.F.R. Section 433 nor is any Mortgage Loan a "mortgage" as defined
in 15 U.S.C. ss. 1602(aa).
(lxv) Approximately 97.401% of the Initial Mortgage Loans
will be insured under the MGIC Policy.
(c) Upon discovery by any of the parties hereto of a breach
of a representation or warranty set forth in Section 2.03(a) or (b) or a
breach of representation and warranty with respect to Subsequent Mortgage Loan
under Section 2.01(d)(iv), that materially and adversely affects the interests
of the Certificateholders in any Mortgage Loan, the party discovering such
breach shall give prompt notice thereof to the other parties. Each of the
Master Servicer and the Seller (each, a "Representing Party") hereby covenants
with respect to the representations and warranties set forth in Sections
2.03(a) and (b) and with respect to a breach of representations and warranties
with respect to Subsequent Mortgage Loan under Section 2.01(d)(iv),
respectively, that within 90 days of the earlier of the discovery by such
Representing Party or receipt of written notice by such Representing Party
from any party of a breach of any representation or warranty set forth herein
made that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects and, if such breach is not so cured, shall, (i) if such
90-day period expires prior to the
II-23
second anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Fund and substitute in its place a Replacement
Mortgage Loan, in the manner and subject to the conditions set forth in this
Section; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans from
the Trustee at the Purchase Price in the manner set forth below; provided that
any such substitution pursuant to (i) above or repurchase pursuant to (ii)
above shall not be effected prior to the delivery to the Trustee of the Opinion
of Counsel required by Section 2.05 hereof and any such substitution pursuant
to (i) above shall not be effected prior to the additional delivery to the
Trustee of a Request for Release substantially in the form of Exhibit M. Any
Representing Party liable for a breach under this Section 2.03 shall promptly
reimburse the Master Servicer and the Trustee for any expenses reasonably
incurred by the Master Servicer or the Trustee in respect of enforcing
the remedies for such breach. To enable the Master Servicer to amend the
Mortgage Loan Schedule, any Representing Party liable for a breach under
this Section 2.03 shall, unless it cures such breach in a timely fashion
pursuant to this Section 2.03, promptly notify the Master Servicer whether
such Representing Party intends either to repurchase, or to substitute for,
the Mortgage Loan affected by such breach. With respect to the representations
and warranties described in this Section that are made to the best of the
Representing Party's knowledge, if it is discovered by any of the Depositor,
the Master Servicer, the Seller or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, notwithstanding the
Representing Party's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders the related Mortgage Note, Mortgage
and assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to
the Distribution Date on which such proceeds are to be distributed shall not
be part of the Trust Fund and will be retained by the Seller delivering such
Replacement Loan on such Distribution Date. For the month of substitution,
distributions to Certificateholders will include the Scheduled Payment due on
any Deleted Mortgage Loan for the related Due Period and thereafter the Seller
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Master Servicer shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans
and the Master Servicer shall deliver the amended Mortgage Loan Schedule to
the Trustee. Upon such substitution, the Replacement Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
Seller delivering such Replacement Mortgage Loan shall be deemed to have made
with respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 2.03(b)
with respect to such Mortgage Loan. Upon any such substitution and the deposit
to the Certificate Account of the amount required to be deposited therein in
connection
II-24
with such substitution as described in the following paragraph, the
Co-Trustee shall release to the Representing Party the Mortgage File relating
to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and shall execute and deliver at the Master Servicer's
direction such instruments of transfer or assignment as have been prepared by
the Master Servicer, in each case without recourse, as shall be necessary to
vest in the Seller, or its respective designee, title to the Trustee's
interest in any Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution
is less than the Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due (in the case of Actuarial Mortgage Loans)
in the month of substitution) of all such Deleted Mortgage Loans. An amount
equal to the aggregate of the deficiencies described in the preceding sentence
(such amount, the "Substitution Adjustment Amount") shall be deposited into
the Certificate Account by the Seller delivering such Replacement Mortgage
Loan on the Determination Date for the Distribution Date relating to the
Prepayment Period during which the related Mortgage Loan became required to be
purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate
Account pursuant to Section 3.08 on the Determination Date for the
Distribution Date in the month following the month during which such Seller
became obligated to repurchase or replace such Mortgage Loan and upon such
deposit of the Purchase Price, the delivery of the Opinion of Counsel required
by Section 2.05, if any, and the receipt of a Request for Release in the form
of Exhibit N hereto, the Co-Trustee shall release the related Mortgage File
held for the benefit of the Certificateholders to such Seller, and the Trustee
shall execute and deliver at such Person's direction the related instruments
of transfer or assignment prepared by such Seller, in each case without
recourse, as shall be necessary to transfer title from the Trustee for the
benefit of the Certificateholders and transfer the Trustee's interest to such
Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Seller
to cure, repurchase or replace any Mortgage Loan as to which a breach has
occurred and is continuing shall constitute the sole remedy against the Seller
respecting such breach available to Certificateholders, the Depositor or the
Trustee.
(d) The representations and warranties set forth in Section
2.03 hereof shall survive delivery of the respective Mortgage Files to the
Co-Trustee for the benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the
Depositor.
The Depositor hereby represents and warrants to the Master
Servicer and the Trustee as follows, as of the date hereof and as of each
Subsequent Transfer Date:
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(i) The Depositor is duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware and has full power and authority (corporate and other)
necessary to own or hold its properties and to conduct its business
as now conducted by it and to enter into and perform its obligations
under this Agreement and each Subsequent Transfer Agreement.
(ii)The Depositor has the full corporate power and authority
to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and each Subsequent
Transfer Agreement and has duly authorized, by all necessary
corporate action on its part, the execution, delivery and performance
of this Agreement and each Subsequent Transfer Agreement; and this
Agreement and each Subsequent Transfer Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors' rights generally and (ii) general principles of equity,
regardless of whether enforcement is sought in a proceeding in equity
or at law.
(iii) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by the Depositor, the consummation of
the transactions contemplated by this Agreement and each Subsequent
Transfer Agreement, and the fulfillment of or compliance with the
terms hereof and thereof are in the ordinary course of business of
the Depositor and will not (A) result in a material breach of any
term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which the Depositor is
a party or by which it may be bound or (C) constitute a material
violation of any statute, order or regulation applicable to the
Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Depositor's
ability to perform or meet any of its obligations under this
Agreement and each Subsequent Transfer Agreement.
(iv)No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or any Subsequent Transfer Agreement
or the ability of the Depositor to perform its obligations under this
Agreement or any Subsequent Transfer Agreement in accordance with the
terms hereof.
(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Depositor of, or compliance by the
Depositor with, this Agreement or any Subsequent Transfer
II-26
Agreement or the consummation of the transactions contemplated hereby,
or if any such consent, approval, authorization or order is required,
the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee
with respect to each Mortgage Loan as of the Closing Date or the related
Subsequent Transfer Date, as applicable, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the
Initial Mortgage Loans or related Subsequent Mortgage Loans, as applicable,
and the related Mortgage Notes were subject to no offsets, claims, defenses or
counterclaims.
It is understood and agreed that the representations and
warranties set forth in the two immediately preceding paragraphs shall survive
delivery of the Mortgage Files to the Co-Trustee. Upon discovery by the
Depositor or the Trustee of a breach of any of the foregoing representations
and warranties set forth in the immediately preceding paragraph (referred to
herein as a "breach"), which breach materially and adversely affects the
interest of the Certificateholders, the party discovering such breach shall
give prompt written notice to the others and to each Rating Agency. The
Depositor hereby covenants with respect to the representations and warranties
made by it in this Section 2.04 that within 90 days of the earlier of the
discovery it or receipt of written notice by it from any party of a breach of
any representation or warranty set forth herein made that materially and
adversely affects the interests of the Certificateholders in any Mortgage
Loan, it shall cure such breach in all material respects and, if such breach
is not so cured, shall repurchase or replace the affected Mortgage Loan or
Loans in accordance with the procedure set forth in Section 2.03(c).
Section 2.05. Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage Loan that is not in default or as to
which default is not imminent, no repurchase or substitution pursuant to
Sections 2.02, 2.03 or 2.04 shall be made unless the Representing Party making
such repurchase or substitution delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of the Trust Fund or contributions after the Closing Date, as defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding. Any Mortgage Loan as to which repurchase or substitution was
delayed pursuant to this paragraph shall be repurchased or the substitution
therefor shall occur (subject to compliance with Sections 2.02, 2.03 or 2.04)
upon the earlier of (a) the occurrence of a default or imminent default with
respect to such loan and (b) receipt by the Trustee of an Opinion of Counsel
to the effect that such repurchase or substitution, as applicable, will not
result in the events described in clause (i) or clause (ii) of the preceding
sentence.
(b) Upon discovery by the Depositor, the Seller, the Master
Servicer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of section 860G(a)(3) of the Code, the
party discovering such fact shall promptly (and in any event within 5 Business
Days of discovery) give written notice thereof to the other parties. In
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connection therewith, the Trustee shall require the Seller, at the Seller's
option, to either (i) substitute, if the conditions in Section 2.03(b) with
respect to substitutions are satisfied, a Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
90 days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto
in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
Section 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it
of the Trust Fund and, concurrently with such transfer and assignment, has
executed, authenticated and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership
of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
Section 2.07. Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and
the Trustee as follows:
(a) the Master Servicer shall comply in the
performance of its obligations under this Agreement with all
reasonable rules and requirements of the insurer under each Required
Insurance Policy; and
(b) no written information, certificate of an
officer, statement furnished in writing or written report delivered
to the Depositor, any affiliate of the Depositor or the Trustee and
prepared by the Master Servicer pursuant to this Agreement will
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the information, certificate,
statement or report not misleading.
Section 2.08. Seller Loss Coverage Obligation.
The Seller hereby agrees that, for the benefit of the
Certificateholders, on the Business Day immediately preceding each
Distribution Date it will remit to the Trustee for deposit into the
Distribution Account the amount of any Enhancement Payment due for such
Distribution Date as specified in the remittance report delivered by the
Master Servicer. The obligation of the Seller to remit Enhancement Payments
will terminate when the Seller Loss Coverage Amount has been reduced to zero.
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ARTICLE III.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with
customary and usual standards of practice of prudent mortgage loan lenders in
the respective states in which the Mortgaged Properties are located. In
connection with such servicing and administration, the Master Servicer shall
have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, subject to the terms hereof (i) to execute
and deliver, on behalf of the Certificateholders and the Trustee, customary
consents or waivers and other instruments and documents, (ii) to consent to
transfers of any Mortgaged Property and assumptions of the Mortgage Notes and
related Mortgages (but only in the manner provided in this Agreement), (iii)
to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv)
subject to Section 3.12(a), to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan; provided
that the Master Servicer shall take no action that is inconsistent with or
prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan or the rights and interests of the Depositor and the Trustee
under this Agreement. The Master Servicer shall represent and protect the
interest of the Trust Fund in the same manner as it currently protects its own
interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan and shall not make or permit any
modification, waiver or amendment of any term of any Mortgage Loan which would
cause the Trust Fund to fail to qualify as a REMIC or result in the imposition
of any tax under Section 860(a) or 860(d) of the Code, but in any case not in
any manner that is a lesser standard than that provided in the first sentence
of this Section 3.01. Without limiting the generality of the foregoing, the
Master Servicer, in its own name or in the name of the Depositor and the
Trustee, is hereby authorized and empowered by the Depositor and the Trustee,
when the Master Servicer believes it appropriate in its reasonable judgment,
to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect
to the Mortgaged Properties held for the benefit of the Certificateholders.
The Master Servicer shall prepare and deliver to the Depositor and/or the
Trustee such documents requiring execution and delivery by any or all of them
as are necessary or appropriate to enable the Master Servicer to service and
administer the Mortgage Loans. Upon receipt of such documents, the Depositor
and/or the Trustee shall execute such documents and deliver them to the Master
Servicer. The Master Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name
or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment
to register any Mortgage Loan on the MERS(R) System, or cause the removal from
the registration of any Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Trustee and the Certificateholders or
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any of them, any and all instruments of assignment and other comparable
instruments with respect to such assignment or re-recording of a Mortgage in
the name of MERS, solely as nominee for the Trustee and its successors and
assigns.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary
for the purpose of effecting the payment of taxes and assessments on the
Mortgaged Properties, which advances shall be reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section
3.06, and further as provided in Section 3.08. All costs incurred by the
Master Servicer, if any, in effecting the timely payments of taxes and
assessments on the Mortgaged Properties and related insurance premiums shall
not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balance under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
permit.
The Master Servicer shall deliver a list of Servicing
Officers to the Trustee by the Closing Date.
Section 3.02. Subservicing; Enforcement of the Obligations
of Master Servicer.
(a) The Master Servicer may arrange for the subservicing of
any Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer
or a subservicer or reference to actions taken through a Master Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from
the subservicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. Every subservicing agreement entered into by the Master Servicer shall
contain a provision giving the successor Master Servicer the option to
terminate such agreement in the event a successor Master Servicer is
appointed. All actions of each subservicer performed pursuant to the related
subservicing agreement shall be performed as an agent of the Master Servicer
with the same force and effect as if performed directly by the Master
Servicer.
(b) For purposes of this Agreement, the Master Servicer
shall be deemed to have received any collections, recoveries or payments with
respect to the Mortgage Loans that are received by a subservicer regardless of
whether such payments are remitted by the subservicer to the Master Servicer.
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Section 3.03. Rights of the Depositor, the Trustee in
Respect of the Master Servicer.
Neither the Trustee nor the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise.
Section 3.04. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason
no longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except
that the Trustee shall not be (i) liable for losses of the Master Servicer
pursuant to Section 3.10 hereof or any acts or omissions of the predecessor
Master Servicer hereunder, (ii) obligated to make Advances if it is prohibited
from doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02
or 2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant
to Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of
Section 6.02 hereof). If the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default), the Trustee
(or any other successor servicer) may, at its option, succeed to any rights
and obligations of the Master Servicer under any subservicing agreement in
accordance with the terms thereof; provided that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in
its capacity as servicer under a subservicing agreement arising prior to the
date of such succession unless it expressly elects to succeed to the rights
and obligations of the Master Servicer thereunder; and the Master Servicer
shall not thereby be relieved of any liability or obligations under the
subservicing agreement arising prior to the date of such succession.
The Master Servicer shall, upon request of the Trustee, but
at the expense of the Master Servicer, deliver to the assuming party all
documents and records relating to each subservicing agreement and the Mortgage
Loans then being serviced thereunder and an accounting of amounts collected
held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the subservicing agreement to the assuming party.
Section 3.05. Collection of Mortgage Loan Payments;
Certificate Account; Distribution Account;
Pre-Funding Account; Capitalized Interest
Account.
(a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located
to collect all payments called for under the terms and provisions of the
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance
Policy. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge
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or any prepayment charge or penalty interest in connection with the prepayment
of a Mortgage Loan and (ii) extend the due dates for payments due on a Mortgage
Note for a period not greater than 270 days. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan during the scheduled period in accordance with the amortization schedule
of such Mortgage Loan without modification thereof by reason of such
arrangements. The Master Servicer shall not be required to institute or join
in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law.
(b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to
be deposited on a daily basis within two Business Days of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and
interest due on the Mortgage Loans before the Cut-off Date) and the following
amounts required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans net of the related Servicing Fee permitted under Section 3.15,
other than interest accrued on the Mortgage Loans prior to the
Cut-off Date, and the Initial Certificate Account Deposit;
(iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Master Servicer's
normal servicing procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(e) in connection with any
losses on Permitted Investments;
(vi) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment
Amount;
(viii) all Advances made by the Master Servicer pursuant
to Section 4.01; and
(ix) any other amounts required to be deposited hereunder.
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The foregoing requirements for remittance by the Master
Servicer into the Certificate Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of prepayment penalties, late payment charges or assumption fees,
if collected, need not be remitted by the Master Servicer. In the event that
the Master Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the institution maintaining the Certificate Account,
to withdraw such amount from the Certificate Account, any provision herein to
the contrary notwithstanding. Such withdrawal or direction may be accomplished
by delivering written notice thereof to the institution maintaining the
Certificate Account, that describes the amounts deposited in error in the
Certificate Account. The Master Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited
in the Certificate Account shall be held in trust for the Certificateholders
until withdrawn in accordance with Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of
the Certificateholders, the Distribution Account. The Trustee shall, promptly
upon receipt, deposit in the Distribution Account and retain therein the
following:
(i) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a);
(ii) any Enhancement Payment made by the Seller;
(iii) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments;
(iv) any amounts required to be withdrawn from the
Capitalized Interest Account;
(v) the unused Pre-Funding Amount; and
(vi) any amounts received under the Cap Contract, including
amounts, if any, received by the Master Servicer as provided in
Section 3.19.
The foregoing requirements for remittance by the Master
Servicer and deposit by the Trustee into the Distribution Account shall be
exclusive. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering a written
notice to the Trustee that describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08.
In no event shall the Trustee incur liability for withdrawals from the
Distribution Account at the direction of the Master Servicer.
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(d) The Trustee shall establish and maintain, on behalf of
the Certificateholders, the Pre-Funding Account. On the Closing Date the
Seller shall remit the Pre-Funded Amount to the Trustee for deposit in the
Pre-Funding Account.
On each Subsequent Transfer Date, upon satisfaction of the
conditions in Section 2.01(e), the Trustee shall withdraw from the Pre-Funding
Account 100% of the aggregate of the Cut-off Date Principal Balances of the
Subsequent Mortgage Loans sold to the Trust Fund on the Subsequent Transfer
Date and pay that amount to the order of the Seller.
On the Business Day before the Distribution Date following
the Due Period in which the Funding Period ends, the Trustee shall (i)
withdraw the Unused Pre-Funded Amount from the Pre-Funding Account, (ii)
promptly deposit such amount in the Distribution Account, and (iii) distribute
such amount to the Certificates on the Distribution Date pursuant to Section
4.04 .
The amount deposited in the Distribution Account pursuant to
the preceding paragraph shall be net of any investment earnings on the amounts
on deposit in the Pre-Funding Account.
The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Capitalized Interest Account in the name of the Trustee.
On the Closing Date, the Seller shall deposit into the Capitalized Interest
Account $1,398,271.80. The Capitalized Interest Account shall be treated as an
"outside reserve fund" under applicable Treasury regulations and shall not be
part of the REMIC. Any investment earnings on the Capitalized Interest Account
shall be treated as owned by the Seller and will be taxable to the Seller.
On the Business Day before each Distribution Date, through
the Distribution Date following the Due Period in which the Funding Period
ends, the Trustee shall transfer from the Capitalized Interest Account to the
Distribution Account the Capitalized Interest Requirement and shall distribute
such amount to the Certificates on the Distribution Date pursuant to Section
4.04. To the extent that the Capitalized Interest Requirement on any
Distribution Date exceeds the amounts on deposit in the related Capitalized
Interest Account, the Trustee shall transfer to the Distribution Account, to
the extent of the shortfall in the Capitalized Interest Requirement, the
investment earnings on the amounts on deposit in the Capitalized Interest
Account and the Pre-Funding Account. The remaining investment earnings on
deposit in the Capitalized Interest Account and the Pre-Funding Account shall
be transferred to the Seller.
All amounts remaining in the Capitalized Interest Account
and any investment earnings remaining in the Pre-Funding Account on the
Distribution Date following the Due Period in which the Funding Period ends
shall be transferred to the Seller.
(e) Each institution that maintains the Certificate Account,
the Distribution Account, the Pre-Funding Account or the Capitalized Interest
Account shall invest the funds in each such account, as directed by the Master
Servicer, in Permitted Investments, which shall mature not later than (x) in
the case of the Certificate Account, the second Business Day next
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preceding the related Distribution Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
Certificate Account, then such Permitted Investment shall mature not later
than the Business Day next preceding such Distribution Account Deposit Date)
and (y) in the case of the Distribution Account, the Pre-Funding Account, the
Capitalized Interest Account and the Carryover Reserve Fund, the Business Day
immediately preceding the first Distribution Date that follows the date of
such investment (except that if such Permitted Investment is an obligation of
the institution that maintains such Distribution Account, the Pre-Funding
Account, the Capitalized Interest Account or the Carryover Reserve Fund, then
such Permitted Investment shall mature not later than such Distribution Date),
in each case, shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders, except in connection with Permitted
Investments made with respect to funds in the Carryover Reserve Fund which
shall be made in the name of the Trustee, for the benefit of the Class A-IO
Certificateholders. In the case of (i) the Certificate Account and the
Distribution Account, all income and gain net of any losses realized from any
such investment shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided herein, (ii) the
Pre-Funding Account and the Capitalized Interest Account, all income and gain
net of any losses realized from any such investment shall be for the benefit
of the Seller and shall be remitted to the Seller as provided herein, and
(iii) the Carryover Reserve Fund, all income and gain net of any losses
realized from any such investment shall be for the benefit of the Class A-IO
Certificateholders and shall be remitted to the Class A-IO Certificateholders
monthly as provided herein. The amount of any losses incurred in the
Certificate Account or the Distribution Account in respect of any such
investments shall be deposited by the Master Servicer in the Certificate
Account or paid to the Trustee for deposit into the Distribution Account out
of the Master Servicer's own funds immediately as realized. The amount of any
losses incurred in the Pre-Funding Account or the Capitalized Interest Account
in respect of any such investments shall be paid by the Seller to the Trustee
for deposit into the Pre-Funding Account or Capitalized Interest Account out
of the Seller's own funds immediately as realized. Any losses incurred in the
Carryover Reserve Fund in respect of any such investments shall be charged
against amounts on deposit in the Carryover Reserve Fund (or such investments)
immediately as realized. The Trustee shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in the Certificate Account, the Distribution Account, the Pre-Funding Account,
the Capitalized Interest Account or the Carryover Reserve Fund and made in
accordance with this Section 3.05.
(f) The Master Servicer shall give at least 30 days advance
notice to the Trustee, the Seller, each Rating Agency and the Depositor of any
proposed change of location of the Certificate Account prior to any change
thereof. The Trustee shall give at least 30 days advance notice to the Master
Servicer, the Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account, the Pre-Funding Account,
the Capitalized Interest Account or the Carryover Reserve Fund prior to any
change thereof.
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Section 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts.
To the extent required by the related Mortgage Note, the
Master Servicer shall establish and maintain one or more accounts (each, an
"Escrow Account") and deposit and retain therein all collections from the
Mortgagors (or advances by the Master Servicer) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items,
to reimburse the Master Servicer out of related collections for any payments
made pursuant to Sections 3.01 hereof (with respect to taxes and assessments
and insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account or to clear and
terminate the Escrow Account at the termination of this Agreement in
accordance with Section 9.01 hereof. The Escrow Accounts shall not be a part
of the Trust Fund.
Section 3.07. Access to Certain Documentation and
Information Regarding the Mortgage Loans.
The Master Servicer shall afford the Depositor and the
Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance policies and other matters relating
to this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Master Servicer designated by it.
Upon reasonable advance notice in writing if required by
federal regulation, the Master Servicer will provide to each Certificateholder
that is a savings and loan association, bank or insurance company certain
reports and reasonable access to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates; provided that the Master Servicer shall be
entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Master Servicer in providing such reports and access.
Section 3.08. Permitted Withdrawals from the Certificate
Account, Distribution Account and the
Carryover Reserve Fund.
(a) The Master Servicer may from time to time make
withdrawals from the Certificate Account for the following purposes:
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(i) to pay to the Master Servicer (to the extent not
previously paid to or withheld by the Master Servicer), as servicing
compensation in accordance with Section 3.15, that portion of any
payment of interest that equals the Servicing Fee for the period with
respect to which such interest payment was made, and, as additional
servicing compensation, those other amounts set forth in Section
3.15;
(ii) to reimburse the Master Servicer for Advances made by it
with respect to the Mortgage Loans, such right of reimbursement
pursuant to this subclause (ii) being limited to amounts received on
particular Mortgage Loan(s) (including, for this purpose, Liquidation
Proceeds) that represent late recoveries of payments of principal
and/or interest on such particular Mortgage Loan(s) in respect of
which any such Advance was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer from Insurance
Proceeds for Insured Expenses covered by the related Insurance
Policy;
(v) to pay the Master Servicer any unpaid Servicing Fees and
to reimburse it for any unreimbursed Servicing Advances, the Master
Servicer's right to reimbursement of Servicing Advances pursuant to
this subclause (v) with respect to any Mortgage Loan being limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds and purchase and repurchase proceeds)
that represent late recoveries of the payments for which such
advances were made pursuant to Section 3.01 or Section 3.06;
(vi) to pay to the Seller, the Depositor or the Master
Servicer, as applicable, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant
to Section 2.02, 2.03 or 3.12, all amounts received thereon and not
taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(vii) to reimburse the Seller, the Master Servicer or the
Depositor for expenses incurred by any of them in connection with the
Mortgage Loans or Certificates and reimbursable pursuant to Section
6.03 hereof provided that such amount shall only be withdrawn
following the withdrawal from the Certificate Account for deposit
into the Distribution Account pursuant to the following paragraph;
(viii) to withdraw pursuant to Section 3.05 any amount
deposited in the Certificate Account and not required to be
deposited therein; and
(ix) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
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In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount
and the Principal Remittance Amount for such Distribution Date to the extent
on deposit in the Certificate Account, and the Trustee shall deposit such
amount in the Distribution Account.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Certificate Account pursuant to subclauses
(i), (ii), (iv), (v) and (vi) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master
Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
Loan(s), and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for distribution to the Certificateholders in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of
any taxes that it is authorized to retain pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Distribution Account for the following purposes:
(i) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds
in or credited to the Distribution Account;
(ii) to pay the Co-Trustee, for payment to the Mortgage
Insurer as provided below, the MGIC Premium;
(iii) to pay the Trustee the Trustee Fee on each Distribution
Date;
(iv) to withdraw pursuant to Section 3.05 any amount deposited
in the Distribution Account and not required to be deposited therein;
and
(v) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
The Co-Trustee shall pay the MGIC Premium to the Mortgage
Insurer in accordance with the following wiring instructions: Firstar Bank,
000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, ABA #000000000 For the
Account of Mortgage Guaranty Insurance Corporation Account #112663706,
Attention: Premium Pay - 1312.
(c) The Trustee shall withdraw funds from the Carryover
Reserve Fund for distribution to the Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to retain pursuant to the last
paragraph of Section 8.11). In addition, the Trustee may from time to time
make withdrawals from the Carryover Reserve Fund for the following purposes:
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(i) to withdraw pursuant to Section 3.05 any amount deposited
in the Carryover Reserve Fund and not required to be deposited
therein; and
(ii) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09. [Reserved.]
Section 3.10. Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such policy shall be sufficient to prevent the related
Mortgagor and/or mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying endorsement
that contains, a standard mortgagee clause. The Master Servicer shall also
cause flood insurance to be maintained on property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, to the extent described
below. Pursuant to Section 3.05 hereof, any amounts collected by the Master
Servicer under any such policies (other than the amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Certificate
Account. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating monthly distributions to
the Certificateholders or remittances to the Trustee for their benefit, be
added to the principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds to the extent permitted by Section 3.08 hereof. It is
understood and agreed that no earthquake or other additional insurance is to
be required of any Mortgagor or maintained on property acquired in respect of
a Mortgage other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
If the Mortgaged Property is located at the time of origination of the
Mortgage Loan in a federally designated special flood hazard area and such
area is participating in the national flood insurance program, the Master
Servicer shall cause flood insurance to be maintained with respect to such
Mortgage Loan. Such flood insurance shall be in an amount equal to the lesser
of (i) the original principal balance of the related Mortgage Loan, (ii) the
replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a),
when any property subject to a Mortgage has been or is about to be conveyed by
the Mortgagor, the Master Servicer shall to the extent that it has knowledge
of such conveyance, enforce any due-on-sale clause
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contained in any Mortgage Note or Mortgage, to the extent permitted under
applicable law and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under any
Required Insurance Policy. Notwithstanding the foregoing, the Master Servicer
is not required to exercise such rights with respect to a Mortgage Loan if the
Person to whom the related Mortgaged Property has been conveyed or is proposed
to be conveyed satisfies the terms and conditions contained in the Mortgage
Note and Mortgage related thereto and the consent of the mortgagee under such
Mortgage Note or Mortgage is not otherwise so required under such Mortgage
Note or Mortgage as a condition to such transfer. In the event that the Master
Servicer is prohibited by law from enforcing any such due-on-sale clause, or
if coverage under any Required Insurance Policy would be adversely affected,
or if nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.11(b), to take or enter into an assumption
and modification agreement from or with the person to whom such property has
been or is about to be conveyed, pursuant to which such person becomes liable
under the Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan shall
continue to be covered (if so covered before the Master Servicer enters such
agreement) by the applicable Required Insurance Policies. The Master Servicer,
subject to Section 3.11(b), is also authorized with the prior approval of the
insurers under any Required Insurance Policies to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Mortgage Note. Notwithstanding the foregoing, the
Master Servicer shall not be deemed to be in default under this Section
3.11(a) by reason of any transfer or assumption that the Master Servicer
reasonably believes it is restricted by law from preventing.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a
Mortgagor, and such Person is to enter into an assumption agreement or
modification agreement or supplement to the Mortgage Note or Mortgage that
requires the signature of the Trustee, or if an instrument of release signed
by the Trustee is required releasing the Mortgagor from liability on the
Mortgage Loan, the Master Servicer shall prepare and deliver or cause to be
prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to
whom the Mortgaged Property is to be conveyed and such modification agreement
or supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with
any such assumption, no material term of the Mortgage Note (including, but not
limited to, the Mortgage Rate, the amount of the Scheduled Payment, the
Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin, the
Periodic Rate Cap, the Adjustment Date and any other term affecting the amount
or timing of payment on the Mortgage Loan) may be changed. In addition, the
substitute Mortgagor and the Mortgaged Property must be acceptable to the
Master Servicer in accordance with its underwriting standards as then in
effect. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Co-Trustee the original of such substitution or assumption
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agreement, which in the case of the original shall be added to the related
Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Master Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.
Section 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain
Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and
as to which no satisfactory arrangements can be made for collection of
delinquent payments. In connection with such foreclosure or other conversion,
the Master Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities and the requirements of the insurer under any
Required Insurance Policy; provided that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of
the Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Certificate Account pursuant to Section 3.08 hereof). The Master Servicer
shall be responsible for all other costs and expenses incurred by it in any
such proceedings; provided that it shall be entitled to reimbursement thereof
from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that
a Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual
capacity. The Master Servicer shall ensure that the title to such REO Property
references this Agreement and the Trustee's capacity thereunder. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself
or through an agent selected by the Master Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent
the same, or any part thereof, as the Master Servicer deems to be in the best
interest of the Master Servicer and the Certificateholders for the period
prior to the sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement
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with respect to each REO Property that has been rented showing the aggregate
rental income received and all expenses incurred in connection with the
management and maintenance of such REO Property at such times as is necessary
to enable the Trustee to comply with the reporting requirements of the REMIC
Provisions. The net monthly rental income, if any, from such REO Property
shall be deposited in the Certificate Account no later than the close of
business on each Determination Date. The Master Servicer shall perform the tax
reporting and withholding related to foreclosures, abandonments and
cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer shall dispose of such
Mortgaged Property as soon as practicable in a manner that maximizes the
Liquidation Proceeds, but in no event later than three years after its
acquisition by the Trust Fund or, at the expense of the Trust Fund, the Master
Servicer shall request, more than 60 days prior to the day on which such
three-year period would otherwise expire, an extension of the three-year grace
period. In the event the Trustee shall have been supplied with an Opinion of
Counsel (such opinion not to be an expense of the Trustee) to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund as defined in section 860F of the Code or
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding, the Trust Fund may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel) after the expiration of such three-year period. Notwithstanding any
other provision of this Agreement, no Mortgaged Property acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or otherwise used
for the production of income by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would (i) cause such Mortgaged Property
to fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition of any
federal, state or local income taxes on the income earned from such Mortgaged
Property under section 860G(c) of the Code or otherwise, unless the Master
Servicer has agreed to indemnify and hold harmless the Trust Fund with respect
to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to a determination by the Master
Servicer that the proceeds of such foreclosure would exceed the costs and
expenses of bringing such a proceeding. The income earned from the management
of any Mortgaged Properties acquired through foreclosure or other judicial
proceeding, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Servicing Fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes
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and shall be deposited into the Certificate Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial
Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage
Loan, net of any payment to the Master Servicer as provided above, shall be
deposited in the Certificate Account on the next succeeding Determination Date
following receipt thereof for distribution on the related Distribution Date,
except that any Excess Proceeds shall be retained by the Master Servicer as
additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12;
second, to reimburse the Master Servicer for any unreimbursed Advances,
pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to accrued and
unpaid interest (to the extent no Advance has been made for such amount) on
the Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due
Date occurring in the month in which such amounts are required to be
distributed; and fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Master Servicer shall
determine the respective aggregate amounts of Excess Proceeds and Realized
Losses, if any, for the related Prepayment Period.
(c) The Master Servicer, in its sole discretion, shall have
the right to elect (by written notice sent to the Trustee) to purchase for its
own account from the Trust Fund any Mortgage Loan that is 150 days or more
delinquent at a price equal to the Purchase Price; provided, however, that the
Master Servicer may only exercise this right on or before the last day of the
calendar month in which such Mortgage Loan became 150 days delinquent (such
month, the "Eligible Repurchase Month"); provided further, that any such
Mortgage Loan which becomes current but thereafter becomes delinquent may be
purchased by the Master Servicer pursuant to this Section in any ensuing
Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased
hereunder shall be delivered to the Trustee for deposit in the Certificate
Account and the Trustee, upon receipt of such deposit and a Request for
Release from the Master Servicer in the form of Exhibit N hereto, shall
release or cause to be released to the purchaser of such Mortgage Loan the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser of such Mortgage Loan, in
each case without recourse, as shall be necessary to vest in the purchaser of
such Mortgage Loan any Mortgage Loan released pursuant hereto and the
purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security
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and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
Section 3.13. Co-Trustee to Cooperate; Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Master Servicer will
promptly notify the Co-Trustee by delivering a Request for Release
substantially in the form of Exhibit N. Upon receipt of such request, the
Co-Trustee shall promptly release the related Mortgage File to the Master
Servicer, and the Co-Trustee shall at the Master Servicer's direction execute
and deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Master
Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. The Master Servicer is authorized to cause the removal
from the registration on the MERS(R) System of such Mortgage and to execute
and deliver, on behalf of the Trust Fund and the Certificateholders or any of
them, any and all instruments of satisfaction or cancellation or of partial or
full release. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account, the Distribution Account, the Carryover Reserve Fund or the related
subservicing account. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Co-Trustee shall, upon delivery to the
Co-Trustee of a Request for Release in the form of Exhibit M signed by a
Servicing Officer, release the Mortgage File to the Master Servicer. Subject
to the further limitations set forth below, the Master Servicer shall cause
the Mortgage File or documents so released to be returned to the Co-Trustee
when the need therefor by the Master Servicer no longer exists, unless the
Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Certificate Account, in which case the Co-Trustee shall deliver the Request
for Release to the Master Servicer.
If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the
documents therein that shall have been released by the Co-Trustee to be
returned to the Co-Trustee within 21 calendar days after possession thereof
shall have been released by the Co-Trustee unless (i) the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Certificate Account, and the Master Servicer
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shall have delivered to the Co-Trustee a Request for Release in the form of
Exhibit N or (ii) the Mortgage File or document shall have been delivered to an
attorney or to a public trustee or other public official as required by law
for purposes of initiating or pursuing legal action or other proceedings for
the foreclosure of the Mortgaged Property and the Master Servicer shall have
delivered to the Trustee an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery.
Section 3.14. Documents, Records and Funds in Possession of
Master Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Co-Trustee as required by this Agreement
all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise
are collected by the Master Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, the Master Servicer in respect
of any Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, including but not limited to, any funds
on deposit in the Certificate Account, shall be held by the Master Servicer
for and on behalf of the Trust Fund and shall be and remain the sole and
exclusive property of the Trust Fund, subject to the applicable provisions of
this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, Distribution Account, or Carryover Reserve Fund or in any
Escrow Account (as defined in Section 3.06), or any funds that otherwise are
or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of set off against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that
the Master Servicer shall be entitled to set off against and deduct from any
such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
Section 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain or withdraw from the Certificate Account
out of each payment of interest on a Mortgage Loan included in the Trust Fund
an amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
Additional servicing compensation in the form of Excess
Proceeds, prepayment penalties, assumption fees, late payment charges,
Prepayment Interest Excess, and all income and gain net of any losses realized
from Permitted Investments shall be retained by the Master Servicer to the
extent not required to be deposited in the Certificate Account pursuant to
Section 3.05 or 3.12(a) hereof. The Master Servicer shall be required to pay
all expenses
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incurred by it in connection with its servicing activities hereunder (including
payment of any premiums for hazard insurance, as required by Section 3.10
hereof and maintenance of the other forms of insurance coverage required by
Section 3.10 hereof) and shall not be entitled to reimbursement therefor
except as specifically provided in Sections 3.08 and 3.12 hereof.
Section 3.16. Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC
and to comparable regulatory authorities supervising Holders of the
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the Master Servicer
designated by it. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation
shall not constitute a breach of this Section.
Section 3.17. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before May 31 of each year commencing May 31, 2002, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of
the performance of the Master Servicer under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and (iii) to
the best of such officer's knowledge, each Subservicer has fulfilled all its
obligations under its Subservicing Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation specifying
each such default known to such officer and the nature and status thereof. The
Trustee shall forward a copy of each such statement to each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.
Section 3.18. Annual Independent Public Accountants'
Servicing Statement; Financial Statements.
On or before the later of (i) May 31 of each year, beginning
with May 31, 2002 or (ii) within 30 days of the issuance of the annual audited
financial statements beginning with the audit for the period ending in 2001,
the Master Servicer at its expense shall cause a nationally recognized firm of
independent public accountants (who may also render other services to the
Master Servicer, the Seller or any affiliate thereof) that is a member of the
American Institute of Certified Public Accountants to furnish a report to the
Trustee, Depositor and the Seller in compliance with the Uniform Single
Attestation Program for Mortgage Bankers. Copies of such
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report shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided such report is delivered by the
Master Servicer to the Trustee. Upon written request, the Master Servicer
shall provide to the Certificateholders its publicly available annual financial
statements (or, for so long as Countrywide Home Loans, Inc. is the Master
Servicer hereunder, the Master Servicer's parent company's publicly available
annual financial statements), if any, promptly after they become available.
Section 3.19. The Cap Contract.
The Seller shall assign all of its right, title and interest
in and to the interest rate cap transaction evidenced by the Amended
Confirmation And Agreement to, and shall cause all of its obligations in
respect of such transaction to be assumed by, the Trustee on behalf of the
Trust Fund, on the terms and conditions set forth in the Cap Contract
Assignment Agreement. The Cap Contract will be an asset of the Trust Fund but
will not be an asset of any REMIC. The Master Servicer, on behalf of the
Trustee, shall deposit any amounts received from time to time with respect to
the Cap Contract into the Distribution Account.
The Master Servicer, on behalf of the Trustee, shall prepare
and deliver any notices required to be delivered under the Cap Contract.
The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate the Cap Contract, in each case upon
the occurrence of certain events of default or termination events to the
extent specified thereunder. Upon any such termination, the Cap Contract
Counterparty will be obligated to pay the Trustee or the Master Servicer for
the benefit of the Trust Fund an amount in respect of such termination. Any
amounts received by the Trustee or the Master Servicer for the benefit of the
Trust Fund, as the case may be, in respect of such termination shall be
deposited and held in the Distribution Account to pay Net Rate Carryover for
the Certificates as provided in Section 4.04(a) on Distribution Dates
following such termination to and including the Cap Contract Termination Date.
On the Cap Contract Termination Date, after all other distributions on such
date, if any such amounts in respect of early termination remain in the
Distribution Account, such amounts shall be distributed by the Trustee to the
Seller.
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ARTICLE IV.
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.
Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the
Certificate Account no later than 1:00 p.m. Pacific time on the Master
Servicer Advance Date in immediately available funds. The Master Servicer
shall be obligated to make any such Advance only to the extent that such
advance would not be a Nonrecoverable Advance. If the Master Servicer shall
have determined that it has made a Nonrecoverable Advance or that a proposed
Advance or a lesser portion of such Advance would constitute a Nonrecoverable
Advance, the Master Servicer shall deliver (i) to the Trustee for the benefit
of the Certificateholders funds constituting the remaining portion of such
Advance, if applicable, and (ii) to the Depositor, each Rating Agency and the
Trustee an Officer's Certificate setting forth the basis for such
determination.
In lieu of making all or a portion of such Advance from its
own funds, the Master Servicer may (i) cause to be made an appropriate entry
in its records relating to the Certificate Account that any Amount Held for
Future Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required
to be distributed pursuant to this Agreement. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until such Mortgage Loan is paid in full or the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trust Fund pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01.
Section 4.02. Reduction of Servicing Compensation in
Connection with Prepayment Interest
Shortfalls.
In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Master Servicer shall, to the extent of
one-half of the Servicing Fee for such Distribution Date, deposit into the
Certificate Account, as a reduction of the Servicing Fee (but not in excess of
one-half thereof) for such Distribution Date, no later than the close of
business on the Business Day immediately preceding such Distribution Date, an
amount equal to the Prepayment Interest Shortfall; and in case of such
deposit, the Master Servicer shall not be entitled to any recovery or
reimbursement from the Depositor, the Trustee, the Trust Fund or the
Certificateholders.
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Section 4.03. [Reserved]
Section 4.04. Distributions.
(a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority (except that amounts received in
respect of the Cap Contract will be distributed as described in Section
4.04(b)):
(i) concurrently, to the Class A and Class A-IO
Certificates, the Current Interest and any Interest Carry Forward
Amount for each such Class; provided, however, that the Current
Interest and any Interest Carry Forward Amount payable to the Class
A-IO Certificates shall be deposited in the Carryover Reserve Fund in
an amount equal to the sum of the Primary Carryover Reserve Fund
Deposit and the Secondary Carryover Reserve Fund Deposit and any
amounts remaining thereafter shall be distributed to the Class A-IO
Certificates; and provided, further, that if the Interest Funds are
not sufficient to make a full distribution of the aggregate Current
Interest and the aggregate Interest Carry Forward Amount for the
Class A and Class A-IO Certificates, such Interest Funds will be
distributed pro rata among each such Class, based on the ratio of (x)
the portion of the Current Interest and the portion of any Interest
Carry Forward Amount attributable to such Class to (y) the portion of
Current Interest and the portion of any Interest Carry Forward Amount
attributable to all such Classes;
(ii) to the Class M-1 Certificates, the Current Interest and
any Interest Carry Forward Amount for such Class;
(iii) to the Class M-2 Certificates, the Current Interest and
any Interest Carry Forward Amount for such Class;
(iv) to the Class B-1 Certificates, the Current Interest and
any Interest Carry Forward Amount for such Class;
(v) to the Class B-2 Certificates, the Current Interest and
any Interest Carry Forward Amount for such Class; and
(vi) any remainder to the Class A-R Certificates.
(b) On each Distribution Date on or prior to the Cap
Contract Termination Date, amounts received in respect of the Cap Contract for
such Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each Class of Certificates (other than the Class A-R and Class
A-IO Certificates) to the extent of any Interest Carryover Amount for such
Class of Certificates for such Distribution Date on a pro rata basis among all
such Classes (on the basis of the Interest Carryover Amount for each such
Class), and any remaining amounts shall be distributed to the Seller;
provided, however, that if the Cap Contract is subject to early termination,
early termination payments shall be held by the Trustee until the Cap Contract
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Termination Date and deposited in the Carryover Reserve Fund, as necessary, to
pay any Interest Carryover Amounts as provided in Section 3.19.
(c) On each Distribution Date, after payment of the amounts
received on Cap Contract as provided in Section 4.04(b) above, amounts on
deposit in the Carryover Reserve Fund shall be allocated by the Trustee to
each Class of Certificates (other than the Class A-R and the A-IO
Certificates) to the extent of any remaining Interest Carryover Amount for
such Class of Certificates for such Distribution Date on a pro rata basis
among all such Classes (on the basis of the Interest Carryover Amount for each
such Class).
(d) On each Distribution Date, the Principal Distribution
Amount for such Distribution Date shall be allocated by the Trustee from the
Distribution Account in the following order of priority:
(i) with respect to any Distribution Date prior to the
Stepdown Date or as to which a Trigger Event is in effect:
(A) to the Class A-R Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(B) to the Class A Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(C) to the Class M-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(D) to the Class M-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(E) to the Class B-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(F) to the Class B-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(G) any remainder to the Class A-R Certificates.
(ii) with respect to each Distribution Date on and after the
Stepdown Date and as to which a Trigger Event is not in effect:
(A) to the Class A Certificates, the Class A Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
(B) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
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(C) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
(D) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
(E) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero; and
(F) any remainder to the ClassA-R Certificates.
(e) [Reserved]
(f) To the extent that a Class of Certificates (other than
the Class A-IO Certificates) receives interest in excess of the Net Rate Cap
other than the amount of any Net Rate Carryover paid from amounts received in
respect of the Cap Contract or from amounts otherwise payable to the Class
A-IO Certificates as provided in this Agreement, such interest shall be
treated as having been paid to the Carryover Reserve Fund and then paid by the
Carryover Reserve Fund to such Certificateholders. Amounts deemed deposited to
the Carryover Reserve Fund pursuant to this clause shall be deemed to have
been distributed first to the Class A-IO Certificateholders for applicable tax
purposes.
(g) [Reserved]
(h) On each Distribution Date, the Trustee shall allocate
the Applied Realized Loss Amount to reduce the Certificate Principal Balances
of the Certificates in the following order of priority:
(i) to the Class B-2 Certificates until the Class B-2
Certificate Principal Balance is reduced to zero;
(ii) to the Class B-1 Certificates until the Class B-1
Certificate Principal Balance is reduced to zero;
(iii) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero;
(iv) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero;
(v) and to the Class A Certificates until the Certificate
Principal Balance is reduced to zero.
(i) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either by
wire transfer in immediately available funds to the account of
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such holder at a bank or other entity having appropriate facilities therefor,
if (i) such Holder has so notified the Trustee at least 5 Business Days prior
to the related Record Date and (ii) such Holder shall hold Regular Certificates
with aggregate principal denominations of not less than $1,000,000 or
evidencing a Percentage Interest aggregating 10% or more with respect to such
Class or, if not, by check mailed by first class mail to such Certificateholder
at the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, but subject to Section 9.02 hereof respecting
the final distribution, distributions with respect to Certificates registered
in the name of a Depository shall be made to such Depository in immediately
available funds.
On or before 5:00 p.m. Pacific time on the fifth Business
Day following each Determination Date (but in no event later than 5:00 p.m.
Pacific time on the third Business Day before the related Distribution Date),
the Master Servicer shall deliver a report to the Trustee in the form of a
computer readable magnetic tape (or by such other means as the Master Servicer
and the Trustee may agree from time to time) containing such data and
information as agreed to by the Master Servicer and the Trustee such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and
make the required distributions for the related Distribution Date (the
"Remittance Report"). The Trustee shall, not later than 9:00 a.m. Pacific time
on the Master Servicer Advance Date, other than any Master Servicer Advance
Date relating to any Distribution Date on which the proceeds of any Optional
Termination are being distributed, (i) furnish by telecopy a statement to the
Master Servicer (the information in such statement to be made available to
Certificateholders by the Trustee on request) setting forth the Interest Funds
and Principal Funds for such Distribution Date and the amount to be withdrawn
from the Certificate Account and (ii) determine (and notify the Master
Servicer by telecopy of the results of such determination) the amount of
Advances to be made by the Master Servicer in respect of the related
Distribution Date; provided that no Advance shall be made if it would be a
Nonrecoverable Advance; provided further that any failure by the Trustee to
notify the Master Servicer will not relieve the Master Servicer from any
obligation to make any such Advances. The Trustee shall not be responsible to
recompute, recalculate or verify information provided to it by the Master
Servicer and shall be permitted to conclusively rely on any information
provided to it by the Master Servicer.
Section 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Holder of a
Class of Certificates of the Trust Fund, the Master Servicer and the Depositor
a statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of
each Class allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein and
(B) the aggregate of all scheduled payments of principal included
therein;
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
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(iii) any Interest Carry Forward Amount for each Class;
(iv) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized
Loss Amounts for such Distribution Date;
(v) the aggregate of the Stated Principal Balances of the
Mortgage Loans for the Mortgage Pool;
(vi) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
(vii) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period;
(viii) [Reserved];
(ix) the amount of Advances included in the distribution on
such Distribution Date;
(x) the cumulative amount of Applied Realized Loss Amounts
to date;
(xi) the amount of any Enhancement Payments made with respect
to such Distribution Date;
(xii) the number and aggregate principal amounts of Mortgage
Loans: (A) Delinquent (exclusive of Mortgage Loans in foreclosure)
(1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, and (B)
in foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days
and (3) 90 or more days, in each case as of the close of business on
the last day of the calendar month preceding such Distribution Date;
(xiii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan;
(xiv) and the aggregate Stated Principal Balances of any
Mortgage Loans converted to REO Properties as of the close of
business on the Determination Date preceding such Distribution Date;
(xv) the aggregate Stated Principal Balances of all Liquidated
Loans;
(xvi) with respect to any Liquidated Loan, the loan number and
Stated Principal Balance relating thereto;
(xvii) whether a Trigger Event has occurred;
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(xviii) any Net Rate Carryover paid on each Class of
Certificates (other than the Class A-IO Certificates) and any
remaining Net Rate Carryover remaining on each Class of Certificates
(other than the Class A-IO Certificates) on such Distribution Date;
(xix) [Reserved];
(xx) with respect to the September 2001 Distribution Date,
(A) the amount on deposit in the Pre-Funding Account (if any) on the
related Determination Date and (B) the aggregate Stated Principal
Balances of the Subsequent Mortgage Loans for Subsequent Transfer
Dates occurring during the related Due Period; and the amount any
Enhancement Payments for such Distribution Date and the amount
remaining under the Seller Loss Coverage Obligation;
(xxi) with respect to the October 2001 Distribution Date,
(A) the remaining amounts in Pre-Funding Account (if any) at the end
of the Funding Period that are included in the Principal Distribution
Amount and (B) the aggregate Stated Principal Balances of the
Subsequent Mortgage Loans for Subsequent Transfer Dates occurring
during the related Due Period; and the amount any Enhancement
Payments for such Distribution Date and the amount remaining under
the Seller Loss Coverage Obligation; and
(xxii) the amount, if any, received under the Cap Contract
for such Distribution Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer.
The Trustee will send a copy of each statement provided pursuant to this
Section 4.05 to each Rating Agency. The Trustee may make the above information
available to Certificateholders via the Trustee's website at
xxxx://xxx.xxxxxx.xxx.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of
this Section 4.05 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the
Trustee shall furnish to the Holders of the Class A-R Certificates the Form
1066 and each Form 1066Q and shall respond promptly to written requests made
not more frequently than quarterly by any Holder of Class A-R Certificates
with respect to the following matters:
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(i) The original projected principal and interest cash flows
on the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The projected remaining principal and interest cash
flows as of the end of any calendar quarter with respect to each
related Class of regular and residual interests created hereunder and
the Mortgage Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each related
Class of regular or residual interests created hereunder and to the
Mortgage Loans, together with each constant yield to maturity used in
computing the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of
the related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of
the related REMIC; and
(vii) Any taxes (including penalties and interest) imposed
on the related REMIC, including, without limitation, taxes on
"prohibited transactions," "contributions" or "net income from
foreclosure property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and
(iv) above shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06. [Reserved]
Section 4.07. [Reserved]
Section 4.08. Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Carryover Reserve Fund. On the Closing Date, the Seller
shall remit $10,000 to the Trustee, who shall deposit said funds in the
Carryover Reserve Fund. The Carryover Reserve Fund shall be an Eligible
Account, and funds on deposit therein shall be held separate and apart from,
and shall not be commingled with, any other moneys, including without
limitation, other moneys held by the Trustee pursuant to this Agreement.
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(b) [Reserved]
(c) The Trustee shall make withdrawals from the Carryover
Reserve Fund to make distributions pursuant to Section 4.04(a) hereof. Funds
withdrawn from the Carryover Reserve Fund may not be applied pursuant to any
other subsection of Section 4.04 other than as expressly provided for in this
Section 4.08(c).
(d) Funds in the Carryover Reserve Fund may be invested in
Permitted Investments. Any earnings on such amounts shall be payable to the
Class A-IO Certificates. The Class A-IO Certificates shall evidence ownership
of the Carryover Reserve Fund for federal tax purposes and the Holders thereof
evidencing not less than 50% of the Voting Rights of such Class shall direct
the Trustee in writing as to the investment of amounts therein. In the absence
of such written direction, all funds in the Carryover Reserve Fund shall be
invested by the Trustee in The Bank of New York cash reserves.
(e) Upon termination of the Trust Fund, any amounts
remaining in the Carryover Reserve Fund shall be distributed to the Holders of
the Class A-IO Certificates in the same manner as if distributed pursuant to
Section 4.04(f) hereof.
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ARTICLE V.
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates shall be substantially in the forms
attached hereto as Exhibits A-1 through A-6, D and E. The Certificates shall
be issuable in registered form, in the minimum dollar denominations, integral
dollar multiples in excess thereof and aggregate dollar denominations as set
forth in the following table:
Integral Original
Multiples Certificate
Minimum in Excess of Principal
Class Denomination Minimum Balance
------------------ ---------------------- -------------------------------- --------------------------------
A $20,000 $20,000 $ 370,000,000
A-IO $20,000(1) $ 1,000(1) $4000,000,100(2)
A-R $ 99.95(2) N/A $ 100
M-1 $20,000 $ 1,000 $ 10,000,000
M-2 $20,000 $ 1,000 $ 8,000,000
B-1 $20,000 $ 1,000 $ 4,000,000
B-2 $20,000 $ 1,000 $ 8,000,000
(1) Notional Amount.
(2) The Tax Matters Person Class A-R Certificate may be issued in a
denomination of $0.05.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the
time when such signatures were affixed, authorized to sign on behalf of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
authentication and delivery. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form set
forth as attached hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication. On the Closing Date, the Trustee shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
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Section 5.02. Certificate Register; Registration
of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration
of Transfer of any Certificate, the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made
for any registration of Transfer or exchange of Certificates, but payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No Transfer of an ERISA-Restricted Certificate shall be
made unless the Trustee shall have received either (i) a representation from
the transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, or a Person acting on behalf of any such plan or
using the assets of any such plan, or (ii) in the case of an ERISA-Restricted
Certificate that has been the subject of an ERISA-Qualifying Underwriting, if
the purchaser is an insurance company, a representation that the purchaser is
an insurance company which is purchasing such Certificates with funds
contained in an "insurance company general account" (as such term is defined
in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under Sections I and III of PTCE 95-60 or (iii) in the case of any such
ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or a plan subject to Section 4975 of
the Code (or comparable provisions of any subsequent enactments), or a trustee
of any such plan or any other person acting on behalf of any such plan, an
opinion of counsel satisfactory to the Trustee and
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the Master Servicer to the effect that the purchase or holding of such ERISA
Restricted Certificate will not result in the assets of the Trust Fund being
deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee or the
Master Servicer to any obligation in addition to those expressly undertaken in
this Agreement, which opinion of counsel shall not be an expense of the
Trustee or the Master Servicer. For purposes of clauses (i) and (ii) of the
preceding sentence, such representation shall be deemed to have been made to
the Trustee by the transferee's acceptance of an ERISA Restricted Certificate
(or the acceptance by a Certificate Owner of the beneficial interest in any
such Class of ERISA Restricted Certificates) that is a Book-Entry Certificate
unless the Trustee shall have received from the transferee an alternative
representation acceptable in form and substance to the Master Servicer and the
Depositor. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA Restricted Certificate to or on behalf of an employee
benefit plan subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code without the delivery to the Trustee and the Master Servicer of an
opinion of counsel satisfactory to the Trustee and the Master Servicer as
described above shall be void and of no effect; provided that the restriction
set forth in this sentence shall not be applicable if there has been delivered
to the Trustee and the Master Servicer an opinion of counsel meeting the
requirements of clause (iii) of the first sentence of this paragraph. The
Trustee shall be under no liability to any Person for any registration of
transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 5.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Trustee, with respect to the
transfer of such Classes of Certificates, required delivery of such
certificates and other documentation or evidence as are expressly required by
the terms of this Agreement and examined such certificates and other
documentation or evidence to determine compliance as to form with the express
requirements hereof. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA Restricted Certificate that was in fact
an employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a Person acting on behalf of any such plan at the
time it became a Holder or, at such subsequent time as it became such a plan
or Person acting on behalf of such a plan, all payments made on such ERISA
Restricted Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Holder of such Certificate that is not such a plan or Person
acting on behalf of a plan.
(c) Each Person who has or who acquires any Ownership
Interest in a Class A-R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Class A-R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest
in a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
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(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, the Trustee shall have been furnished with an affidavit (a
"Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall agree (A) to obtain a
Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer
of a Class A-R Certificate and (C) not to Transfer its Ownership
Interest in a Class A-R Certificate or to cause the Transfer of an
Ownership Interest in a Class A-R Certificate to any other Person if
it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person
for any registration of Transfer of a Class A-R Certificate that is
in fact not permitted by Section 5.02(b) and this Section 5.02(c) or
for making any payments due on such Certificate to the Holder thereof
or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to
recover from any Holder of a Class A-R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class A-R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee
of such Certificate.
(v) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section
860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Class A-R Certificate to any Holder who is not a
Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable
portions of the legend on a Class A-R Certificate may be deleted) with respect
to Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Seller or
the Master Servicer to the effect that the elimination of such restrictions
will not cause the Trust Fund to fail to qualify as a REMIC at any time that
the Certificates are outstanding or
V-4
result in the imposition of any tax on the Trust Fund, a Certificateholder or
another Person. Each Person holding or acquiring any ownership Interest in a
Class A-R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Trustee, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial
interest in, a Class A-R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class A-R Certificate that is held by
a Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 shall not be an expense of the
Trust Fund, the Trustee, the Depositor, the Seller or the Master Servicer.
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Master Servicer and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Trustee that such Certificate has been acquired
by a bona fide purchaser, the Trustee shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest.
In connection with the issuance of any new Certificate under this Section
5.03, the Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates surrendered to the
Trustee under the terms of this Section 5.03 shall be canceled and destroyed
by the Trustee in accordance with its standard procedures without liability on
its part.
Section 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the
contrary.
Section 5.05. Access to List of Certificateholders' Names
and Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and
(c) provide a copy of the communication that such Certificateholders propose
to transmit or if the
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Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree
that the Trustee shall not be held accountable by reason of the disclosure of
any such information as to the list of the Certificateholders hereunder,
regardless of the source from which such information was derived.
Section 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be
issued in the form of one or more typewritten Certificates representing the
Book-Entry Certificates, to be delivered to the Depository by or on behalf of
the Depositor. Such Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of such Certificates will receive a definitive certificate
representing such Certificate Owner's interest in such Certificates, except as
provided in Section 5.08. Unless and until definitive, fully registered
Certificates ("Definitive Certificates") have been issued to the Certificate
Owners of such Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force
and effect;
(b) the Depositor, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of
the respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants
and receive and transmit distributions of principal and interest on the
related Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions of this
Section shall control.
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For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may
be given by Certificate Owners (acting through the Depository and the
Depository Participants) owning Book-Entry Certificates evidencing the
requisite percentage of principal amount of such Class of Certificates.
Section 5.07. Notices to Depository.
Whenever any notice or other communication is required to be
given to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.
Section 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an
Event of Default, Certificate Owners of such Book-Entry Certificates having
not less than 51% of the Voting Rights evidenced by any Class of Book-Entry
Certificates advise the Trustee and the Depository in writing through the
Depository Participants that the continuation of a book-entry system with
respect to Certificates of such Class through the Depository (or its
successor) is no longer in the best interests of the Certificate Owners of
such Class, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Depository, of the occurrence of any such event and
of the availability of Definitive Certificates to Certificate Owners of such
Class requesting the same. The Depositor shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon surrender to the Trustee of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall authenticate and deliver
such Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and each may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of such Definitive Certificates, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 5.09. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for
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registration of transfer or exchange. The Trustee initially designates its
offices at 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or
agency.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01. Respective Liabilities of the Depositor, the
Master Servicer and the Seller.
The Depositor, the Master Servicer and the Seller shall each
be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
Section 6.02. Merger or Consolidation of the Depositor, the
Master Servicer or the Seller.
The Depositor, the Master Servicer and the Seller will each
keep in full effect its existence, rights and franchises as a corporation
under the laws of the United States or under the laws of one of the States
thereof and will each obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement, or any of the Mortgage Loans and to perform its respective duties
under this Agreement.
Any Person into which the Depositor, the Master Servicer or
the Seller may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer or the
Seller shall be a party, or any person succeeding to the business of the
Depositor, the Master Servicer or the Seller, shall be the successor of the
Depositor, the Master Servicer or the Seller, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided that the successor or surviving Person to the Master Servicer shall
be qualified to sell mortgage loans to, and to service mortgage loans on
behalf of, Xxxxxx Mae or Xxxxxxx Mac.
Section 6.03. Limitation on Liability of the Depositor, the
Seller, the Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or
any of the directors, officers, employees or agents of the Depositor, the
Seller or the Master Servicer shall be under any liability to the Trust Fund
or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; provided that this provision shall not protect the Depositor, the
Seller, the Master Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Seller, the Master Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Seller, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Master Servicer may rely in good faith on any document of any
kind
VI-1
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor, the Seller, the Master Servicer and
any director, officer, employee or agent of the Depositor, the Seller or the
Master Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, the
Seller or the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided that any of the Depositor, the Seller or the Master
Servicer may, in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties
of the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be, expenses, costs and liabilities of the
Trust Fund, and the Depositor, the Seller and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account as provided
by Section 3.08 hereof.
Section 6.04. Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations
and duties hereby imposed on it except upon determination that its duties
hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until the Trustee or a successor
servicer to such appointment shall have assumed the Master Servicer's
responsibilities, duties, liabilities and obligations hereunder.
Section 6.05. Errors and Omissions Insurance; Fidelity
Bonds.
The Master Servicer shall, for so long as it acts as
servicer under this Agreement, obtain and maintain in force (a) a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as servicer hereunder, and (b) a fidelity bond in respect of its
officers, employees and agents. Each such policy or policies and bond shall,
together, comply with the requirements from time to time of Xxxxxx Xxx or
Xxxxxxx Mac for persons performing servicing for mortgage loans purchased by
Xxxxxx Mae or Xxxxxxx Mac. In the event that any such policy or bond ceases to
be in effect, the Master Servicer shall use its reasonable best efforts to
obtain a comparable replacement policy or bond from an insurer or issuer,
meeting the requirements set forth above as of the date of such replacement.
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of
the following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the
Trustee any payment (excluding a payment required to be made under
Section 4.01 hereof) required to be made under the terms of this
Agreement, which failure shall continue unremedied for five calendar
days and, with respect to a payment required to be made under Section
4.01 hereof, for one calendar day, after the date on which written
notice of such failure shall have been given to the Master Servicer
by the Trustee or the Depositor, or to the Trustee and the Master
Servicer by the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates; or
(ii)any failure by the Master Servicer or, so long as the
Master Servicer is also the Seller, the Seller to observe or perform
in any material respect any other of the covenants or agreements on
the part of the Master Servicer contained in this Agreement or any
representation or warranty shall prove to be untrue, which failure or
breach shall continue unremedied for a period of 60 days after the
date on which written notice of such failure shall have been given to
the Master Servicer by the Trustee or the Depositor, or to the
Trustee by the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates; provided that the
sixty-day cure period shall not apply to the initial delivery of the
Mortgage File for Delay Delivery Mortgage Loans nor the failure to
repurchase or substitute in lieu thereof; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to
take advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an
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assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations.
If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been
remedied, the Trustee shall, but only at the direction of the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates, by notice in writing to the Master Servicer (with a copy to
each Rating Agency), terminate all of the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to
the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee.
The Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such
termination shall affect any obligation of the Master Servicer to pay amounts
owed pursuant to Article VIII. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be
credited to the Certificate Account, or thereafter be received with respect to
the Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of
the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a
Master Servicer hereunder, such Master Servicer shall be entitled to receive,
out of any late collection of a Scheduled Payment on a Mortgage Loan that was
due prior to the notice terminating such Master Servicer's rights and
obligations as Master Servicer hereunder and received after such notice, that
portion thereof to which such Master Servicer would have been entitled
pursuant to Sections 3.08(a)(i) through (viii), and any other amounts payable
to such Master Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice
of termination pursuant to Section 7.01 hereof, the Trustee shall, to the
extent provided in Section 3.04, be the successor to the Master Servicer in
its capacity as servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof and applicable law including the obligation to
make advances pursuant to Section 4.01. As compensation therefor, the Trustee
shall be entitled to all fees, costs and expenses relating to the Mortgage
Loans that the Master Servicer would have been entitled to if the Master
Servicer had continued to act hereunder. Notwithstanding the foregoing, if the
Trustee has become the
VII-2
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if
it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
the appointment of which does not adversely affect the then current rating of
the Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a Xxxxxx Xxx and Xxxxxxx Mac approved
seller/servicer in good standing, that has a net worth of at least
$15,000,000, and that is willing to service the Mortgage Loans and executes
and delivers to the Depositor and the Trustee an agreement accepting such
delegation and assignment, that contains an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Master Servicer (other than liabilities of the Master Servicer under Section
6.03 hereof incurred prior to termination of the Master Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement;
and provided further that each Rating Agency acknowledges that its rating of
the Certificates in effect immediately prior to such assignment and delegation
will not be qualified or reduced as a result of such assignment and
delegation. No appointment of a successor to the Master Servicer hereunder
shall be effective until the Trustee shall have consented thereto, and written
notice of such proposed appointment shall have been provided by the Trustee to
each Certificateholder. The Trustee shall not resign as servicer until a
successor servicer has been appointed and has accepted such appointment.
Pending appointment of a successor to the Master Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall,
subject to Section 3.04 hereof, act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master Servicer
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof or any failure to perform,
or any delay in performing, any duties or responsibilities hereunder, in
either case caused by the failure of the Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
Any successor to the Master Servicer as servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as servicer maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the
Master Servicer hereunder, either (i) the successor Master Servicer, including
the Trustee if the Trustee is acting as successor Master Servicer, shall
represent and warrant that it is a member of MERS in good standing and shall
agree to comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered
with MERS, or
VII-3
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Trustee or the
Custodian promptly upon receipt of the original with evidence of recording
thereon or a copy certified by the public recording office in which such
assignment was recorded.
Section 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice
of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.
VII-4
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee (or the Co-Trustee, to the extent provided in this
Agreement) that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they
conform to the requirements of this Agreement, to the extent provided in this
Agreement. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner, the Trustee shall take action as it
deems appropriate to have the instrument corrected.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure
to perform its obligations in compliance with this Agreement, or any liability
that would be imposed by reason of its willful misfeasance or bad faith;
provided that:
(i) prior to the occurrence of an Event of Default, and
after the curing of all such Events of Default that may have
occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable, individually or as Trustee, except for
the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee and the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Agreement that it reasonably believed in good
faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee
was grossly negligent or acted in bad faith or with willful
misfeasance; and
VIII-1
(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of Holders
of each Class of Certificates evidencing not less than 25% of the
Voting Rights of such Class relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii)the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv)prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default that may have occurred,
the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in
writing so to do by Holders of each Class of Certificates evidencing
not less than 25% of the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi)the Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance
of any of its duties hereunder if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity
against such liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
VIII-2
(viii) the Trustee shall not be deemed to have knowledge of
an Event of Default until a Responsible Officer of the Trustee shall
have received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct
or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any
of the Certificates, enforceable by the Trustee, may be enforced by the
Trustee without the possession of any of the Certificates, or the production
thereof at the trial or other proceeding relating thereto, and any such suit,
action or proceeding instituted by the Trustee shall be brought in its name
for the benefit of all the Holders of the Certificates, subject to the
provisions of this Agreement.
Section 8.03. Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the
statements of the Depositor or the Master Servicer, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of
any Mortgage Loan or related document or of MERS or the MERS(R) System other
than with respect to the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master
Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the same rights as it would
have if it were not the Trustee.
Section 8.05. Master Servicer to Pay Trustee's Fees and
Expenses.
The Master Servicer covenants and agrees to pay or reimburse
the Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must
engage persons not regularly in its employ to perform acts or services on
behalf of the Trust Fund, which acts or services are not in the ordinary
course of the duties of a trustee, paying agent or certificate registrar, in
the absence of a breach or default by any party hereto, the reasonable
compensation, expenses and
VIII-3
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be
indemnified by the Master Servicer and held harmless against any loss,
liability or expense (i) incurred in connection with any legal action
relating to this Agreement or the Certificates, or in connection with the
performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Trustee's duties hereunder or by
reason of reckless disregard of the Trustee's obligations and duties hereunder
and (ii) resulting from any error in any tax or information return prepared by
the Master Servicer. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Trustee hereunder.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation
or association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on
the Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation
or national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.
Section 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from
the trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Master Servicer and by mailing notice of resignation by
first class mail, postage prepaid, to the Certificateholders at their
addresses appearing on the Certificate Register and each Rating Agency, not
less than 60 days before the date specified in such notice when, subject to
Section 8.08, such resignation is to take effect, and (2) acceptance of
appointment by a successor trustee in accordance with Section 8.08 and meeting
the qualifications set forth in Section 8.06. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such
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notice or resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Master Servicer and
one copy of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set
of which instruments shall be delivered by the successor Trustee to the Master
Servicer one complete set to the Trustee so removed and one complete set to
the successor so appointed. Notice of any removal of the Trustee shall be
given to each Rating Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section 8.07
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.08 hereof.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor, its
predecessor trustee and the Master Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the
succession of such trustee hereunder to all
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Holders of Certificates. If the Depositor fails to mail such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Depositor.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be eligible under the
provisions of Section 8.06 hereof without the execution or filing of any paper
or further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at
any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Fund or property securing any
Mortgage Note may at the time be located, the Master Servicer and the Trustee
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof,
whichever is applicable, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights,
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powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 8.11. Tax Matters.
It is intended that the Trust Fund shall constitute, and
that the affairs of the Trust Fund shall be conducted so that the Upper Tier
REMIC and Lower Tier REMIC qualify as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf
of the Trust Fund and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit Income Tax Returns (Form 1066 or any successor
form adopted by the Internal Revenue Service) and prepare and file or cause to
be prepared and filed with the Internal Revenue Service and applicable state
or local tax authorities income tax or information returns for each taxable
year with respect to each REMIC created hereunder containing such information
and at the times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and
in such manner as may be required thereby; (b) within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the
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Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the
Code for the Trust Fund; (c) make or cause to be made elections, on behalf of
each REMIC created hereunder to be treated as a REMIC on the federal tax
return of each such REMIC for its first taxable year (and, if necessary, under
applicable state law); (d) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and,
if necessary, state tax authorities, all information returns and reports as
and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original
issue discount using the Prepayment Assumption; (e) provide information
necessary for the computation of tax imposed on the transfer of a Class A-R
Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is
the record holder of an interest (the reasonable cost of computing and
furnishing such information may be charged to the Person liable for such tax);
(f) to the extent that they are under its control conduct the affairs of the
Trust Fund at all times that any Certificates are outstanding so as to
maintain the status of each REMIC created hereunder as a REMIC under the REMIC
Provisions; (g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any REMIC
created hereunder; (h) pay, from the sources specified in the last paragraph
of this Section 8.11, the amount of any federal, state and local taxes,
including prohibited transaction taxes as described below, imposed on any
REMIC created hereunder prior to the termination of the Trust Fund when and as
the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) sign or cause to be signed federal, state or local income
tax or information returns; (j) maintain records relating to each REMIC
created hereunder, including but not limited to the income, expenses, assets
and liabilities of each such REMIC, and the fair market value and adjusted
basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of the Trust Fund, and otherwise act on behalf of any REMIC created
hereunder in relation to any tax matter involving any such REMIC.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within 10 days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Mortgage Loans. Thereafter, the Depositor shall
provide to the Trustee promptly upon
VIII-8
written request therefor, any such additional information or data that the
Trustee may, from time to time, request in order to enable the Trustee to
perform its duties as set forth herein. The Depositor hereby indemnifies the
Trustee for any losses, liabilities, damages, claims or expenses of the
Trustee arising from any errors or miscalculations of the Trustee that result
from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
startup day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, including, without limitation, any federal, state or local tax or
minimum tax imposed upon the Trust Fund pursuant to Sections 23153 and 24872
of the California Revenue and Taxation Code if not paid as otherwise provided
for herein, such tax shall be paid by (i) the Trustee, if any such other tax
arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) (x) the Master Servicer, in the case of
any such minimum tax, and (y) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party here fails to honor its
obligations under the preceding clauses (i) or (ii), any such tax will be paid
first with amounts otherwise to be distributed to the Class A-R
Certificateholders , and second with amounts otherwise to be distributed to
all other Certificateholders in the following order of priority: first, to the
Class B-2 Certificates (pro rata), second, to the Class B-1 Certificates (pro
rata), third, to the Class M-2 Certificates (pro rata), fourth, to the Class
M-1 Certificates (pro rata), and fifth, to the Class A-R Certificates and the
Class A Certificates (pro rata). Notwithstanding anything to the contrary
contained herein, to the extent that such tax is payable by the Class A-R
Certificates, the Trustee is hereby authorized to retain on any Distribution
Date, from the Holders of the Class A-R Certificates (and, if necessary,
second, from the Holders of the all other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Trustee agrees to
promptly notify in writing the party liable for any such tax of the amount
thereof and the due date for the payment thereof.
The Trustee shall treat the Carryover Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
that is owned by the Class A-IO Certificateholders and Seller, and that is not
an asset of the REMIC. The Trustee shall treat the rights of the Class A,
Class M-1, Class M-2, Class B-1 and Class B-2 Certificateholders to receive
payments from the Carryover Reserve Fund as rights in an interest rate cap
contract written by the Cap Contract Counterparty and Class A-IO
Certificateholder with respect to the Net Rate Carryover funded by the Cap
Contract and the Class A-IO Cashflow Carryover Deposit Amount, respectively,
in favor of the other Certificateholders. Thus, each Certificate other than
the Class A-IO shall be treated as representing ownership of not only REMIC UT
Regular Interests, but also ownership of an interest in an interest rate cap
contract. For purposes of determining the issue price of the REMIC 2 Regular
interests, the Trustee shall assume that the interest rate cap contract has a
value of $5,000.
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Section 8.12. Co-Trustee.
(a) The Co-Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Co-Trustee that are specifically required to be
furnished pursuant to any provision of this Agreement shall examine them to
determine whether they conform to the requirements of this Agreement, to the
extent required by this Agreement. If any such instrument is found not to
conform to the requirements of this Agreement in a material manner, the
Co-Trustee shall take action as it deems appropriate to have the instrument
corrected.
(b) No provision of this Agreement shall be construed to
relieve the Co-Trustee from liability for its own grossly negligent action,
its own gross negligent failure to act or its own misconduct, its grossly
negligent failure to perform its obligations in compliance with this
Agreement, or any liability that would be imposed by reason of its willful
misfeasance or bad faith; provided that:
(i) the duties and obligations of the Co-Trustee shall be
determined solely by the express provisions of this Agreement with
the exception of Section 8.10, the Co-Trustee shall not be liable,
individually or as Co-Trustee, except for the performance of such
duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into
this Agreement against the Co-Trustee and the Co-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 Co-Trustee and conforming to the
requirements of this Agreement that it reasonably believed in good
faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder; and
(ii)the Co-Trustee shall not be liable, individually or as
Co-Trustee, for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless
the Co-Trustee was grossly negligent or acted in bad faith or with
willful misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(i) the Co-Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii)the Co-Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
VIII-10
(iii) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv)the Co-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;
(v) the Co-Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys; and
(vi)the Co-Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance
of any of its duties hereunder if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity
against such liability is not assured to it.
(d) The recitals contained herein shall be taken as the
statements of the Depositor or the Master Servicer, as the case may be, and
the Co-Trustee assumes no responsibility for their correctness. The Co-Trustee
makes no representations as to the validity or sufficiency of this Agreement
or of any Mortgage Loan or related document or of MERS or the MERS(R) System
other than with respect to the Co-Trustee's execution and authentication of
the Certificates. The Co-Trustee shall not be accountable for the use or
application by the Depositor or the Master Servicer of any funds paid to the
Depositor or the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Certificate Account by the Depositor or the Master
Servicer.
(e) The Co-Trustee in its individual or any other capacity
may become the owner or pledgee of Certificates with the same rights as it
would have if it were not the Co-Trustee.
(f) The Master Servicer covenants and agrees (i) to pay to
the Co-Trustee from time to time, and the Co-Trustee shall be entitled to,
such compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered
by it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and
(ii) to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services
are not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such
persons, except any such expense, disbursement or advance as may arise from
its negligence, bad faith or willful misconduct). The Co-Trustee and any
VIII-11
director, officer, employee or agent of the Co-Trustee shall be indemnified by
the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to this Agreement or
the Certificates, or in connection with the performance of any of the
Co-Trustee's duties hereunder, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Co-Trustee's duties hereunder or by reason of
reckless disregard of the Co-Trustee's obligations and duties hereunder and
(ii) resulting from any error in any tax or information return prepared by the
Master Servicer. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Co-Trustee hereunder.
(g) The Co-Trustee hereunder shall, at all times, be a
corporation or association organized and doing business under the laws of a
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating that would not cause any of the Rating
Agencies to reduce their respective ratings of any Class of Certificates below
the ratings issued on the Closing Date (or having provided such security from
time to time as is sufficient to avoid such reduction). If such corporation or
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 8.12 the combined capital and surplus of
such corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Co-Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.12, the Co-Trustee shall resign immediately
in the manner and with the effect specified in paragraph (h) below. The
corporation or national banking association serving as Co-Trustee may have
normal banking and trust relationships with the Depositor, the Seller and the
Master Servicer and their respective affiliates; provided that such
corporation cannot be an affiliate of the Master Servicer other than the
Trustee in its role as successor to the Master Servicer.
(h) The Co-Trustee may at any time resign and be discharged
from the trusts hereby created by giving 30 days prior written notice of
resignation to the Trustee, the Depositor and the Master Servicer. Upon such
resignation the Trustee (x) may appoint a successor Co-Trustee meeting the
requirements in paragraph (g) above and acceptable to the Master Servicer (in
its sole discretion), so long as such Co-Trustee executes and delivers to the
other parties hereto an instrument agreeing to be bound by the provisions of
this Agreement or (y) may if permitted by the Master Servicer (in its sole
discretion) assume the rights and duties of the resigning Co-Trustee so long
as the Trustee executes and delivers an instrument to that effect.
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ARTICLE IX.
TERMINATION
Section 9.01. Termination upon Liquidation or Repurchase of
all Mortgage Loans.
Subject to Section 9.03, the Trust Fund shall terminate and
the obligations and responsibilities of the Depositor, the Master Servicer,
the Seller and the Trustee created hereby shall terminate upon the earlier of
(a) the repurchase by the Master Servicer of all of the Mortgage Loans (and
REO Properties) remaining in the Trust Fund at the price equal to the sum of
(i) 100% of the Stated Principal Balance of each Mortgage Loan in the Trust
Fund (other than in respect of REO Property), (ii) accrued interest thereon at
the applicable Net Mortgage Rate, (iii) the appraised value of any REO
Property in the Trust Fund (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Master Servicer and the Trustee and (iv) any unreimbursed
Servicing Advances, and the principal portion of any unreimbursed Advances,
made on the Mortgage Loans prior to the exercise of such repurchase and (b)
the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to related
Certificateholders of all amounts required to be distributed to them pursuant
to this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the
date hereof and (ii) the Latest Possible Maturity Date.
The Master Servicer shall have the right to repurchase all
Mortgage Loans and REO Properties in the Trust Fund pursuant to clause (a) in
the preceding paragraph only on or after the date on which the Master Servicer
determines that the customary and reasonable costs and expenses incurred in
the performance of the Master Servicer of its servicing obligations hereunder
exceed the benefits accruing to the Master Servicer; provided, however, that
in no event shall the Master Servicer exercise its right to repurchase all
Mortgage Loans and REO Properties in the Trust Fund pursuant to clause (a) in
the preceding paragraph of this Section 9.01 before the date on which the
Stated Principal Balance of the Mortgage Loans, at the time of any such
repurchase, is less than or equal to ten percent (10%) of the sum of the
Stated Principal Balance of the Initial Mortgage Loans as of the Initial
Cut-off Date plus the Pre-Funded Amount.
Section 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds in the Certificate Account, the
Master Servicer shall direct the Trustee to send a final distribution notice
promptly to each Certificateholder or (ii) the Trustee determines that a Class
of Certificates shall be retired after a final distribution on such Class, the
Trustee shall notify the related Certificateholders within five (5) Business
Days after such Determination Date that the
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final distribution in retirement of such Class of Certificates is scheduled to
be made on the immediately following Distribution Date. Any final distribution
made pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the related Certificates at the Corporate Trust
Office of the Trustee. If the Master Servicer elects to terminate the Trust
Fund pursuant to clause (a) of Section 9.01, at least 20 days prior to the
date notice is to be mailed to the Certificateholders, such electing party
shall notify the Depositor and the Trustee of the date such electing party
intends to terminate the Trust Fund and of the applicable repurchase price of
the related Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed
not earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on
related Certificates will be made upon presentation and surrender of such
Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of such
Certificates at the office therein specified. The Master Servicer will give
such notice to each Rating Agency at the time such notice is given to the
affected Certificateholders.
In the event such notice is given, the Master Servicer shall
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the related Certificates. Upon such final deposit and the receipt
by the Trustee of a Request for Release therefor, the Co-Trustee shall
promptly release to the Master Servicer the Mortgage Files for the related
Mortgage Loans.
Upon presentation and surrender of the related Certificates,
the Trustee shall cause to be distributed to Certificateholders of each
affected Class the amounts allocable to such Certificates held in the
Distribution Account (and, if applicable, the Carryover Reserve Fund) in the
order and priority set forth in Section 4.04 hereof on the final Distribution
Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not
surrender related Certificates for cancellation within six months after the
date specified in the above mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
related Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one
year after the second notice all related
IX-2
Certificates shall not have been surrendered for cancellation, the Class A-R
shall be entitled to all unclaimed funds and other assets that remain subject
hereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase
option on the Mortgage Loans, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been
supplied with an Opinion of Counsel, at the expense of the Master Servicer, to
the effect that the failure of the Trust Fund to comply with the requirements
of this Section 9.03 will not (i) result in the imposition of taxes on
"prohibited transactions" of a REMIC, or (ii) cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master
Servicer shall prepare a plan of complete liquidation and shall otherwise
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Master Servicer;
(2) During such 90-day liquidation period, and
at or prior to the time of making the final payment on the Certificates, the
Master Servicer as agent of the Trustee shall sell all of the assets of the
Trust Fund for cash; and
(3) At the time of the making of the final
payment on the Certificates, the Trustee shall distribute or credit, or cause
to be distributed or credited, to the Class A-R Certificateholders all cash on
hand (other than cash retained to meet claims) related to such Class of
Certificates, and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Certificateholders.
(c) The Trustee as agent for each REMIC created hereunder
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Master Servicer, and the receipt of the Opinion of
Counsel referred to in Section 9.03(a)(1), and,together with the holders of
the Class A-R Certificates, agree to take such other action in connection
therewith as may be reasonably requested by the Master Servicer.
IX-3
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee, without the
consent of any of the Certificateholders to cure any ambiguity, to correct or
supplement any provisions herein, or to make such other provisions with
respect to matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Certificateholder; provided that any such amendment shall
be deemed not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal
of the respective ratings then assigned to the Certificates, it being
understood and agreed that any such letter in and of itself will not represent
a determination as to the materiality of any such amendment and will represent
a determination only as to the credit issues affecting any such rating.
Notwithstanding the foregoing, no amendment that significantly changes the
permitted activities of the trust created by this Agreement may be made
without the consent of Certificateholders representing not less than 51% of
the Voting Rights of each Class of Certificates affected by such amendment.
The Trustee, the Depositor, the Master Servicer and the
Seller may also at any time and from time to time amend this Agreement,
without the consent of the Certificateholders, to modify, eliminate or add to
any of its provisions to such extent as shall be necessary or appropriate to
maintain the qualification of the Trust Fund as a REMIC under the Code or to
avoid or minimize the risk of the imposition of any tax on the Trust Fund
pursuant to the Code that would be a claim against the Trust Fund at any time
prior to the final redemption of the Certificates, provided that the Trustee
have been provided an Opinion of Counsel, which opinion shall be an expense of
the party requesting such opinion but in any case shall not be an expense of
the Trustee, to the effect that such action is necessary or appropriate to
maintain such qualification or to avoid or minimize the risk of the imposition
of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee and the Holders of
each Class of Certificates affected thereby evidencing not less than 51% of
the Voting Rights of such Class for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect
in any material respect the interests of the Holders of any Class of
Certificates in a manner other than as described in (i), without the consent
of the Holders of Certificates of such Class evidencing 66% or more of the
Voting Rights of such Class, or
X-1
(iii) reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement,
the Trustee shall not consent to any amendment to this Agreement unless it
shall have first received an Opinion of Counsel, which opinion shall be an
expense of the party requesting such amendment but in any case shall not be an
expense of the Trustee, to the effect that such amendment will not cause the
imposition of any tax on the Trust Fund or the Certificateholders or cause the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel, satisfactory to the
Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect in
any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required
to be reached pursuant to this Section 10.01.
Section 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the properties subject to the
Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Master Servicer at its
expense.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE
X-2
OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND
THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 10.04. Intention of Parties.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute
sale thereof to the Trustee. It is, further, not the intention of the parties
that such conveyance be deemed a pledge thereof by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, or if for
any other reason this Agreement or any Subsequent Transfer Agreement is held
or deemed to create a security interest in such assets, then (i) this
Agreement shall be deemed to be a security agreement (within the meaning of
the Uniform Commercial Code of the State of New York) with respect to all such
assets and security interests and (ii) the conveyance provided for in this
Agreement and any Subsequent Transfer Agreement shall be deemed to be an
assignment and a grant pursuant to the terms of this Agreement by the
Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders
shall, to the extent consistent with this Agreement, take such actions as may
be necessary to ensure that, if this Agreement were deemed to create a
security interest in the assets of the Trust Fund, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement. The Depositor shall arrange for filing any Uniform Commercial Code
continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
X-3
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 2.04 and 3.12; and
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each
Rating Agency copies of the following:
(i) Each report to Certificateholders described in
Section 4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be
in writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the
Depositor, CWABS, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxx Xxxxx, with a copy to the same address, Attention: Legal
Department; (ii) in the case of the Seller or the Master Servicer, Countrywide
Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx Xxxxx, with a copy to the same address, Attention: Legal Department, or
such other address as may be hereafter furnished to the Depositor and the
Trustee by the Master Servicer in writing; (iii) in the case of the Trustee,
The Bank of New York, 000 Xxxxxxx Xxxxxx, 00X, Xxx Xxxx, Xxx Xxxx Attention:
Corporate Trust MBS Administration, CWABS, Series 2001-BC3, or such other
address as the Trustee may hereafter furnish to the Depositor or the Master
Servicer; (iv) in the case of the Co-Trustee, BNY Western Trust Company, a
subsidiary of The Bank of New York Company Inc., 000 X. Xxxxxx Xxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, Attention: MBS Support Services; and (v)
in the case of the Rating Agencies, (x) Xxxxx'x Investors Service, Inc.,
Attention: ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 and (y) Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Attention: Mortgage Surveillance Group, 00 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Notices to Certificateholders shall be
deemed given when mailed, first class postage prepaid, to their respective
addresses appearing in the Certificate Register.
Section 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions
or terms of this Agreement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Certificates or the rights of the
Holders thereof.
X-4
Section 10.07. Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 6.02, this Agreement may not be
assigned by the Master Servicer without the prior written consent of the
Trustee and the Depositor.
Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates shall also have made
written request to the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
X-5
Section 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice,
it will permit any representative of the Depositor or the Trustee during the
Master Servicer's normal business hours, to examine all the books of account,
records, reports and other papers of the Master Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to
be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby
authorizes such accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall
be borne by the Master Servicer.
Section 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and
shall be deemed fully paid.
* * *
X-6
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Seller and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
CWABS, INC.,
as Depositor
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Master Servicer and Seller
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By: /s/ Xxxxxxxx Xxxxxxxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
BNY WESTERN TRUST COMPANY,
not in its individual capacity,
but solely as Co-Trustee
By: /s/ Xxxxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of August, 2001, before me, a notary public
in and for said State, appeared Xxxx Xxxxx, personally known to me on the
basis of satisfactory evidence to be the Vice President of Countrywide Home
Loans, Inc., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of August, 2001, before me, a notary public
in and for said State, appeared Xxxx Xxxxx, personally known to me on the
basis of satisfactory evidence to be the Vice President of CWABS, Inc., one of
the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of such corporation and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
---------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 30th day of August, 2001, before me, a notary public
in and for said State, appeared Xxxxxxxx Xxxxxxxxxxx, personally known to me
on the basis of satisfactory evidence to be a Vice President of The Bank of
New York, a New York banking corporation that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Xxx X. Sunshine
---------------------------
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of August, 2001, before me, a notary public
in and for said State, appeared Xxxxxxxxx Xxxxxx, personally known to me on
the basis of satisfactory evidence to be a Vice President of BNY Western Trust
Company, a California banking corporation that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Xxxxxxxx X. Xxxxxx
-----------------------
Notary Public
[Notarial Seal]
Exhibit A-1
through A-6
[Exhibits A-1 through A-6 are
photocopies of such Certificates as
delivered.]
[See appropriate documents delivered at closing]
A-1
Exhibit B
[Reserved]
B-1
Exhibit C
[Reserved]
C-1
Exhibit D
[Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.]
[See appropriate documents delivered at closing]
D-1
Exhibit E
[Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.]
[See appropriate documents delivered at closing]
E-1
Exhibit F-1 and F-2
[Exhibit F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee]
F-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of August 1, 2001
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller and Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee,
relating to the Asset-Backed Certificates, Series 2001-BC3
-----------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed in the attached list of exceptions) the
Co-Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of ___________, without recourse", or, if the original Mortgage
Note has been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note; and
(ii) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement referred to above.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
G-1-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By: _____________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of August 1, 2001
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller and Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee,
relating to the Asset-Backed Certificates, Series 2001-BC3
[and the Subsequent Transfer Agreement dated as of ___, 2001
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, and The Bank of New York, as Trustee
------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that,
except as listed in the following paragraph, as to each [Initial Mortgage
Loan][Subsequent Mortgage Loan] listed in the [Mortgage Loan Schedule][Loan
Number and Borrower Identification Mortgage Loan Schedule] (other than any
[Mortgage Loan][Loan Number and Borrower Identification Mortgage Loan
Schedule] paid in full or listed on the attached list of exceptions) the
Co-Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to the
Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related
Mortgage Note;
(ii) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, the
original recorded Mortgage, [and in the case of each
[Initial Mortgage Loan][Subsequent Mortgage Loan] that is a
MERS Mortgage Loan, the original Mortgage, noting thereon
the presence of the MIN of the [Initial Mortgage
Loan][Subsequent Mortgage Loan] and language indicating that
the [Initial Mortgage Loan][Subsequent Mortgage Loan] is a
MOM Loan if
G-2-1
the [Initial Mortgage Loan][Subsequent Mortgage
Loan] is a MOM Loan, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded];
(iii) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly
executed assignment of the Mortgage to "The Bank of New
York, as trustee under the Pooling and Servicing Agreement
dated as of August 1, 2001, without recourse", or, in the
case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form
and sufficient to effect the assignment of and transfer to
the assignee thereof, under the Mortgage to which such
assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such Mortgage [(noting the presence of a MIN in the case of
each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or
a printout of the electronic equivalent and all riders
thereto or, in the event such original title policy has not
been received from the insurer, any one of an original title
binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title
company, with the original policy of title insurance to be
delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements
of clause (ii), (iii) or (iv), as applicable, the Trustee has received, in
lieu thereof, a true and complete copy of such Mortgage and/or such assignment
or assignments of the Mortgage, as applicable, each certified by the Seller,
the applicable title company, escrow agent or attorney, or the originator of
such [Initial Mortgage Loan][Subsequent Mortgage Loan], as the case may be, to
be a true and complete copy of the original Mortgage or assignment of Mortgage
submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
[Initial Mortgage Loan][Subsequent Mortgage Loan], and (ii) the information
set forth in items (i), (iv), (v), (vi), (viii), (xi) and (xiv) of the
definition of the "Mortgage Loan Schedule" in Section 1.01 of the Pooling and
Servicing Agreement accurately reflects information set forth in the Mortgage
File.
G-2-2
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the [Initial Mortgage Loans][Subsequent Mortgage Loan] identified on the
[Mortgage Loan Schedule][Loan Number and Borrower Identification Mortgage Loan
Schedule] or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
G-2-3
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:______________________________
Name:
Title:
G-2-4
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of August 1, 2001
(the "Pooling and Servicing Agreement") among CWABS, Inc.,
as Depositor, Countrywide Home Loans, Inc., as Seller and
Master Servicer, The Bank of New York, as Trustee, and BNY
Western Trust Company, as Co-Trustee, relating to the
Asset-Backed Certificates, Series 2001-BC3 [and the
Subsequent Transfer Agreement dated as of ____, 2001 (the
"Subsequent Transfer Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, and
The Bank of New York, as Trustee]
-----------------------------------------------------------
Gentlemen:
[Reference is made to the Initial Certification of Trustee relating
to the above-referenced series, with the schedule of exceptions attached
thereto, delivered by the undersigned, as Trustee, on the Closing Date in
accordance with Section 2.02 of the above-captioned Pooling and Servicing
Agreement.] The undersigned hereby certifies that [, with respect to the
Subsequent Mortgage Loans delivered in connection with the Subsequent Transfer
Agreement,] as to each Delay Delivery Mortgage Loan listed on the Schedule A
attached hereto (other than any [Initial Mortgage Loan][Subsequent Mortgage
Loan] paid in full or listed on Schedule B attached hereto) the Co-Trustee has
received:
(i) the original Mortgage Note, endorsed by the Seller or
the originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Seller, or, if the
original Mortgage Note has been lost or destroyed and not replaced,
an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of
the related Mortgage Note;
(ii)in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage to "The Bank of New York, as trustee under
the Pooling and Servicing Agreement dated as of August 1, 2001,
without recourse", or, in the case of each [Initial Mortgage
G-3-1
Loan][Subsequent Mortgage Loan] with respect to property located in
the State of California that is not a MERS Mortgage Loan, a duly
executed assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which such assignment relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
G-3-2
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the [Initial Mortgage Loans][Subsequent Mortgage Loans] identified on the
[Mortgage Loan Schedule][Loan Number and Borrower Identification Mortgage Loan
Schedule] or (ii) the collectibility, insurability, effectiveness or
suitability of any such [Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE BANK OF NEW YORK,
as Trustee
By:________________________
Name:
Title:
G-3-3
EXHIBIT G-4
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUBSEQUENT MORTGAGE LOANS)
[Date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of August 1, 2001
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller and Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee,
relating to the Asset-Backed Certificates, Series 2001-BC3
-------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed in the attached list of exceptions) the
Co-Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________, without recourse", or, if the original Mortgage Note
has been lost or destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note; and
(ii) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement referred to above.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
G-4-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By: ________________________
Name:
Title:
G-4-2
EXHIBIT H-1
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement dated as of August 1, 2001 among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller and Master
Servicer, The Bank of New York, as Trustee, and BNY Western Trust
Company, as Co-Trustee, relating to the Asset-Backed Certificates,
Series 2001-BC3 [and the Subsequent Transfer Agreement dated as of ___,
2001 among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, and The Bank of New York, as Trustee]
-----------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each [Initial Mortgage Loan][Subsequent Mortgage Loan] listed in the [Mortgage
Loan Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule]
(other than any [Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full
or listed on the attached Document Exception Report) the Co-Trustee has
received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and
not replaced, an original lost note affidavit from the Seller, stating that
the original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage, [and
in the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] that is
a MERS Mortgage Loan, the original Mortgage, noting thereon the presence of
the MIN of the [Initial Mortgage Loan][Subsequent Mortgage Loan] and language
indicating that the [Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM
Loan if the [Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM
H-1
Loan, with evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded];
(iii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "The Bank of New York, as trustee under the Pooling and Servicing
Agreement dated as of August 1, 2001, without recourse", or, in the case of
each [Initial Mortgage Loan][Subsequent Mortgage Loan] with respect to
property located in the State of California that is not a MERS Mortgage Loan,
a duly executed assignment of the Mortgage in blank (each such assignment,
when duly and validly completed, to be in recordable form and sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage [(noting the
presence of a MIN in the case of each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of recording
thereon if recordation thereof is permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or any one of an
original title binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v),
(vi), (viii), (xiii) and (xiv) of the definition of the "Mortgage Loan
Schedule" in Section 1.01 of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the [Initial Mortgage Loans][Subsequent Mortgage Loan] identified on the
[Mortgage Loan Schedule][Loan Number and Borrower Identification Mortgage Loan
Schedule] or (ii) the collectibility, insurability, effectiveness or
suitability of any such [Initial Mortgage Loan][Subsequent Mortgage Loan].
H-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:______________________________
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated
as of August 1, 2001 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as Seller and Master
Servicer, The Bank of New York, as Trustee, and BNY Western Trust Company, as
Co-Trustee. Capitalized terms used, but not defined herein or in Exhibit 1
hereto, shall have the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this affidavit on behalf of
the Transferee.
2. The Transferee is not an employee benefit plan that is subject to
Section 4975 of the Internal Revenue Code of 1986, nor is it acting on behalf
of or with plan assets of any such plan. The Transferee is, as of the date
hereof, and will be, as of the date of the Transfer, a Permitted Transferee.
The Transferee is acquiring its Ownership Interest in the Certificate for its
own account.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
I-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Class A-R Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax. In
addition, as the holder of a noneconomic residual interest, the Transferee may
incur tax liabilities in excess of any cash flows generated by the interest
and the Transferee hereby represents that it intends to pay taxes associated
with holding the residual interest as they become due.
11. The Transferee has provided financial statements or other
financial information requested by the Transferor in connection with the
transfer of the Class A-R Certificates to permit the Transferor to assess the
financial capability of the Transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:___________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_________________________
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and
to be the ____________ of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
______________________________
NOTARY PUBLIC
My Commission expires the___ day of
_______________, 20__.
I-3
EXHIBIT 1
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest
in such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, International Organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1) of the
Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in Section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate
whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trustor
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form 4224, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class A-R Certificate to such Person may cause
the Trust Fund to fail to qualify as a REMIC at any time that certain
Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a majority
of its board of directors is not selected by such government unit.
"Person": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
EXHIBIT 2
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership
Interest in a Class A-R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Class A-R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest
in a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, in addition to the certificates required to be delivered to
the Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as
Exhibit I.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall agree (A) to obtain a
Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer
of a Class A-R Certificate and (C) not to Transfer its Ownership
Interest in a Class A-R Certificate or to cause the Transfer of an
Ownership Interest in a Class A-R Certificate to any other Person if
it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person
for any registration of Transfer of a Class A-R Certificate that is
in fact not permitted by Section 5.02(b) and this Section 5.02(c) or
for making any payments due on such Certificate to the Holder thereof
or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to
recover from any Holder of a Class A-R Certificate that was in fact
not a Permitted
1
Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class A-R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee
of such Certificate.
(v) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section
860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Class A-R Certificate to any Holder who is not a
Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable
portions of the legend on a Class A-R Certificate may be deleted) with respect
to Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Seller or
the Master Servicer to the effect that the elimination of such restrictions
will not cause the Trust Fund to fail to qualify as a REMIC at any time that
the Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Class A-R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record
ownership of, or any beneficial interest in, a Class A-R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class
A-R Certificate that is held by a Person that is not a Permitted Transferee to
a Holder that is a Permitted Transferee.
2
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS A-R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx, 00X
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed
Certificates, Series 2001-BC3
-----------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R
Certificates, we certify that we have no knowledge the Transferee is not a
Permitted Transferee. All capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Pooling and Servicing
Agreement dated as of August 1, 2001, among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as Seller and Master Servicer, The Bank of New
York, as Trustee, and BNY Western Trust Company, as Co-Trustee.
Very truly yours,
__________________________________
Name of Transferor
By: _______________________________
Name:
Title:
J-1
EXHIBIT K
[Reserved]
K-1
EXHIBIT L
[Reserved]
L-1
EXHIBIT M
REQUEST FOR RELEASE
(for Co-Trustee)
Loan Information
----------------
Name of Mortgagor:
-------------------------------------
Master Servicer
Loan No.:
--------------------------------------
Co-Trustee
----------
Name:
---------------------------------------
Address:
---------------------------------------
Co-Trustee
Mortgage File No.:
---------------------------------------
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Co-Trustee for the
Holders of Asset-Backed Certificates, Series 2001-BC3, the documents referred
to below (the "Documents"). All capitalized terms not otherwise defined in
this Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement dated as of August 1, 2001 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller and Master Servicer, the Trustee and the Co-Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum
of $________, made by __________________, payable to, or endorsed to
the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no. ____________
in the County Recorder's Office of the County of ________________,
State of _______________ in book/reel/docket _______________ of
official records at page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument
no. ____________ in the County Recorder's Office of the County
of ________________, State of _______________ in book/reel/
docket _______________ of official records at page/image ____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded
on _________________ as instrument no. __________ in the
County Recorder's Office of
M-1
the County of __________, State of _______________ in book/reel
/docket _______________ of official records at page/
image _____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trust Fund, solely for
the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit
the Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or other
impositions nor shall the Master Servicer assert or seek to assert
any claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Co-Trustee when
the need therefor no longer exists, unless the Mortgage Loan relating
to the Documents has been liquidated and the proceeds thereof have
been remitted to the Certificate Account and except as expressly
provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of
the Trust Fund, and the Master Servicer shall keep the Documents and
any proceeds separate and distinct from all other property in the
Master Servicer's possession, custody or control.
[Master Servicer]
By _______________________________
Its ________________________________
Date: _________________, ____
M-2
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2001-BC3
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO
SECTION 3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE
CREDITED.
____________ _____________________ DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
[Exhibit O is a photocopy
of the Depository Agreement
as delivered.]
[see appropriate documents delivered at closing]
O-1
EXHIBIT P
FORM OF MORTGAGE NOTE AND MORTGAGE
P-1
EXHIBIT Q
[FORM OF SUBSEQUENT TRANSFER AGREEMENT]
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________,
2001 (this "Subsequent Transfer Agreement"), among CWABS, INC., a Delaware
corporation, as depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a
New York corporation, in its capacity as seller under the Pooling and
Servicing Agreement referred to below ( the "Seller") and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, the Seller, the Trustee and CHL, as
Master Servicer, have entered in the Pooling and Servicing Agreement, dated as
of August 1, 2001 (the "Pooling and Servicing Agreement"), relating to the
CWABS, Inc. Asset-Backed Certificates, Series 2001-BC3 (capitalized terms not
otherwise defined herein are used as defined in the Pooling and Servicing
Agreement);
WHEREAS, Section 2.01(b) of the Pooling and Servicing
Agreement provides for the parties hereto to enter into this Subsequent
Transfer Agreement in accordance with the terms and conditions of the Pooling
and Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged the parties hereto agree as follows:
(a) The "Subsequent Transfer Date" with respect to this
Subsequent Transfer Agreement shall be ________ __, 2001.
(b) The "Subsequent Transfer Date Aggregate Purchase Amount"
with respect to this Subsequent Transfer Agreement shall be $_______________;
provided, however, that such amount shall not exceed the amount on deposit in
the Pre-Funding Account.
(c) [Reserved]
(d) [Reserved]
(e) The Subsequent Mortgage Loans conveyed on the Subsequent
Transfer Date shall be determined by the Seller as follows.
(i) The Seller shall list all funded mortgage loans then
owned by it eligible for inclusion in the Trust Fund that qualify for
inclusion in the Trust Fund by the date on which they were funded,
and for each date, the Mortgagors shall be listed alphabetically.
Beginning with the earliest date, sequentially by date and within a
date alphabetically, the listed loans shall be transferred to the
Trust Fund until either their aggregate Stated
Q-1
Principal Balance is as close as possible or to equal to the
Subsequent Transfer Date Aggregate Purchase Amount without exceeding
it or all of the listed loans have been transferred. No fixed rate
mortgage loan that would be a Credit Comeback Loan is eligible for
conveyance to the Trust Fund on a Subsequent Transfer Date occurring
after ____, 2001.
Once the potential Subsequent Mortgage Loans are identified
in this manner, the total potential Mortgage Loans shall be tested
for compliance with the Pool Characteristics as provided in Section
2.01(e)(vii) of the Pooling and Servicing Agreement after taking into
account the addition of such potential Subsequent Mortgage Loans. If,
as a result of the potential addition of Subsequent Mortgage Loans
described in the preceding sentence, any Pool Characteristic is
outside any permitted parameter, then beginning with the last
mortgage loan initially added as a potential Subsequent Mortgage Loan
and progressing in reverse order, any potential Subsequent Mortgage
Loan having a characteristic that is outside of the permitted
parameters of a parameter violated by the total potential Mortgage
Pool shall be removed. Then additional mortgage loans shall be added
as provided in the preceding paragraph except that no mortgage loan
shall be added if it has a Pool Characteristic that is outside of the
permitted parameters of a parameter violated by the total potential
Mortgage Pool. This procedure shall be repeated until the Pool
Characteristics are satisfied after taking into account the addition
of the potential Subsequent Mortgage Loans.
(f) In case any provision of this Subsequent Transfer
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby.
(g) In the event of any conflict between the provisions of
this Subsequent Transfer Agreement and the Pooling and Servicing Agreement,
the provisions of the Pooling and Servicing Agreement shall prevail.
(h) This Subsequent Transfer Agreement shall be governed by,
and shall be construed and enforced in accordance with the laws of the State
of New York.
(i) The Subsequent Transfer Agreement may be executed in one
or more counterparts, each of which so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one and
the same instrument.
Q-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer
Agreement have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CWABS, INC.,
as Depositor
By: __________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: __________________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By: _________________________
Name:
Title:
Q-3
EXHIBIT R
CONFIRMATION AND SCHEDULE BETWEEN BEAR XXXXXXX FINANCIAL
PRODUCTS INC. AND COUNTRYWIDE HOME LOANS, INC.
BEAR XXXXXXX
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXX XXXXXX
XXXXX 0000
XXX XXXX, XXX XXXX 00000
000-000-0000
DATE: August 13, 2001
TO: Countrywide Home Loans, Inc.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and
Agreement
REFERENCE NUMBER: NCC4586
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the current Transaction entered into on the Trade Date specified
below (the "Current Transaction") between Bear Xxxxxxx Financial Products Inc.
("BSFP") and Countrywide Homeloan Inc. ("Counterparty"). This Agreement, which
evidences a complete and binding agreement between you and us to enter into
the Transaction on the terms set forth below, constitutes a "Confirmation" as
referred to in the "ISDA Form Master Agreement" (as defined below), as well as
a "Schedule" as referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to the 1991 ISDA Definitions (the "1991
Definitions"), as supplemented by the 1998 Supplement to the 1991 ISDA
Definitions (the "Supplement") and as amended and supplemented by the 1998
ISDA Euro Definitions (the "Euro Definitions") (collectively the
"Definitions"), each as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). You and we have agreed to enter into this
Agreement in lieu of negotiating a Schedule to the ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") but,
rather, an ISDA Form Master Agreement shall be deemed to have been executed by
you and us on the date we entered into the Transaction. In the event of any
inconsistency between the provisions of this Agreement and the Definitions or
the ISDA Form Master Agreement, this Agreement shall prevail for purposes of
the Transaction.
R-1
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Type of Transaction: Rate Cap
Notional Amount: Shall equal:
(i) USD 142,000,000 for the initial Calculation
Period, and
(ii) the amount as detailed in the Schedule of
Notional Amounts attached hereto.
Trade Date: August 9, 2001
Effective Date: August 30, 2001
Termination Date: April 25, 2004, subject to adjustment in
accordance with the Business Day
Convention.
Fixed Amount (Premium):
Fixed Rate Payer: Counterparty
Cap Rate: 7.25000%
Fixed Rate Payer
Payment Date: August 13, 2001
Fixed Amount: USD 165,000
Floating Amounts:
Floating Rate Payer: BSFP
Floating Rate Payer
Period End Dates: The 25th calendar day of each month
during the Term of this Transaction,
commencing September 25, 2001 and
ending on the Termination Date, subject
to adjustment in accordance with the
Business Day Convention.
R-2
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
Floating Rate Payer
Payment Dates: The first Business Day preceding each
Period End Date during the Term of this
Transaction, commencing on the first
Business Day preceding September 25,
2001 and ending on the first Business Day
preceding the Termination Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Floating Rate Day
Count Fraction: Actua1/360
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York and London
Business Day Convention: Modified Following
Calculation Agent: BSFP
3. Additional Provisions: 1) Each party hereto is hereby advised and
acknowledges that the other party has engaged
in (or refrained from engaging in) substantial
financial transactions and has taken (or
refrained from taking) other material actions
in reliance upon the entry by the parties into the
Transaction being entered into on the terms and
conditions set forth herein and in the Confirmation
relating to such Transaction, as applicable. This
paragraph (1) shall be deemed repeated on the trade
date of each Transaction.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
R-3
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
Master Agreement will apply to any Transaction.
2) Termination Provisions. For purposes of the Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for
any purpose.
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for
any purpose, and, accordingly, Section 5(a)(v) shall not apply to
BSFP or Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP
or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to BSFP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
3) Tax Representations. Not applicable.
4) Limitation on Events of Default. Notwithstanding the terms of Sections 5
and 6 of this Agreement, if at any time and so long as the Counterparty has
satisfied in full all its payment obligations under Section 2(a)(i) of this
Agreement and has at the time no future payment obligations, whether absolute
or contingent, under such Section, then unless BSFP is required pursuant to
appropriate proceedings to return to the Counterparty or otherwise returns to
the Counterparty upon demand of the Counterparty any portion of any such
payment, (a) the occurrence of an event described in Section 5(a) of this
Agreement with respect to the Counterparty shall not constitute an Event of
Default or Potential Event of Default with respect to the Counterparty as
Defaulting Party and (b) BSFP shall be entitled to designate an Early
Termination Date pursuant to Section 6 of this Agreement only as a result of
the occurrence of a Termination Event set forth in either Section 5(b)(i) or
5(b)(ii) of this Agreement with respect to BSFP as the Affected Party.
R-4
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
5) Documents to be Delivered. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
Party required to deliver Form/Document/ Date by which to be
document Certificate delivered
BSFP and the Counterparty Any document required or Promptly after the earlier of (i)
reasonably requested to allow reasonable demand by either
the other party to make payments party or (ii) learning that such
under this Agreement without any form or document is required
deduction or withholding for or
on the account of any Tax or
with such deduction or withholding
at a reduced rate
(2) Other documents to be delivered are:
Party required to Form/Document/ Date by which to be Covered by Section 3(d)
deliver document Certificate delivered Representation
BSFP and the Counterparty Any documents required by the Upon the execution and Yes
receiving party to evidence the delivery of this
authority of the delivering Agreement and such
party or its Credit Support Confirmation
Provider, if any, for it to
execute and deliver this
Agreement, any Confirmation,
and any Credit Support Documents
to which it is a party, and to
evidence the authority of the
delivering party or its Credit
Support Provider to perform its
obligations under this Agreement,
such Confirmation and/or Credit
Support Document, as the case may be
R-5
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
BSFP and the Counterparty A certificate of an authorized Upon the execution and Yes
officer of the party, as to the delivery of this
incumbency and authority of the Agreement and such
respective officers of the party Confirmation
signing this Agreement, any
relevant Credit Support
Document, or any Confirmation,
as the case may be
(3) BSFP will provide a Legal Opinion.
6) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:
Address for notices or communications to BSFP:
Address: 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager-- Suite 1700
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to the Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000 0000
Phone: 000-000-0000
(b) Process Agent. For the purpose of Section 13(c):
R-6
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints
as its Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement; neither BSFP nor the Counterparty have any Offices other
than as set forth in the Notices Section and BSFP agrees that, for
purposes of Section 6(b) of this Agreement, it shall not in future
have any Office other than one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
BSFP is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP.
(f) Credit Support Document. Not applicable for either BSFP or the
Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the
law of the State of New York shall govern their rights and duties in whole.
(i) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue
in full force and effect as if this Agreement had been executed with the
invalid or unenforceable portion eliminated, so long as this Agreement as so
modified continues to express, without material change, the original
intentions of the parties as to the subject matter of this Agreement and the
deletion of such portion of this Agreement will not substantially impair the
respective benefits or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid
or enforceable term, provision, covenant or condition, the economic effect of
which comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
R-7
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and
all communications between officers or employees of the parties, waives any
further notice of such monitoring or recording, and agrees to notify its
officers and employees of such monitoring or recording.
(k) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(l) BSFP will not unreasonably withhold or delay its consent to an assignment
of this Agreement to any other third party.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, provided that BSFP shall not be deemed to have any
Affiliates for purposes of this Agreement, including for purposes of Section
6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each
date when it enters into a Transaction that:--
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written
or oral), other than the representations expressly made in this Agreement or
the Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and has made its own decision
to enter into the Transaction; and
(ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and conditions and
to assume those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.
Principal. It is entering into the Transaction as principal, and not as agent
or in any other capacity, fiduciary or otherwise.
R-8
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR
AFFILIATE OF THE BEAR XXXXXXX COMPANIES INC. OTHER THAN BSFP
IS AN OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: Payments to BSFP:
Citibank, N.A., New York
ABA Number: 000-0000-00, for the
account of Bear, Xxxxxxx Securities
Corp.
Account Number: 0925-3186, for
further credit to Bear Xxxxxxx
Financial Products Inc.
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
Payments to Counterparty:
[Please provide]
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions,
please contact Xxxxx Xxxxxx by telephone at 000-000-0000. For all other
inquiries please contact Xxxxx Xxxxxx by telephone at 000-0-000-0000.
Originals will be provided for your execution upon your request.
R-9
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: ____________________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By: ___________________________
Name:
Title:
(Authorized Signatory)
R-10
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
SCHEDULE OF NOTIONAL AMOUNTS
(all such dates subject to adjustment in accordance with the
Business Day Convention)
Applicable Notional
From and including To but excluding Amount (USD)
------------------ ---------------- --------------------
Effective Date 9/25/01 142,000,000.00
9/25/01 10/25/01 141,654,763.72
10/25/01 11/25/01 141,091,433.68
11/25/01 12/25/01 140,308,520.44
12/25/01 1/25/02 139,305,481.26
1/25/02 2/25/02 138,082,752.54
2/25/02 3/25/02 136,641,776.26
3/25/02 4/25/02 134,985,020.20
4/25/02 5/25/02 133,120,262.94
5/25/02 6/25/02 131,051,911.20
6/25/02 7/25/02 128,802,414.10
7/25/02 8/25/02 126,590,699.06
8/25/02 9/25/02 124,416,138.52
9/25/02 10/25/02 122,278,115.32
10/25/02 11/25/02 120,176,022.44
11/25/02 12/25/02 118,109,262.92
12/25/02 1/25/03 116,077,249.66
1/25/03 2/25/03 114,079,405.24
2/25/03 3/25/03 112,115,161.76
3/25/03 4/25/03 110,183,960.76
4/25/03 5/25/03 108,285,252.96
5/25/03 6/25/03 106,418,498.14
6/25/03 7/25/03 104,583,165.04
7/25/03 8/25/03 102,778,731.18
8/25/03 9/25/03 50,502,341.34
9/25/03 10/25/03 49,630,257.09
10/25/03 11/25/03 48,772,864.32
11/25/03 12/25/03 47,929,918.64
12/25/03 1/25/04 47,101,179.68
1/25/04 2/25/04 46,286,411.05
2/25/04 3/25/04 45,485,380.26
3/25/04 4/25/04 44,697,858.67
4/25/04 5/25/04 43,923,621.42
5/25/04 6/25/04 43,162,447.37
R-11
Reference Number: NCC4586
Countrywide Home Loans, Inc.
August 13, 2001
Page of 10
6/25/04 7/25/04 42,414,119.02
7/25/04 Termination Date 41,678,422.49
R-12
EXHIBIT S
[FORM OF CAP CONTRACT ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of August 30, 2001
("Assignment Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE
BANK OF NEW YORK, NOT IN AN INDIVIDUAL CAPACITY, BUT AS TRUSTEE FOR CWABS,
INC. ASSET-BACKED CERTIFICATES, SERIES 2001-BC3 ("Assignee"), pursuant to a
Pooling and Servicing Agreement dated as of August 1, 2001 among CWABS, Inc.,
as depositor, the Assignor, as seller and master servicer, the Assignee, as
trustee and BNY Western Trust Company, as co-trustee (the "Pooling and
Servicing Agreement"), and BEAR XXXXXXX FINANCIAL PRODUCTS INC. ("Remaining
Party").
W I T N E S S E T H:
WHEREAS, effective as of August 30, 2001, Assignor desires
to assign all of its rights and delegate all of its duties and obligations to
Assignee under that certain Transaction (the "Assigned Transaction") as
evidenced by that certain agreement dated August 13, 2001 constituting a
"Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement, and whose reference number is NCC4586 (the "Agreement"), a copy of
which is attached hereto as Exhibit I;
WHEREAS, Assignor and Remaining Party have executed and
delivered the Agreement in lieu of negotiating both an ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") and a
Schedule thereto;
WHEREAS, Assignee desires to accept the assignment of rights
and assume the delegation of duties and obligations of the Assignor under the
Assigned Transaction, including any modifications agreed to by the parties;
and
WHEREAS, Assignor desires to obtain the written consent of
Remaining Party to the assignment, delegation, and assumption and Remaining
Party desires to grant such consent in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. Assignment and Assumption. Effective as of and from August
30, 2001 (the "Effective Date"), Assignor hereby assigns all of its rights and
delegates all of its duties and
S-1
obligations to Assignee and Assignee hereby assumes all the Assignor's rights,
duties, and obligations under the Assigned Transaction arising on or after the
Effective Date.
2. Release. Effective as of and from the Effective Date,
Remaining Party and Assignor hereby release one another from all duties and
obligations owed under and in respect of the Assigned Transaction, and
Assignor hereby terminates its rights under and in respect of the Assigned
Transaction.
3. Limitation on Liability. Assignor and Remaining Party agree
to the following: (a) the sole recourse in respect of the obligations of the
Assignee hereunder and under the Assigned Transaction shall be to the Trust
Fund (as defined in the Pooling and Servicing Agreement); (b) The Bank of New
York ("BNY") is entering into this Assignment Agreement solely in its capacity
as trustee and not in its individual capacity under the Pooling and Servicing
Agreement; and (c) in no case shall BNY (or any person acting as successor
trustee under the Pooling and Servicing Agreement) be personally liable for or
on account of any of the statements, representations, warranties, covenants or
obligations stated to be those of Assignor under the terms of the Assigned
Transaction, all such liability, if any, being expressly waived by the
Assignor and the Remaining Party and any person claiming by, through or under
either such party.
4. Consent and Acknowledgment of Remaining Party. Remaining
Party hereby consents to the assignment and delegation by Assignor to Assignee
of all the rights, duties, and obligations of the Assignor under the Assigned
Transaction pursuant to this Assignment Agreement. In addition, Remaining
Party hereby acknowledges that the responsibilities of Assignee under the
Assigned Transaction will be performed on its behalf by Countrywide Home
Loans, Inc., as master servicer under the Pooling and Servicing Agreement.
5. Representations. Each party hereby represents and warrants to
the other parties as follows:
(a) It is duly organized, validly existing and in good standing
under the laws of its organization or incorporation;
(b) It has the power to execute and deliver this Assignment
Agreement; and
(c) Its obligations under this Assignment Agreement constitute
its legal, valid and binding obligations, enforceable in
accordance with their respective terms.
Each of Assignor and Remaining Party represent that no event
or condition has occurred that constitutes an Event of Default, a Potential
Event of Default or to the party's knowledge, a Termination Event (as such
terms are defined in the Agreement), with respect to the party, and no such
event would occur as a result of the party's entering into or performing its
obligations under this Assignment Agreement.
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6. Indemnity. Each of the Assignor and the Remaining Party
hereby agrees to indemnify and hold harmless the Assignee with respect to any
and all claims arising under the Assigned Transaction prior to the Effective
Date. Each of the Assignee (subject to the limitations set forth in paragraph
3 above) and the Remaining Party hereby agrees to indemnify and hold harmless
the Assignor with respect to any and all claims arising under the Assigned
Transaction on or after the Effective Date.
7. Governing Law. This Assignment Agreement shall be
governed by and construed in accordance with the laws of the State of New
York.
8. Notices. For the purposes of this Assignment Agreement
and Section 12(a) of the Assigned Transaction, the addresses for notices or
communications are as follows: (i) in the case of the Assignor, Countrywide
Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx Xxxxx, with a copy to the same address, Attention: Legal Department, or
such other address as may be hereafter furnished in writing to the Assignee
and the Remaining Party; (ii) in the case of the Assignee, The Bank of New
York, 000 Xxxxxxx Xxxxxx, 00X, Xxx Xxxx, Xxx Xxxx Attention: Corporate Trust
MBS Administration, CWABS, Series 2001-BC3, or such other address as may be
hereafter furnished in writing to the Assignor and the Remaining Party; and
(iii) in the case of the of the Remaining Party, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: DPC Manager - Suite 1700, facsimile (000) 000-0000,
with a copy to Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, facsimile
(000) 000-0000, or such other address as may be hereafter furnished in writing
to the Assignor and the Assignee.
9. Payments. All payments remitted by the Remaining Party
under the Assigned Transaction shall be made by wire transfer according to the
following instructions:
The Bank of New York,
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: TAS A/C 081770
Attn: Xxxxx X. Xxxxxxx (000) 000-0000
10. Counterparts. This Assignment Agreement may be executed
and delivered in counterparts (including by facsimile transmission), each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By: ______________________________
Name:
Title:
THE BANK OF NEW YORK, NOT IN AN INDIVIDUAL
CAPACITY, BUT AS TRUSTEE FOR CWABS, INC.
ASSET BACKED CERTIFICATES, SERIES 2001-BC3
By:_______________________________
Name:
Title:
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By:_______________________________
Name:
Title:
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