- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported) November 30, 1999
CWABS, INC. (as depositor under the Pooling and
Servicing Agreement, dated as of November 29, 1999,
providing for the issuance of the Countrywide Home Equity
Loan Trust 1999-D, Revolving Home Equity Loan Asset Backed
Certificates, Series 1999-D).
CWABS, INC.
-----------
(Exact name of registrant as specified in its charter)
Delaware 333-84365 95-4596514
- ---------------------------- ------------ -------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
4500 Park Granada
Calabasas, California 91302
- --------------------- ----------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (818) 225-3240
----- --------
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<PAGE>
Item 5. Other Events.
- ---- ------------
Description of the Certificates and the Mortgage Pool*
- -----------------------------------------------------
On November 30, 1999, CWABS, Inc. (the "Company") entered into a
Pooling and Servicing Agreement dated as of November 29, 1999 (the "Pooling
and Servicing Agreement"), by and among the Company, as depositor, Countrywide
Home Loans, Inc. ("CHL"), as sponsor and as master servicer, and Bank One,
National Association, as trustee (the "Trustee"), providing for the issuance
of the Company's Revolving Home Equity Loan Asset Backed Certificates, Series
1999-D. The Pooling and Servicing Agreement is annexed hereto as Exhibit 99.1.
In addition to the Pooling and Servicing Agreement, the Company and
CHL entered into a Purchase Agreement, dated as of November 29, 1999 (the
"Purchase Agreement"), providing for the purchase and sale of the Mortgage
Loans to be delivered pursuant to the Pooling and Servicing Agreement. The
Purchase Agreement is annexed hereto as Exhibit 99.2.
- ----------------------------
* Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Prospectus dated August 12, 1999 and
the Prospectus Supplement dated November 24, 1999, of CWABS, Inc.,
relating to its Asset- Backed Certificates, Series 1999-D.
<PAGE>
Mortgage Loan Statistics
------------------------
The following tables describe characteristics of the Mortgage Loans as
of the Cut-off Date. All percentages set forth below have been calculated based
on the principal balance of the Mortgage Loans as of the date set forth below.
The sum of the columns may not equal the respective totals due to rounding.
GROUP I MORTGAGE LOANS (CONFORMING COLLATERAL)
<TABLE>
SUMMARY OF LOANS IN STATISTIC CALCULATION POOL (AS OF STATISTICAL CALCULATION DATE)
<CAPTION>
<S> <C>
Aggregate Principal Balance: $320,000,003.66
Aggregate Credit Limit: $483,321,552.60
Weighted Average Coupon (Gross): 7.805%
Gross Coupon Range: 5.990% to 14.250%
Weighted Average Margin (Gross): 2.327%
Gross Margin Range: -1.750% to 7.625%
Weighted Average Maximum Rate: 17.844%
Maximum Rate Range: 12.000% to 18.000%
Average Principal Balance: $22,785.53
Principal Balance Range: $0.00 to $700,000.00
Average Credit Limit: $34,414.81
Credit Limit Range: $7,000.00 to $700,000.00
Weighted Average Remaining Term to Scheduled Maturity: 283.70 months
Remaining Term to Scheduled Maturity Range: 146 months to 302 months
Weighted Average Combined Loan-to-Value Ratio: 82.19%
Combined Loan-to-Value Ratio Range: 3.70% to 100.00%
Average Credit Utilization Rate: 85.29%
Credit Utilization Rate Range: 0.00% to 100.00%
Origination Period: 07/15/98 through 11/29/99
Percentage of Pool Secured by:
1st Liens 2.78%
Percentage of Pool Secured by:
2nd Lien 97.22%
Weighted Average Months to First Roll: 4.99 months
Weighted Average Fico: 709.64
Fico Range: 593 to 828
Weighted Average Second Mortgage Ratio: 26.04%
Second Mortgage Ratio Range: 0.24% to 100.00%
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 Yr Draw, 10 Yr Repay $4,187,738 238 1.31 $17,596 6.750 11.000 7.275 6.775 237.94 2.06 80.8
10 Yr Draw, 15 Yr Repay $279,385,097 12,907 87.31 $21,646 5.990 13.000 7.402 6.902 298.09 1.99 81.2
15 Yr Draw, 0 Yr Repay $2,761,487 77 0.86 $35,863 5.990 14.250 8.712 8.212 178.23 1.77 85.2
15 Yr Draw, 10 Yr Repay $2,247,057 51 0.70 $44,060 5.990 11.500 7.429 6.929 298.18 1.82 76.3
3 Yr Draw, 10 Yr Repay $3,606,176 94 1.13 $38,364 5.990 12.750 6.796 6.296 153.95 2.05 96.5
5 Yr Draw, 10 Yr Repay $27,812,449 677 8.69 $41,082 5.990 14.000 11.996 11.496 172.17 7.78 91.0
- -----------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
RANGE OF CURRENT BALANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 to $ 10,000 $26,792,322 4,444 8.37 $6,029 5.990 14.000 7.350 6.850 296.14 1.91 79.0
$ 10,000.01 to $ 20,000 $64,389,270 4,209 20.12 $15,298 5.990 13.750 7.399 6.899 292.73 2.23 82.9
$ 20,000.01 to $ 30,000 $60,208,311 2,388 18.82 $25,213 5.990 14.250 7.560 7.060 288.48 2.33 83.3
$ 30,000.01 to $ 40,000 $39,686,815 1,127 12.40 $35,215 5.990 14.000 7.827 7.327 281.91 2.54 84.0
$ 40,000.01 to $ 50,000 $33,006,091 722 10.31 $45,715 5.990 14.000 8.337 7.837 269.55 3.15 84.5
$ 50,000.01 to $ 60,000 $19,454,928 351 6.08 $55,427 5.990 13.750 8.059 7.559 279.86 2.72 83.1
$ 60,000.01 to $ 70,000 $12,487,516 191 3.90 $65,380 5.990 13.500 8.036 7.536 278.53 2.61 82.4
$ 70,000.01 to $ 80,000 $13,299,530 177 4.16 $75,139 5.990 13.500 7.950 7.450 272.82 2.76 80.2
$ 80,000.01 to $ 90,000 $10,715,004 125 3.35 $85,720 5.990 13.500 8.044 7.544 279.56 2.66 82.4
$ 90,000.01 to $100,000 $16,702,567 171 5.22 $97,676 5.990 14.000 8.609 8.109 276.03 2.54 80.9
$100,000.01 to $125,000 $6,778,804 60 2.12 $112,980 5.990 14.000 8.106 7.606 273.18 2.58 78.4
$125,000.01 to $150,000 $3,086,095 22 0.96 $140,277 7.000 13.000 8.299 7.799 275.65 2.86 83.1
$150,000.01 to $175,000 $3,101,201 19 0.97 $163,221 7.000 13.250 8.179 7.679 274.83 3.05 75.5
$175,000.01 to $200,000 $3,065,056 16 0.96 $191,566 7.000 13.250 8.626 8.126 267.45 3.41 77.5
$200,000.01 to $225,000 $634,800 3 0.20 $211,600 5.990 7.250 6.821 6.321 299.98 0.68 80.0
$225,000.01 to $250,000 $1,437,090 6 0.45 $239,515 7.250 13.000 10.084 9.584 236.44 3.52 76.1
$275,000.01 to $300,000 $576,544 2 0.18 $288,272 7.250 9.000 8.089 7.589 298.00 2.00 68.4
$300,000.01 to $325,000 $949,000 3 0.30 $316,333 7.250 7.250 7.250 6.750 298.00 2.00 72.4
$325,000.01 to $350,000 $699,998 2 0.22 $349,999 7.250 7.250 7.250 6.750 298.00 2.00 63.4
$375,000.01 to $400,000 $394,868 1 0.12 $394,868 10.750 10.750 10.750 10.250 171.00 9.00 70.6
$400,000.01 to $425,000 $419,194 1 0.13 $419,194 7.250 7.250 7.250 6.750 297.00 3.00 60.5
$425,000.01 to $450,000 $450,000 1 0.14 $450,000 7.250 7.250 7.250 6.750 298.00 2.00 62.5
$450,000.01 to $475,000 $465,000 1 0.15 $465,000 7.250 7.250 7.250 6.750 298.00 2.00 80.0
$475,000.01 to $500,000 $500,000 1 0.16 $500,000 7.250 7.250 7.250 6.750 298.00 2.00 44.4
$675,000.01 to $700,000 $700,000 1 0.22 $700,000 6.990 6.990 6.990 6.490 298.00 2.00 64.5
- -----------------------------------------------------------------------------------------------------------------------------------
$22,786 $320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
STATE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AK $705,045 29 0.22 $24,312 7.000 11.125 7.372 6.872 298.40 1.60 78.0
AL $4,068,413 240 1.27 $16,952 6.750 11.000 7.286 6.786 298.27 1.73 83.2
AZ $8,874,211 441 2.77 $20,123 5.990 13.250 7.750 7.250 287.92 2.55 82.3
CA $102,447,664 3,198 32.01 $32,035 5.990 14.000 8.478 7.978 268.27 3.27 81.0
CO $18,006,146 718 5.63 $25,078 5.990 13.500 7.588 7.088 291.88 2.08 81.1
CT $2,826,751 129 0.88 $21,913 6.750 11.625 7.313 6.813 298.07 1.93 81.0
DC $297,366 7 0.09 $42,481 7.000 7.250 7.166 6.666 297.66 2.34 83.5
DE $461,144 20 0.14 $23,057 7.000 7.250 7.161 6.661 297.64 2.36 88.5
FL $11,709,625 605 3.66 $19,355 5.990 14.000 7.708 7.208 290.82 2.42 82.2
GA $6,758,622 338 2.11 $19,996 6.750 13.500 7.549 7.049 294.33 2.25 83.7
HI $1,972,453 84 0.62 $23,482 6.750 11.875 7.789 7.289 297.52 2.48 84.4
IA $594,324 47 0.19 $12,645 7.000 8.500 7.195 6.695 298.42 1.58 83.0
ID $2,960,871 163 0.93 $18,165 5.990 13.500 7.746 7.246 289.49 2.46 85.1
IL $11,581,972 573 3.62 $20,213 5.990 12.500 7.387 6.887 296.69 1.89 82.1
IN $4,043,786 226 1.26 $17,893 6.750 11.000 7.271 6.771 298.28 1.72 85.8
KS $3,355,705 170 1.05 $19,739 7.000 11.000 7.336 6.836 296.97 2.08 86.2
KY $1,223,131 63 0.38 $19,415 7.000 7.500 7.207 6.707 297.88 2.12 84.0
LA $2,642,975 137 0.83 $19,292 6.750 12.250 7.322 6.822 298.00 2.00 82.1
MA $8,334,694 431 2.60 $19,338 5.990 13.000 7.474 6.974 295.83 1.95 78.7
MD $4,353,389 233 1.36 $18,684 6.750 14.000 7.484 6.984 290.71 2.44 86.9
ME $701,386 44 0.22 $15,941 6.750 9.250 7.299 6.799 297.92 2.08 83.0
MI $22,193,839 1,073 6.94 $20,684 5.990 14.250 7.311 6.811 277.16 1.89 84.2
MN $2,958,976 157 0.92 $18,847 7.000 7.500 7.197 6.697 298.05 1.95 84.5
MO $4,335,766 246 1.35 $17,625 6.750 11.625 7.291 6.791 296.92 1.98 86.7
MS $817,889 52 0.26 $15,729 7.000 11.000 7.451 6.951 297.71 2.29 82.7
MT $1,202,088 74 0.38 $16,244 5.990 11.375 7.290 6.790 293.48 1.73 76.1
NC $4,824,768 289 1.51 $16,695 6.750 11.250 7.343 6.843 297.83 2.17 86.0
ND $73,759 5 0.02 $14,752 7.000 7.250 7.225 6.725 297.71 2.29 79.2
NE $1,227,045 64 0.38 $19,173 7.000 10.000 7.255 6.755 298.00 2.00 85.4
NH $1,605,080 82 0.50 $19,574 5.990 11.125 7.218 6.718 296.41 2.25 80.8
NJ $8,898,272 415 2.78 $21,442 5.990 11.375 7.311 6.811 293.91 2.10 79.7
NM $2,114,035 112 0.66 $18,875 5.990 12.750 7.478 6.978 293.92 2.13 86.7
NV $4,035,116 181 1.26 $22,293 6.750 13.500 7.977 7.477 281.60 2.97 85.0
NY $8,363,439 350 2.61 $23,896 5.990 12.250 7.614 7.114 297.17 1.96 78.5
OH $7,136,365 443 2.23 $16,109 7.000 11.250 7.314 6.814 297.44 2.06 84.9
OK $3,431,703 191 1.07 $17,967 7.000 11.000 7.305 6.805 298.25 1.75 85.1
OR $5,961,929 293 1.86 $20,348 6.750 13.000 7.438 6.938 296.92 1.99 79.5
PA $7,724,265 430 2.41 $17,963 6.750 13.000 7.354 6.854 297.20 2.06 85.1
RI $349,079 31 0.11 $11,261 7.000 9.750 7.294 6.794 297.54 2.46 82.2
SC $2,131,118 124 0.67 $17,186 7.000 10.625 7.284 6.784 297.99 2.01 87.2
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SD $247,325 19 0.08 $13,017 6.750 12.125 7.329 6.829 298.04 1.96 81.2
TN $4,187,738 238 1.31 $17,596 6.750 11.000 7.275 6.775 237.94 2.06 80.8
TX $317,680 8 0.10 $39,710 7.250 11.000 8.021 7.521 298.32 1.68 90.0
UT $5,892,545 270 1.84 $21,824 5.990 13.250 7.918 7.418 286.42 2.42 83.9
VA $4,081,524 224 1.28 $18,221 6.750 13.000 7.850 7.350 279.45 2.77 84.3
VT $216,843 15 0.07 $14,456 7.000 9.875 7.149 6.649 297.25 2.75 79.0
WA $13,447,716 552 4.20 $24,362 6.750 13.000 7.786 7.286 288.85 2.46 81.7
WI $2,854,130 153 0.89 $18,654 6.750 11.375 7.467 6.967 298.03 1.97 83.7
WY $1,450,300 57 0.45 $25,444 5.990 12.000 7.045 6.545 296.59 1.79 73.3
- -----------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
RANGE OF COMBINED LOAN-TO-VALUE RATIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<=10.00 $224,308 16 0.07 $14,019 5.990 10.000 7.369 6.869 296.36 1.63 8.3
10.01-20.00 $952,642 41 0.30 $23,235 5.990 11.000 7.563 7.063 293.62 2.10 15.6
20.01-30.00 $1,918,594 78 0.60 $24,597 5.990 11.250 7.734 7.234 296.02 1.69 24.8
30.01-40.00 $4,234,851 205 1.32 $20,658 5.990 11.000 7.441 6.941 298.25 1.79 35.3
40.01-50.00 $7,247,086 340 2.26 $21,315 6.750 11.125 7.449 6.949 294.92 2.10 45.8
50.01-60.00 $12,142,000 524 3.79 $23,172 5.990 11.125 7.610 7.110 296.99 2.05 55.6
60.01-70.00 $38,817,836 1,748 12.13 $22,207 5.990 11.875 7.492 6.992 296.13 2.04 66.9
70.01-80.00 $65,305,708 2,871 20.41 $22,747 5.990 12.750 7.480 6.980 290.84 2.28 78.0
80.01-90.00 $114,184,067 5,412 35.68 $21,098 5.990 14.250 7.944 7.444 284.59 2.50 88.5
90.01-100.00 $74,972,911 2,809 23.43 $26,690 5.990 14.000 8.128 7.628 265.14 3.08 97.2
- -----------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
RANGE OF CURRENT GROSS COUPON
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5.501-6.000 $5,817,303 165 1.82 $35,256 5.990 5.999 5.990 5.490 238.73 1.85 84.1
6.501-7.000 $54,505,646 2,713 17.03 $20,091 6.750 7.000 6.989 6.489 294.66 3.38 81.3
7.001-7.500 $211,108,926 9,817 65.97 $21,504 7.250 7.500 7.256 6.756 295.58 1.65 82.0
7.501-8.000 $221,877 6 0.07 $36,979 7.990 8.000 7.992 7.492 280.05 1.16 88.2
8.001-8.500 $272,521 8 0.09 $34,065 8.250 8.500 8.342 7.842 262.95 5.12 76.7
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
RANGE OF CURRENT GROSS COUPON
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8.501 - 9.000 $2,407,566 64 0.75 $37,618 8.625 9.000 8.913 8.413 291.62 1.88 62.0
9.001 - 9.500 $4,546,444 128 1.42 $35,519 9.125 9.500 9.300 8.800 271.39 2.70 72.0
9.501 - 10.000 $4,202,479 138 1.31 $30,453 9.625 10.000 9.883 9.383 289.72 2.34 66.0
10.001 - 10.500 $1,370,344 49 0.43 $27,966 10.125 10.500 10.300 9.800 255.86 3.77 72.4
10.501 - 11.000 $8,695,069 276 2.72 $31,504 10.625 11.000 10.836 10.336 265.01 3.47 83.8
11.001 - 11.500 $5,139,659 157 1.61 $32,737 11.125 11.500 11.399 10.899 212.64 5.59 89.4
11.501 - 12.000 $5,458,702 144 1.71 $37,908 11.625 12.000 11.911 11.411 199.52 6.42 93.5
12.001 - 12.500 $6,833,734 168 2.14 $40,677 12.125 12.500 12.477 11.977 173.45 7.73 91.1
12.501 - 13.000 $7,091,497 161 2.22 $44,047 12.750 13.000 12.970 12.470 172.46 7.99 90.3
13.001 - 13.500 $1,888,320 40 0.59 $47,208 13.250 13.500 13.387 12.887 172.55 7.45 92.9
13.501 - 14.000 $417,716 9 0.13 $46,413 13.750 14.000 13.922 13.422 172.66 7.34 92.8
14.001 - 14.500 $22,200 1 0.01 $22,200 14.250 14.250 14.250 13.750 178.00 2.00 89.4
- ------------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- -------------------------------------------------------------------------------
PROPERTY TYPE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SinglFam $259,876,678 11,574 81.21 $22,453 5.990 14.250 7.778 7.278 283.97 2.47 82.2
PUD $43,224,079 1,655 13.51 $26,117 5.990 14.000 7.891 7.391 283.53 2.57 83.2
Lo Condo $13,651,159 669 4.27 $20,405 5.990 13.500 8.156 7.656 275.94 2.83 80.9
2-4 Units $3,248,087 146 1.02 $22,247 5.990 10.250 7.306 6.806 296.98 1.84 74.9
- ------------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
LIEN PRIORITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1st Liens $8,905,812 179 2.78 $49,753 5.990 11.875 7.734 7.234 295.51 1.88 57.9
2nd Liens $311,094,192 13,865 97.22 $22,437 5.990 14.250 7.807 7.307 283.36 2.51 82.9
- ------------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
RANGE OF MARGIN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -0.125 $47,000 1 0.01 $47,000 7.250 7.250 7.250 6.750 300.00 0.00 38.7
- -1.75 $0 1 0.00 $0 7.250 7.250 7.250 6.750 298.00 2.00 54.2
0.000 $16,395,455 665 5.12 $24,655 5.990 8.250 7.200 6.700 296.50 1.94 57.7
0.001 - 0.250 $4,292,073 163 1.34 $26,332 5.990 8.500 7.212 6.712 297.60 2.26 59.2
0.251 - 0.500 $19,756,168 699 6.17 $28,263 5.990 9.000 7.231 6.731 296.64 2.05 76.3
0.501 - 0.750 $20,421,072 1,090 6.38 $18,735 5.990 9.000 7.318 6.818 297.44 2.06 59.8
0.751 - 1.000 $12,039,485 527 3.76 $22,845 5.990 9.375 7.682 7.182 287.47 2.31 64.1
1.001 - 1.250 $33,429,032 1,571 10.45 $21,279 5.990 9.750 7.294 6.794 296.47 2.12 75.1
1.251 - 1.500 $3,914,822 173 1.22 $22,629 5.990 10.000 7.823 7.323 287.52 2.19 72.4
1.501 - 1.750 $4,228,510 137 1.32 $30,865 5.990 10.250 9.225 8.725 291.85 1.95 70.2
1.751 - 2.000 $31,035,365 1,609 9.70 $19,289 5.990 10.375 7.283 6.783 294.89 1.97 82.1
2.001 - 2.250 $13,317,893 563 4.16 $23,655 5.990 10.500 7.242 6.742 295.20 2.17 87.5
2.251 - 2.500 $11,608,668 360 3.63 $32,246 5.990 11.000 8.511 8.011 275.90 2.06 88.8
2.501 - 2.750 $21,763,259 1,141 6.80 $19,074 5.990 11.250 7.985 7.485 290.44 2.20 87.8
2.751 - 3.000 $30,290,955 1,303 9.47 $23,247 5.990 11.375 7.363 6.863 290.83 2.07 88.2
3.001 - 3.250 $14,317,317 567 4.47 $25,251 5.990 11.750 8.236 7.736 267.20 3.02 95.6
3.251 - 3.500 $14,167,164 522 4.43 $27,140 5.990 11.875 7.645 7.145 281.36 2.09 95.6
3.501 - 3.750 $18,680,611 896 5.84 $20,849 5.990 12.000 8.195 7.695 267.39 3.15 90.1
3.751 - 4.000 $6,719,417 326 2.10 $20,612 5.990 12.250 7.585 7.085 278.82 2.96 95.7
4.001 - 4.250 $17,367,058 683 5.43 $25,428 5.990 12.500 9.098 8.598 251.20 4.05 95.0
4.251 - 4.500 $10,282,486 433 3.21 $23,747 5.990 12.750 7.638 7.138 281.66 2.35 95.2
4.501 - 4.750 $6,970,841 196 2.18 $35,566 5.990 13.000 12.387 11.887 185.15 7.63 91.6
4.751 - 5.000 $1,813,494 87 0.57 $20,845 5.990 13.250 9.864 9.364 214.30 4.75 95.1
5.001 - 5.250 $5,196,847 222 1.62 $23,409 6.750 13.500 8.431 7.931 272.61 3.64 97.4
5.251 - 5.500 $964,434 42 0.30 $22,963 5.990 13.750 8.080 7.580 271.99 3.12 96.8
5.501 - 5.750 $332,944 6 0.10 $55,491 5.990 14.000 12.893 12.393 189.26 7.32 92.2
5.751 - 6.000 $555,869 52 0.17 $10,690 7.000 14.250 7.485 6.985 289.24 2.73 98.4
6.001 - 6.250 $51,603 5 0.02 $10,321 7.250 7.250 7.250 6.750 297.79 2.21 97.7
6.751 - 7.000 $30,000 2 0.01 $15,000 7.000 7.000 7.000 6.500 297.00 3.00 33.2
7.251 - 7.500 $10,163 1 0.00 $10,163 7.000 7.000 7.000 6.500 297.00 3.00 77.0
7.501 - 7.750 $0 1 0.00 $0 7.000 7.000 7.000 6.500 236.00 4.00 83.1
- -----------------------------------------------------------------------------------------------------------------------------------
2.327 $320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
RANGE OF CREDIT LIMIT UTILIZATION RATES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.00% $0 962 0.00 $0 5.990 13.500 7.529 7.029 290.87 2.35 77.3
0.01% - 10.00% $1,068,711 288 0.33 $3,711 5.990 14.000 7.533 7.033 296.82 2.07 68.7
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
RANGE OF CREDIT LIMIT UTILIZATION RATES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10.01% - 20.00% $3,252,844 389 1.02 $8,362 5.990 13.250 7.631 7.131 293.63 1.99 71.9
20.01% - 30.00% $7,187,974 648 2.25 $11,093 6.750 13.000 7.463 6.963 294.81 2.04 72.6
30.01% - 40.00% $9,633,600 763 3.01 $12,626 5.990 13.000 7.440 6.940 294.25 2.02 74.8
40.01% - 50.00% $13,949,127 1,107 4.36 $12,601 5.990 13.250 7.425 6.925 294.64 2.01 76.0
50.01% - 60.00% $14,269,326 813 4.46 $17,551 5.990 13.000 7.419 6.919 295.07 2.07 76.8
60.01% - 70.00% $18,430,103 991 5.76 $18,597 5.990 13.000 7.388 6.888 292.53 2.29 79.0
70.01% - 80.00% $23,697,812 1,007 7.41 $23,533 5.990 13.500 7.574 7.074 289.53 2.39 80.3
80.01% - 90.00% $25,195,945 917 7.87 $27,476 5.990 13.500 7.516 7.016 289.16 2.61 81.6
90.01%-100.00% $203,314,562 6,159 63.54 $33,011 5.990 14.250 7.992 7.492 278.87 2.62 84.5
- ------------------------------------------------------------------------------------------------------------------------------------
85.29% $320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
MAXIMUM RATES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12.000 $777,222 39 0.24 $19,929 6.750 9.250 7.077 6.577 236.46 3.54 83.3
12.250 $3,204,592 188 1.00 $17,046 7.000 11.000 7.318 6.818 238.20 1.80 80.0
12.500 $143,850 7 0.04 $20,550 7.250 7.500 7.403 6.903 240.00 0.00 80.6
15.000 $1,162,091 72 0.36 $16,140 6.750 11.375 7.317 6.817 298.24 1.76 75.4
16.000 $4,894,768 291 1.53 $16,821 6.750 11.250 7.388 6.888 297.83 2.17 85.6
17.000 $12,777,296 608 3.99 $21,015 5.990 12.750 7.443 6.943 294.51 2.08 80.8
18.000 $297,040,184 12,839 92.83 $23,136 5.990 14.250 7.836 7.336 283.58 2.53 82.2
- ------------------------------------------------------------------------------------------------------------------------------------
17.844 $320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
RANGE OF MONTHS REMAINING TO SCHEDULED MATURITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
145-156 $3,669,343 95 1.15 $38,625 5.990 12.750 6.783 6.283 153.90 2.10 96.5
157-168 $1,080,392 34 0.34 $31,776 9.250 14.000 12.403 11.903 167.99 12.01 93.2
169-180 $29,430,377 719 9.20 $40,932 5.990 14.250 11.685 11.185 172.94 7.06 90.3
229-240 $4,187,738 238 1.31 $17,596 6.750 11.000 7.275 6.775 237.94 2.06 80.8
289-300 $278,255,951 12,815 86.95 $21,713 5.990 13.000 7.403 6.903 298.04 2.02 81.2
301-312 $3,376,203 143 1.06 $23,610 5.990 10.750 7.401 6.901 302.00 0.00 79.0
- ------------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
ORIGINATION YEAR
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $2,907,015 85 0.91 $34,200 9.250 14.000 12.336 11.836 168.76 11.24 92.4
1999 $317,092,989 13,959 99.09 $22,716 5.990 14.250 7.763 7.263 284.75 2.41 82.1
- ------------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
DELINQUENCY STATUS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT $320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
- -----------------------------------------------------------------------------------------------------------------------------------
$320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
===================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
RANGE OF CREDIT LIMIT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 to $ 10,000 $3,823,377 537 1.19 $7,120 5.990 13.250 7.401 6.901 294.42 2.14 85.2
$ 10,000.01 to $ 20,000 $55,544,790 4,759 17.36 $11,672 5.990 13.750 7.376 6.876 292.99 2.17 83.4
$ 20,000.01 to $ 30,000 $64,161,190 3,647 20.05 $17,593 5.990 14.250 7.499 6.999 289.71 2.28 83.6
$ 30,000.01 to $ 40,000 $42,120,585 1,669 13.16 $25,237 5.990 14.000 7.766 7.266 283.77 2.44 84.9
$ 40,000.01 to $ 50,000 $39,055,396 1,294 12.20 $30,182 5.990 14.000 8.206 7.706 272.37 3.05 83.1
$ 50,000.01 to $ 60,000 $20,450,819 534 6.39 $38,297 5.990 13.750 7.974 7.474 281.79 2.60 83.0
$ 60,000.01 to $ 70,000 $14,291,560 333 4.47 $42,918 5.990 13.500 7.996 7.496 281.38 2.59 83.8
$ 70,000.01 to $ 80,000 $14,072,426 306 4.40 $45,988 5.990 13.500 7.897 7.397 275.27 2.61 81.0
$ 80,000.01 to $ 90,000 $11,116,075 208 3.47 $53,443 5.990 13.500 8.057 7.557 279.13 2.61 84.2
$ 90,000.01 to $100,000 $27,162,101 491 8.49 $55,320 5.990 14.000 8.314 7.814 280.29 2.54 76.7
$100,000.01 to $125,000 $6,770,269 82 2.12 $82,564 5.990 14.000 7.896 7.396 276.68 2.50 76.7
$125,000.01 to $150,000 $5,206,227 67 1.63 $77,705 5.990 13.000 8.102 7.602 279.19 2.80 79.9
$150,000.01 to $175,000 $3,135,285 26 0.98 $120,588 5.990 13.250 8.045 7.545 276.97 2.84 75.3
$175,000.01 to $200,000 $4,120,591 41 1.29 $100,502 6.750 13.250 8.583 8.083 267.37 3.27 75.3
$200,000.01 to $225,000 $664,914 9 0.21 $73,879 7.000 7.250 7.232 6.732 300.25 0.38 76.4
$225,000.01 to $250,000 $1,990,940 12 0.62 $165,912 7.000 13.000 9.274 8.774 253.48 3.18 74.8
$250,000.01 to $275,000 $413,672 2 0.13 $206,836 5.990 7.250 6.592 6.092 297.52 2.48 76.6
$275,000.01 to $300,000 $803,634 9 0.25 $89,293 7.000 10.750 8.091 7.591 298.25 1.75 70.2
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
RANGE OF CREDIT LIMIT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT # OF % OF AVERAGE MIN MAX GROSS NET REMG. AGE ORIG
BALANCE LOANS TOTAL BALANCE WAC WAC WAC WAC TERM CLTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$300,000.01 to $325,000 $759,000 3 0.24 $253,000 7.250 7.250 7.250 6.750 298.00 2.00 74.8
$325,000.01 to $350,000 $790,470 4 0.25 $197,618 7.250 9.250 7.250 6.750 298.00 2.00 64.2
$350,000.01 to $375,000 $0 1 0.00 $0 7.250 7.250 7.250 6.750 297.00 3.00 70.0
$375,000.01 to $400,000 $844,488 3 0.26 $281,496 7.250 10.750 8.887 8.387 238.62 5.27 69.8
$450,000.01 to $475,000 $465,000 1 0.15 $465,000 7.250 7.250 7.250 6.750 298.00 2.00 80.0
$475,000.01 to $500,000 $1,537,194 4 0.48 $384,299 7.250 7.250 7.250 6.750 297.62 2.38 56.1
$625,000.01 to $650,000 $0 1 0.00 $0 7.250 7.250 7.250 6.750 298.00 2.00 54.2
$675,000.01 to $700,000 $700,000 1 0.22 $700,000 6.990 6.990 6.990 6.490 298.00 2.00 64.5
- ------------------------------------------------------------------------------------------------------------------------------------
$34,415 $320,000,004 14,044 100.00 $22,786 5.990 14.250 7.805 7.305 283.70 2.49 82.2
====================================================================================================================================
</TABLE>
GROUP II MORTGAGE LOANS (CONFORMING AND NON-CONFORMING COLLATERAL)
------------------------------------------------------------------
<TABLE>
SUMMARY OF LOANS IN STATISTIC CALCULATION POOL (AS OF STATISTICAL CALCULATION DATE)
<CAPTION>
<S> <C>
Aggregate Principal Balance: $120,000,104.86
Aggregate Credit Limit: $155,497,030.58
Weighted Average Coupon (Gross): 8.076%
Gross Coupon Range: 5.990% to 14.000%
Weighted Average Margin (Gross): 2.262%
Gross Margin Range: 0.000% to 7.252%
Weighted Average Maximum Rate: 17.934%
Maximum Rate Range: 12.000% to 18.000%
Average Principal Balance: $34,502.62
Principal Balance Range: $0.00 to $800,000.00
Average Credit Limit: $44,708.75
Credit Limit Range: $7,300.00 to $800,000.00
Weighted Average Remaining Term to Scheduled Maturity: 277.99 months
Remaining Term to Scheduled Maturity Range: 149 months to 302 months
Weighted Average Combined Loan-to-Value Ratio: 81.47%
Combined Loan-to-Value Ratio Range: 10.00% to 100.00%
Average Credit Utilization Rate: 89.73%
Credit Utilization Rate Range: 0.00% to 100.00%
Origination Period: 08/26/98 through 11/29/99
Percentage of Pool Secured by:
1st Liens 2.17%
Percentage of Pool Secured by:
2nd Lien 97.83%
Weighted Average Months to First Roll: 4.63 months
Weighted Average Fico: 709.69
Fico Range: 620 to 829
Weighted Average Second Mortgage Ratio: 30.33%
Second Mortgage Ratio Range: 3.70% to 100.00%
</TABLE>
<PAGE>
<TABLE>
DESCRIPTION
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 Yr Draw, 10 Yr Repay $129,369 5 0.11 $25,874 7.000 10.000
10 Yr Draw, 15 Yr Repay $100,484,690 2,999 83.74 $33,506 5.990 13.500
15 Yr Draw, 0 Yr Repay $669,268 15 0.56 $44,618 5.990 11.500
15 Yr Draw, 10 Yr Repay $368,300 5 0.31 $73,660 5.990 12.250
3 Yr Draw, 10 Yr Repay $884,039 19 0.74 $46,528 5.990 13.500
5 Yr Draw, 10 Yr Repay $17,464,437 435 14.55 $40,148 5.990 14.000
- -------------------------------------------------------------------------------------------------------------------------------
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
10 Yr Draw, 10 Yr Repay 7.556 7.056 237.56 2.44 85.2
10 Yr Draw, 15 Yr Repay 7.425 6.925 298.10 1.99 80.0
15 Yr Draw, 0 Yr Repay 7.189 6.689 179.01 0.99 84.5
15 Yr Draw, 10 Yr Repay 7.431 6.931 299.36 0.64 80.9
3 Yr Draw, 10 Yr Repay 7.959 7.459 154.64 1.36 96.2
5 Yr Draw, 10 Yr Repay 11.875 11.375 172.14 7.86 89.2
- ---------------------------------------------------------------------------------------------------------------
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<TABLE>
RANGE OF CURRENT BALANCE
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 0.00 to $10,000 $5,337,432 830 4.45 $6,431 5.990 13.500
$ 10,000.01 to $20,000 $14,111,607 918 11.76 $15,372 5.990 13.500
$ 20,000.01 to $30,000 $14,753,702 582 12.29 $25,350 5.990 13.500
$ 30,000.01 to $40,000 $11,686,084 329 9.74 $35,520 5.990 14.000
$ 40,000.01 to $50,000 $11,433,516 251 9.53 $45,552 5.990 13.500
$ 50,000.01 to $60,000 $8,073,486 146 6.73 $55,298 5.990 13.500
$ 60,000.01 to $70,000 $4,757,287 73 3.96 $65,168 5.990 14.000
$ 70,000.01 to $80,000 $4,900,367 65 4.08 $75,390 5.990 13.500
$ 80,000.01 to $90,000 $2,961,384 35 2.47 $84,611 7.000 14.000
$ 90,000.01 to $100,000 $7,019,823 72 5.85 $97,498 5.990 14.000
$100,000.01 to $125,000 $4,028,971 35 3.36 $115,113 5.990 13.750
$125,000.01 to $150,000 $7,677,697 54 6.40 $142,180 6.990 13.000
$150,000.01 to $175,000 $2,557,790 16 2.13 $159,862 7.000 12.500
$175,000.01 to $200,000 $4,291,087 22 3.58 $195,049 6.990 7.500
$200,000.01 to $225,000 $844,759 4 0.70 $211,190 7.000 7.250
$225,000.01 to $250,000 $2,203,334 9 1.84 $244,815 7.000 7.500
$250,000.01 to $275,000 $1,835,757 7 1.53 $262,251 7.000 7.250
$275,000.01 to $300,000 $3,495,052 12 2.91 $291,254 5.990 10.750
$300,000.01 to $325,000 $617,100 2 0.51 $308,550 7.250 7.250
$325,000.01 to $350,000 $350,000 1 0.29 $350,000 7.250 7.250
$375,000.01 to $400,000 $2,362,520 6 1.97 $393,753 6.750 13.500
$400,000.01 to $425,000 $415,647 1 0.35 $415,647 7.250 7.250
$425,000.01 to $450,000 $448,000 1 0.37 $448,000 7.000 7.000
$450,000.01 to $475,000 $912,702 2 0.76 $456,351 7.250 9.250
$475,000.01 to $500,000 $1,500,000 3 1.25 $500,000 7.000 7.250
$600,000.01 to $625,000 $625,000 1 0.52 $625,000 7.250 7.250
$775,000.01 to $800,000 $800,000 1 0.67 $800,000 7.250 7.250
===============================================================================================================================
$34,503 $120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
$ 0.00 to $10,000 7.468 6.968 294.66 2.49 80.6
$ 10,000.01 to $20,000 7.726 7.226 286.37 2.85 84.6
$ 20,000.01 to $30,000 7.980 7.480 279.86 3.20 84.3
$ 30,000.01 to $40,000 8.598 8.098 265.94 3.69 85.6
$ 40,000.01 to $50,000 9.051 8.551 253.31 4.14 86.5
$ 50,000.01 to $60,000 8.098 7.598 276.88 2.59 85.5
$ 60,000.01 to $70,000 8.264 7.764 270.07 2.97 86.5
$ 70,000.01 to $80,000 8.396 7.896 261.59 2.96 87.6
$ 80,000.01 to $90,000 8.492 7.992 274.90 3.15 85.5
$ 90,000.01 to $100,000 8.623 8.123 274.09 2.67 80.0
$100,000.01 to $125,000 8.440 7.940 277.68 2.86 77.8
$125,000.01 to $150,000 7.636 7.136 291.24 2.01 79.4
$150,000.01 to $175,000 8.233 7.733 276.05 1.46 75.6
$175,000.01 to $200,000 7.216 6.716 292.99 1.42 71.5
$200,000.01 to $225,000 7.187 6.687 299.25 0.75 77.9
$225,000.01 to $250,000 7.278 6.778 298.99 1.01 74.7
$250,000.01 to $275,000 7.214 6.714 298.00 2.00 66.0
$275,000.01 to $300,000 7.330 6.830 288.36 1.66 72.0
$300,000.01 to $325,000 7.250 6.750 298.51 1.49 66.4
$325,000.01 to $350,000 7.250 6.750 300.00 0.00 77.4
$375,000.01 to $400,000 8.275 7.775 277.96 2.43 71.2
$400,000.01 to $425,000 7.250 6.750 297.00 3.00 51.0
$425,000.01 to $450,000 7.000 6.500 296.00 4.00 80.0
$450,000.01 to $475,000 8.263 7.763 233.66 5.53 72.3
$475,000.01 to $500,000 7.167 6.667 298.00 2.00 66.1
$600,000.01 to $625,000 7.250 6.750 297.00 3.00 41.7
$775,000.01 to $800,000 7.250 6.750 299.00 3.00 76.4
===============================================================================================================
$34,503 8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<PAGE>
<TABLE>
STATE
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AK $300,224 11 0.25 $27,293 7.000 11.000
AL $675,557 39 0.56 $17,322 6.750 7.250
AZ $3,248,465 125 2.71 $25,988 6.750 13.500
CA $52,706,764 1,074 43.92 $49,075 5.990 14.000
CO $6,094,689 164 5.08 $37,163 5.990 13.250
CT $685,131 22 0.57 $31,142 7.000 11.000
DC $107,500 2 0.09 $53,750 7.250 10.000
DE $142,627 5 0.12 $28,525 7.000 12.250
FL $3,741,514 157 3.12 $23,831 6.750 13.000
GA $1,879,704 71 1.57 $26,475 7.000 13.000
HI $519,975 18 0.43 $28,888 6.750 10.750
IA $123,955 9 0.10 $13,773 7.000 13.500
ID $789,736 32 0.66 $24,679 7.000 13.000
IL $4,906,488 151 4.09 $32,493 6.750 11.625
IN $1,127,234 68 0.94 $16,577 6.750 10.625
KS $1,666,904 43 1.39 $38,765 7.000 12.000
KY $297,548 17 0.25 $17,503 7.000 7.250
LA $1,290,707 46 1.08 $28,059 6.750 11.375
MA $2,337,656 90 1.95 $25,974 6.750 12.750
MD $1,233,035 46 1.03 $26,805 7.000 13.500
ME $222,220 12 0.19 $18,518 7.000 9.500
MI $5,762,042 212 4.80 $27,179 5.990 12.750
MN $1,300,083 27 1.08 $48,151 5.990 7.500
MO $1,597,222 63 1.33 $25,353 7.000 10.750
MS $261,429 11 0.22 $23,766 7.000 7.250
MT $293,752 15 0.24 $19,583 7.000 11.625
NC $965,910 57 0.80 $16,946 6.750 9.500
ND $54,651 2 0.05 $27,325 7.000 7.250
NE $273,889 11 0.23 $24,899 7.000 7.250
NH $206,932 16 0.17 $12,933 7.000 10.750
NJ $3,121,580 84 2.60 $37,162 5.990 11.125
NM $420,271 21 0.35 $20,013 7.000 12.750
NV $1,649,792 45 1.37 $36,662 7.000 13.250
NY $3,804,717 93 3.17 $40,911 7.000 13.250
OH $1,777,969 94 1.48 $18,915 6.750 11.125
OK $905,961 36 0.75 $25,166 7.000 11.000
OR $998,811 54 0.83 $18,496 6.740 13.000
PA $1,944,314 90 1.62 $21,603 5.990 11.500
RI $111,015 6 0.09 $18,502 6.750 7.250
SC $277,358 20 0.23 $13,868 6.750 10.625
SD $8,901 1 0.01 $8,901 7.000 7.000
TN $129,369 5 0.11 $25,874 7.000 10.000
TX $596,064 14 0.50 $42,576 7.000 12.750
UT $1,336,672 50 1.11 $26,733 6.750 13.500
VA $1,299,717 45 1.08 $28,883 7.000 12.000
VT $86,314 3 0.07 $28,771 7.250 7.250
WA $5,428,891 156 4.52 $34,801 6.750 13.000
WI $580,897 31 0.48 $18,739 7.000 11.250
WY $707,947 14 0.59 $50,568 5.990 7.500
===============================================================================================================================
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
AK 7.622 7.122 298.20 1.80 89.6
AL 7.188 6.688 297.62 2.38 85.6
AZ 7.923 7.423 282.92 2.96 85.6
CA 8.652 8.152 263.80 3.48 79.9
CO 7.719 7.219 288.46 2.33 79.4
CT 7.388 6.888 298.56 1.44 88.5
DC 9.808 9.308 297.93 2.07 65.2
DE 7.166 6.666 298.53 1.40 97.0
FL 7.932 7.432 287.25 2.74 83.9
GA 7.995 7.495 290.72 2.30 78.6
HI 7.241 6.741 281.50 2.06 84.1
IA 7.769 7.269 296.81 3.19 81.6
ID 8.198 7.698 274.27 3.50 87.0
IL 7.368 6.868 297.97 2.22 82.5
IN 7.309 6.809 297.94 2.06 87.0
KS 7.259 6.759 297.35 2.65 84.1
KY 7.237 6.737 297.30 2.70 85.9
LA 7.859 7.359 298.33 1.67 81.0
MA 7.579 7.079 283.09 2.61 80.9
MD 7.910 7.410 276.27 2.34 88.2
ME 7.382 6.882 298.23 1.77 80.1
MI 7.248 6.748 281.10 1.82 84.0
MN 6.962 6.462 298.07 1.93 77.7
MO 7.355 6.855 297.83 2.17 84.0
MS 7.225 6.725 297.70 2.30 88.1
MT 7.805 7.305 285.40 3.24 71.0
NC 7.223 6.723 297.96 2.04 88.9
ND 7.068 6.568 297.27 2.73 68.7
NE 7.171 6.671 298.43 1.57 82.0
NH 7.385 6.885 297.47 2.53 79.0
NJ 7.280 6.780 292.51 1.97 80.0
NM 8.159 7.659 286.61 2.94 87.7
NV 8.104 7.604 278.65 3.27 76.4
NY 7.935 7.435 292.57 1.84 77.9
OH 7.581 7.081 297.57 2.43 85.9
OK 7.400 6.900 298.45 1.55 91.8
OR 7.509 7.009 297.25 2.50 84.0
PA 7.401 6.901 297.11 1.84 88.2
RI 7.142 6.642 297.67 2.33 93.7
SC 7.230 6.730 297.69 2.31 88.1
SD 7.000 6.500 296.00 4.00 69.0
TN 7.556 7.056 237.56 2.44 85.2
TX 7.739 7.239 297.52 2.48 86.6
UT 8.866 8.366 271.22 4.01 76.0
VA 7.747 7.247 278.81 2.17 86.4
VT 7.250 6.750 297.84 2.16 95.5
WA 7.909 7.409 280.25 2.67 84.3
WI 7.413 6.913 297.54 2.46 89.8
WY 6.399 5.899 293.41 1.27 61.3
===============================================================================================================
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<PAGE>
<TABLE>
RANGE OF COMBINED LOAN-TO-VALUE RATIO
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<=10.00 $26,633 1 0.02 $26,633 11.500 11.500
10.01-20.00 $174,488 8 0.15 $21,811 6.750 10.750
20,01-30.00 $512,133 17 0.43 $30,125 6.750 11.875
30.01-40.00 $791,687 34 0.66 $23,285 7.000 11.125
40.01-50.00 $3,161,167 59 2.63 $53,579 5.990 12.250
50.01-60.00 $5,574,476 114 4.65 $48,899 5.990 11.500
60.01-70.00 $15,572,932 395 12.98 $39,425 5.990 14.000
70.01-80.00 $30,200,291 651 25.17 $46,391 5.990 13.500
80.01-90.00 $37,606,377 1,294 31.34 $29,062 5.990 14.000
90.01-100.00 $26,379,919 905 21.98 $29,149 5.990 14.000
===============================================================================================================================
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
<=10.00 11.500 11.000 173.00 7.00 10.0
10.01-20.00 8.763 8.263 296.92 3.08 14.7
20,01-30.00 8.150 7.650 283.45 2.66 23.8
30.01-40.00 7.791 7.291 297.26 2.74 36.4
40.01-50.00 7.581 7.081 297.50 2.53 44.9
50.01-60.00 7.412 6.912 297.21 1.93 54.4
60.01-70.00 7.814 7.314 292.44 2.16 66.8
70.01-80.00 7.641 7.141 287.63 2.26 77.9
80.01-90.00 8.276 7.776 275.14 3.12 88.5
90.01-100.00 8.642 8.142 255.37 3.71 97.3
===============================================================================================================
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<TABLE>
RANGE OF CURRENT GROSS COUPON
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5.501 - 6.000 $1,928,637 35 1.61 $55,104 5.990 5.990
6.501 - 7.000 $17,905,806 668 14.92 $26,805 6.740 7.000
7.001 - 7.500 $75,285,971 2,115 62.74 $35,596 7.250 7.500
8.001 - 8.500 $366,482 7 0.31 $52,355 8.250 8.500
8.501 - 9.000 $1,464,351 35 1.22 $41,839 8.750 9.000
9.001 - 9.500 $1,790,964 31 1.49 $57,773 9.125 9.500
9.501 - 10.000 $1,056,244 41 0.88 $25,762 9.750 10.000
10.001 - 10.500 $1,528,795 35 1.27 $43,680 10.125 10.500
10.501 - 11.000 $3,192,694 94 2.66 $33,965 10.625 11.000
11.001 - 11.500 $3,097,947 108 2.58 $28,685 11.125 11.500
11.501 - 12.000 $2,681,008 79 2.23 $33,937 11.625 12.000
12.001 - 12.500 $3,601,577 91 3.00 $39,578 12.125 12.500
12.501 - 13.000 $3,640,463 96 3.03 $37,921 12.625 13.000
13.001 - 13.500 $2,035,140 37 1.70 $55,004 13.250 13.500
13.501 - 14.000 $424,026 6 0.35 $70,671 13.750 14.000
===============================================================================================================================
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
5.501 - 6.000 5.990 5.490 263.55 1.27 72.7
6.501 - 7.000 6.985 6.485 295.53 3.38 81.8
7.001 - 7.500 7.258 6.758 296.22 1.63 81.0
8.001 - 8.500 8.317 7.817 170.55 7.81 71.3
8.501 - 9.000 8.901 8.401 294.92 1.86 62.1
9.001 - 9.500 9.234 8.734 239.84 4.92 72.2
9.501 - 10.000 9.938 9.438 283.13 3.37 67.4
10.001 - 10.500 10.265 9.765 262.27 3.47 73.2
10.501 - 11.000 10.868 10.368 246.30 4.42 80.6
11.001 - 11.500 11.358 10.858 204.64 6.47 86.7
11.501 - 12.000 11.925 11.425 189.70 7.22 91.3
12.001 - 12.500 12.481 11.981 174.43 8.12 89.6
12.501 - 13.000 12.970 12.470 177.52 8.33 91.1
13.001 - 13.500 13.415 12.915 175.14 7.34 88.4
13.501 - 14.000 13.935 13.435 173.03 6.97 86.8
===============================================================================================================
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<PAGE>
<TABLE>
PROPERTY TYPE
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SinglFam $95,825,977 2,790 79.85 $34,346 5.990 14.000
PUD $19,025,780 495 15.85 $38,436 5.990 13.500
Lo Condo $4,286,928 161 3.57 $26,627 5.990 14.000
2-4 Units $861,419 32 0.72 $26,919 6.750 9.000
===============================================================================================================================
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
SinglFam 8.031 7.531 279.19 2.79 81.3
PUD 8.157 7.657 274.67 2.97 82.6
Lo Condo 8.843 8.343 261.94 3.38 83.6
2-4 Units 7.378 6.878 297.79 2.33 66.0
===============================================================================================================
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<TABLE>
LIEN PRIORITY
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Liens $2,601,917 35 2.17 $74,340 6.750 11.875
2nd Liens $117,398,188 3,443 97.83 $34,098 5.990 14.000
===============================================================================================================================
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
1st Liens 7.966 7.466 292.53 2.48 61.4
2nd Liens 8.078 7.578 277.67 2.84 81.9
===============================================================================================================
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<TABLE>
RANGE OF MARGIN
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0.000 $6,875,919 54 5.73 $127,332 5.990 8.250
0.001 - 0.250 $2,430,149 18 2.03 $135,008 5.990 8.500
0.251 - 0.500 $13,177,943 148 10.98 $89,040 5.990 8.750
0.501 - 0.750 $8,257,706 241 6.88 $34,264 6.750 9.000
0.751 - 1.000 $4,004,952 118 3.34 $33,940 5.990 9.250
1.001 - 1.250 $11,950,041 378 9.96 $31,614 6.750 9.500
1.251 - 1.500 $635,701 27 0.53 $23,544 7.000 9.750
1.501 - 1.750 $1,897,145 56 1.58 $33,878 5.990 10.250
1.751 - 2.000 $11,233,200 368 9.36 $30,525 6.750 10.250
2.001 - 2.250 $4,158,609 130 3.47 $31,989 5.990 10.500
2.251 - 2.500 $3,380,411 91 2.82 $37,147 5.990 10.750
2.501 - 2.750 $5,698,815 238 4.75 $23,945 6.750 11.250
2.751 - 3.000 $9,054,632 303 7.55 $29,883 5.990 11.250
3.001 - 3.250 $4,214,800 160 3.51 $26,343 5.990 11.500
3.251 - 3.500 $3,904,460 122 3.25 $32,004 5.990 11.875
3.501 - 3.750 $7,345,696 247 6.12 $29,740 5.990 12.000
3.751 - 4.000 $2,140,570 98 1.78 $21,843 5.990 12.250
4.001 - 4.250 $6,120,580 178 5.10 $34,385 5.990 12.500
4.251 - 4.500 $2,987,668 106 2.49 $28,186 7.000 12.750
4.501 - 4.750 $3,526,136 99 2.94 $35,618 5.990 13.000
4.751 - 5.000 $1,602,038 70 1.34 $22,886 5.990 13.250
5.001 - 5.250 $4,204,100 161 3.50 $26,112 6.750 13.500
5.251 - 5.500 $476,815 22 0.40 $21,673 7.000 13.750
5.501 - 5.750 $313,522 5 0.26 $62,704 14.000 14.000
5.751 - 6.000 $318,428 31 0.27 $10,272 6.750 7.500
6.001 - 6.250 $62,869 6 0.05 $10,478 7.000 7.250
6.751 - 7.000 $6,600 1 0.01 $6,600 7.000 7.000
7.001 - 7.250 $20,600 1 0.02 $20,600 7.250 7.250
7.251 - 7.500 $0 1 0.00 $0 7.250 7.250
===============================================================================================================================
2.262 $120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
0.000 7.286 6.786 293.75 1.51 59.8
0.001 - 0.250 6.956 6.456 293.26 2.14 64.0
0.251 - 0.500 7.242 6.742 297.00 1.66 78.0
0.501 - 0.750 7.394 6.894 297.93 2.14 59.2
0.751 - 1.000 8.020 7.520 270.24 3.57 67.8
1.001 - 1.250 7.225 6.725 297.92 2.18 75.3
1.251 - 1.500 7.569 7.069 273.45 2.26 76.8
1.501 - 1.750 8.811 8.311 295.37 2.24 75.0
1.751 - 2.000 7.490 6.990 293.12 2.23 81.7
2.001 - 2.250 7.403 6.903 290.82 2.13 87.6
2.251 - 2.500 8.856 8.356 263.24 2.68 86.3
2.501 - 2.750 8.321 7.821 285.58 2.77 87.1
2.751 - 3.000 7.826 7.326 284.51 2.71 86.9
3.001 - 3.250 8.825 8.325 244.68 4.18 94.4
3.251 - 3.500 7.891 7.391 277.45 2.74 96.8
3.501 - 3.750 8.510 8.010 266.33 3.80 89.1
3.751 - 4.000 7.782 7.282 282.27 3.36 95.3
4.001 - 4.250 10.065 9.565 225.37 5.59 93.3
4.251 - 4.500 8.026 7.526 283.86 2.89 95.4
4.501 - 4.750 12.461 11.961 179.67 7.64 91.0
4.751 - 5.000 9.651 9.151 219.94 3.70 95.0
5.001 - 5.250 9.228 8.728 259.88 3.06 94.7
5.251 - 5.500 8.739 8.239 256.98 2.00 96.2
5.501 - 5.750 14.000 13.500 172.69 7.31 83.9
5.751 - 6.000 7.205 6.705 299.24 0.89 99.2
6.001 - 6.250 7.194 6.694 298.84 1.16 98.3
6.751 - 7.000 7.000 6.500 297.00 3.00 58.1
7.001 - 7.250 7.250 6.750 300.00 0.00 90.0
7.251 - 7.500 7.250 6.750 300.00 0.00 80.0
===============================================================================================================
2.262 8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<PAGE>
<TABLE>
RANGE OF CREDIT LIMIT UTILIZATION RATES
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0.00% $0 130 0.00 $0 5.990 13.250
0.01% - 10.00% $146,685 46 0.12 $3,189 5.990 13.000
10.01% - 20.00% $744,451 90 0.62 $8,272 7.000 13.500
20.01% - 30.00% $1,670,965 141 1.39 $11,851 6.750 13.000
30.01% - 40.00% $1,947,605 141 1.62 $13,813 5.990 13.000
40.01% - 50.00% $3,646,827 250 3.04 $14,587 5.990 13.500
50.01% - 60.00% $3,867,773 174 3.22 $22,229 6.750 13.500
60.01% - 70.00% $4,780,031 202 3.98 $23,664 5.990 12.500
70.01% - 80.00% $6,076,754 220 5.06 $27,622 5.990 14.000
80.01% - 90,00% $9,770,054 255 8.14 $38,314 6.740 14.000
90.01% - 100.00% $87,348,960 1,829 72.79 $47,758 5.990 14.000
- -------------------------------------------------------------------------------------------------------------------------------
89.73% $120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
RANGE OF CREDIT LIMIT UTILIZATION RATES
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
0.00% 8.347 7.847 278.48 3.44 84.1
0.01% - 10.00% 8.188 7.688 278.59 3.57 73.7
10.01% - 20.00% 7.738 7.238 286.55 2.51 74.5
20.01% - 30.00% 7.775 7.275 290.66 2.58 73.8
30.01% - 40.00% 7.595 7.095 290.57 2.71 78.5
40.01% - 50.00% 7.561 7.061 291.26 2.50 75.6
50.01% - 60.00% 7.867 7.367 284.60 2.61 78.9
60.01% - 70.00% 7.574 7.074 289.33 2.45 80.3
70.01% - 80.00% 7.750 7.250 285.78 2.82 79.6
80.01% - 90,00% 8.200 7.700 277.52 3.42 78.3
90.01% - 100.00% 8.162 7.662 275.43 2.82 82.7
- ---------------------------------------------------------------------------------------------------------------
89.73% 8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<PAGE>
<TABLE>
MAXIMUM RATES
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12.000 $83,300 1 0.07 $83,300 7.000 7.000
12.250 $46,069 4 0.04 $11,517 7.250 10.000
15.000 $265,944 13 0.22 $20,457 7.000 11.625
16.000 $1,003,869 58 0.84 $17,308 6.750 12.000
17.000 $4,351,086 163 3.63 $26,694 5.990 12.750
18.000 $114,249,837 3,239 95.21 $35,273 5.990 14.000
- -------------------------------------------------------------------------------------------------------------------------------
17.934 $120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
12.000 7.000 6.500 237.00 3.00 90.0
12.250 8.561 8.061 238.57 1.43 76.6
15.000 7.419 6.919 297.20 2.80 68.5
16.000 7.404 6.904 297.93 2.07 88.2
17.000 7.594 7.094 295.62 2.26 83.4
18.000 8.102 7.602 277.14 2.86 81.4
- ---------------------------------------------------------------------------------------------------------------
17.934 8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<TABLE>
RANGE OF MONTHS REMAINING TO SCHEDULED MATURITY
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
145-156 $884,039 19 0.74 $46,528 5.990 13.500
157-168 $959,512 28 0.80 $34,268 9.250 14.000
169-180 $17,174,194 422 14.31 $40,697 5.990 14.000
229-240 $129,369 5 0.11 $25,874 7.000 10.000
289-300 $100,148,538 2,980 83.46 $33,607 5.990 13.500
301-312 $704,453 24 0.59 $29,352 7.250 10.250
- -------------------------------------------------------------------------------------------------------------------------------
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
145-156 7.959 7.459 154.64 1.36 96.2
157-168 12.109 11.609 167.74 12.26 92.0
169-180 11.680 11.180 172.65 7.35 88.9
229-240 7.556 7.056 237.56 2.44 85.2
289-300 7.422 6.922 298.08 2.00 79.9
301-312 7.904 7.404 302.00 0.00 89.6
- ---------------------------------------------------------------------------------------------------------------
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<TABLE>
ORIGINATION YEAR
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1998 $1,957,402 54 1.63 $36,248 8.500 14.000
1999 $118,042,703 3,424 98.37 $34,475 5.990 14.000
===============================================================================================================================
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
1998 11.986 11.486 168.38 11.62 91.9
1999 8.011 7.511 279.81 2.69 81.3
===============================================================================================================
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<TABLE>
DELINQUENCY STATUS
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT $120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
$120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
CURRENT 8.076 7.576 277.99 2.83 81.5
===============================================================================================================
8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<PAGE>
<TABLE>
RANGE OF CREDIT LIMIT
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT # OF % OF AVERAGE MIN MAX
DESCRIPTION BALANCE LOANS TOTAL BALANCE WAC WAC
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 0.00 to $ 10,000 $808,914 113 0.67 $7,159 5.990 12.500
$ 10,000.01 to $ 20,000 $12,345,506 1,020 10.29 $12,103 5.990 13.500
$ 20,000.01 to $ 30,000 $14,406,285 766 12.01 $18,807 5.990 13.500
$ 30,000.01 to $ 40,000 $10,929,679 387 9.11 $28,242 5.990 14.000
$ 40,000.01 to $ 50,000 $13,796,744 399 11.50 $34,578 5.990 13.500
$ 50,000.01 to $ 60,000 $8,015,845 184 6.68 $43,564 5.990 13.500
$ 60,000.01 to $ 70,000 $4,738,442 100 3.95 $47,384 5.990 13.500
$ 70,000.01 to $ 80,000 $6,459,811 116 5.38 $55,688 5.990 13.500
$ 80,000.01 to $ 90,000 $3,114,271 54 2.60 $57,672 5.990 14.000
$ 90,000.01 to $100,000 $8,350,751 119 6.96 $70,174 5.990 14.000
$100,000.01 to $125,000 $4,031,912 42 3.36 $95,998 5.990 14.000
$125,000.01 to $150,000 $7,792,187 66 6.49 $118,063 5.990 12.000
$150,000.01 to $175,000 $2,029,047 15 1.69 $135,270 7.250 12.500
$175,000.01 to $200,000 $5,705,703 36 4.75 $158,492 6.990 13.000
$200,000.01 to $225,000 $1,109,847 8 0.92 $138,731 7.250 7.250
$225,000.01 to $250,000 $1,919,429 8 1.60 $239,929 7.000 7.500
$250,000.01 to $275,000 $1,400,277 6 1.17 $233,379 7.000 7.250
$275,000.01 to $300,000 $4,020,973 15 3.35 $268,065 5.990 10.750
$300,000.01 to $325,000 $310,000 1 0.26 $310,000 7.250 7.250
$325,000.01 to $350,000 $1,173,957 4 0.98 $293,489 7.250 7.250
$375,000.01 to $400,000 $2,558,709 7 2.13 $365,530 6.750 13.500
$425,000.01 to $450,000 $448,000 1 0.37 $448,000 7.000 7.000
$450,000.01 to $475,000 $913,169 4 0.76 $228,292 7.000 9.250
$475,000.01 to $500,000 $2,195,647 5 1.83 $439,129 7.000 7.250
$600,000.01 to $625,000 $625,000 1 0.52 $625,000 7.250 7.250
$775,000.01 to $800,000 $800,000 1 0.67 $800,000 7.250 7.250
- -------------------------------------------------------------------------------------------------------------------------------
$44,709 $120,000,105 3,478 100.00 $34,503 5.990 14.000
===============================================================================================================================
(Table continued)
- ---------------------------------------------------------------------------------------------------------------
GROSS NET REMG. ORIG
DESCRIPTION WAC WAC TERM AGE CLTV
- ---------------------------------------------------------------------------------------------------------------
$ 0.00 to $ 10,000 7.340 6.840 294.76 2.35 88.5
$ 10,000.01 to $ 20,000 7.631 7.131 288.35 2.78 85.4
$ 20,000.01 to $ 30,000 7.901 7.401 282.29 3.11 84.7
$ 30,000.01 to $ 40,000 8.469 7.969 269.48 3.55 85.6
$ 40,000.01 to $ 50,000 8.980 8.480 253.52 4.24 85.2
$ 50,000.01 to $ 60,000 8.005 7.505 279.49 2.53 86.9
$ 60,000.01 to $ 70,000 8.235 7.735 272.39 2.78 86.7
$ 70,000.01 to $ 80,000 8.490 7.990 264.42 3.12 85.0
$ 80,000.01 to $ 90,000 8.001 7.501 283.68 2.41 85.4
$ 90,000.01 to $100,000 8.656 8.156 272.62 2.84 79.6
$100,000.01 to $125,000 8.799 8.299 269.16 3.28 78.8
$125,000.01 to $150,000 7.540 7.040 293.50 1.79 80.2
$150,000.01 to $175,000 7.769 7.269 289.68 1.03 74.2
$175,000.01 to $200,000 7.617 7.117 283.94 2.00 74.3
$200,000.01 to $225,000 7.250 6.750 299.51 0.49 71.9
$225,000.01 to $250,000 7.287 6.787 299.42 0.58 77.1
$250,000.01 to $275,000 7.159 6.659 298.02 1.98 74.8
$275,000.01 to $300,000 7.311 6.811 289.61 1.72 68.3
$300,000.01 to $325,000 7.250 6.750 300.00 0.00 79.9
$325,000.01 to $350,000 7.250 6.750 297.89 2.11 64.1
$375,000.01 to $400,000 8.177 7.677 279.42 2.48 69.7
$425,000.01 to $450,000 7.000 6.500 296.00 4.00 80.0
$450,000.01 to $475,000 8.263 7.763 233.70 5.53 72.3
$475,000.01 to $500,000 7.193 6.693 297.81 2.19 64.4
$600,000.01 to $625,000 7.250 6.750 297.00 3.00 41.7
$775,000.01 to $800,000 7.250 6.750 299.00 3.00 76.4
- ---------------------------------------------------------------------------------------------------------------
$44,709 8.076 7.576 277.99 2.83 81.5
===============================================================================================================
</TABLE>
<PAGE>
Item 7. Financial Statements, Pro Forma Financial
- ---- -----------------------------------------
Information and Exhibits.
------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99.1. The Pooling and Servicing Agreement, dated as of November 29,
1999, by and among the Company, CHL and the Trustee.
99.2. The Purchase Agreement, dated as of November 29, 1999, between
the Company and CHL.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CWABS, INC.
By: /s/ David Walker
-------------------------
David Walker
Vice President
Dated: November [ o ], 1999
<PAGE>
Exhibit Index
Exhibit
- -------
99.1. Pooling and Servicing Agreement, dated as of November 29, 1999, by and
among, the Company, CHL and the Trustee.
99.2. Purchase Agreement, dated as of November 29, 1999, between the Company
and CHL.
EXHIBIT 99.1
- ------------
Execution Copy
================================================================================
CWABS, INC.,
as Depositor,
COUNTRYWIDE HOME LOANS, INC.,
as Sponsor and Master Servicer,
and
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
-----------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 29, 1999
----------------------
Revolving Home Equity Loan Asset Backed Certificates
Series 1999-D
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01. Definitions.................................................I-1
Section 1.02. Interest Calculations......................................I-20
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates; Tax Treatment
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation
to Fund Advances Under Credit Line Agreements.............................II-1
Section 2.02. Acceptance by Trustee......................................II-4
Section 2.03. Representations and Warranties Regarding the
Master Servicer...........................................................II-6
Section 2.04. Representations and Warranties of the Sponsor Regarding
the Mortgage Loans; Retransfer of Certain Mortgage Loans..................II-7
Section 2.05. Covenants of the Depositor................................II-13
Section 2.06. Transfers of Mortgage Loans at Election of Transferor.....II-14
Section 2.07. Execution and Authentication of Certificates..............II-15
Section 2.08. Tax Treatment.............................................II-16
Section 2.09. Representations and Warranties of the Depositor...........II-16
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. The Master Servicer.......................................III-1
Section 3.02. Collection of Certain Mortgage Loan Payments..............III-2
Section 3.03. Withdrawals from the Collection Account...................III-4
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses.................................................................III-5
Section 3.05. Assumption and Modification Agreements....................III-6
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans................................................III-6
Section 3.07. Trustee to Cooperate......................................III-7
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Master Servicer..........................................................III-8
Section 3.09. Annual Statement as to Compliance.........................III-8
Section 3.10. Annual Servicing Report...................................III-8
Section 3.11. Access to Certain Documentation and Information Regarding
the Mortgage Loans.......................................................III-9
Section 3.12. Maintenance of Certain Servicing Insurance Policies.......III-9
Section 3.13. Reports to the Securities and Exchange Commission.........III-9
Section 3.14. Tax Returns...............................................III-9
Section 3.15. Information Required by the Internal Revenue
Service Generally and Reports of Foreclosures and Abandonments
of Mortgaged Property...................................................III-10
ARTICLE IV
Servicing Certificate
Section 4.01. Servicing Certificate......................................IV-1
Section 4.02. Claims upon the Policy; Policy Payments Account............IV-4
Section 4.03. Replacement Policy.........................................IV-5
Section 4.04. Effect of Payments by the Credit Enhancer; Subrogation.....IV-6
Section 4.05. Optional Advances of the Master Servicer...................IV-6
ARTICLE V
Payments and Statements to Certificateholders; Rights of Certificateholders
Section 5.01. Distributions...............................................V-1
Section 5.02. Calculation of the Investor Certificate Rate................V-5
Section 5.03. Statements to Certificateholders............................V-5
Section 5.04. Rights of Certificateholders................................V-7
ARTICLE VI
The Certificates
Section 6.01. The Certificates...........................................VI-1
Section 6.02. Registration of Transfer and Exchange of Investor
Certificates; Appointment of Registrar....................................VI-1
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates..........VI-3
Section 6.04. Persons Deemed Owners......................................VI-3
Section 6.05. Restrictions on Transfer of Transferor Certificates........VI-3
Section 6.06. Appointment of Paying Agent................................VI-5
Section 6.07. Acceptance of Obligations..................................VI-6
ARTICLE VII
The Master Servicer, the Sponsor and the Depositor
Section 7.01. Liability of the Sponsor, the Master Servicer and
the Depositor............................................................VII-1
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor.....................VII-1
Section 7.03. Limitation on Liability of the Master Servicer and
Others...................................................................VII-1
Section 7.04. Master Servicer Not to Resign.............................VII-2
Section 7.05. Delegation of Duties......................................VII-2
Section 7.06. Indemnification of the Trust by the Master Servicer.......VII-2
Section 7.07. Indemnification of the Trust by the Transferor............VII-3
Section 7.08. Limitation on Liability of the Transferor.................VII-3
ARTICLE VIII
Servicing Termination
Section 8.01. Events of Servicing Termination..........................VIII-1
Section 8.02. Trustee to Act; Appointment of Successor.................VIII-2
Section 8.03. Notification to Certificateholders.......................VIII-3
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee..........................................IX-1
Section 9.02. Certain Matters Affecting the Trustee......................IX-2
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans......IX-3
Section 9.04. Trustee May Own Certificates...............................IX-4
Section 9.05. Master Servicer to Pay Trustee's Fees and Expenses;
Master Servicer to Indemnify..............................................IX-4
Section 9.06. Eligibility Requirements for Trustee.......................IX-5
Section 9.07. Resignation or Removal of Trustee..........................IX-5
Section 9.08. Successor Trustee..........................................IX-6
Section 9.09. Merger or Consolidation of Trustee.........................IX-6
Section 9.10. Appointment of Co-Trustee or Separate Trustee..............IX-6
Section 9.11. Limitation of Liability....................................IX-8
Section 9.12. Trustee May Enforce Claims Without Possession of
Certificates..............................................................IX-8
Section 9.13. Suits for Enforcement......................................IX-8
ARTICLE X
Termination
Section 10.01. Termination.................................................X-1
ARTICLE XI
Rapid Amortization Events
Section 11.01. Rapid Amortization Events..................................XI-1
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment.................................................XII-1
Section 12.02. Recordation of Agreement..................................XII-2
Section 12.03. Limitation on Rights of Certificateholders................XII-3
Section 12.04. Governing Law.............................................XII-3
Section 12.05. Notices...................................................XII-3
Section 12.06. Severability of Provisions................................XII-4
Section 12.07. Assignment................................................XII-4
Section 12.08. Certificates Nonassessable and Fully Paid.................XII-4
Section 12.09. Third-Party Beneficiaries.................................XII-4
Section 12.10. Counterparts..............................................XII-5
Section 12.11. Effect of Headings and Table of Contents..................XII-5
<PAGE>
EXHIBIT A-1 - FORM OF INVESTOR CERTIFICATE.................................A-1
EXHIBIT B - FORM OF TRANSFEROR CERTIFICATE.................................B-1
EXHIBIT C - MORTGAGE LOAN SCHEDULE.........................................C-1
EXHIBIT D - FORM OF CREDIT LINE AGREEMENT..................................D-1
EXHIBIT E - LETTER OF REPRESENTATIONS......................................E-1
EXHIBIT F - FORM OF INVESTMENT LETTER......................................F-1
EXHIBIT G - FORM OF REQUEST FOR RELEASE....................................G-1
EXHIBIT H-1 - FORM OF INITIAL CERTIFICATION..............................H-1-1
EXHIBIT H-2 - FORM OF DELAY DELIVERY CERTIFICATION.......................H-2-1
EXHIBIT I - FORM OF FINAL CERTIFICATION....................................I-1
<PAGE>
This Pooling and Servicing Agreement, dated as of November 29, 1999,
among CWABS, Inc., as Depositor (the "Depositor"), Countrywide Home Loans,
Inc., as Sponsor and Master Servicer (in such capacities, the "Sponsor" and the
"Master Servicer", respectively), and Bank One, National Association, as
Trustee (the "Trustee"),
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Whenever used in this Agreement, the
-----------
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article.
Accelerated Principal Distribution Amount: With respect to any
-----------------------------------------
Distribution Date and Class, the amount, if any, required to reduce the related
Investor Certificate Principal Balance (after giving effect to the distribution
of all other amounts actually distributed on the Investor Certificates on such
Distribution Date) so that the related Invested Amount (immediately following
such Distribution Date) exceeds the related Investor Certificate Principal
Balance (as so reduced) by the Required Overcollateralization Amount.
Additional Balance: As to any Mortgage Loan and day, the aggregate
------------------
amount of all Draws conveyed to the Trust pursuant to Section 2.01.
Adjustment Date: With respect to any Interest Period, the second LIBOR
---------------
Business Day preceding the first day of such Interest Period.
Affiliate: With respect to any Person, any other Person controlling,
---------
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of
a Person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise and "controlling" and "controlled" shall
have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
---------
hereof and supplements hereto.
Alternative Principal Payment: As to any Distribution Date and Class
-----------------------------
of Investor Certificates, the amount (but not less than zero) equal to
Principal Collections for the related Loan Group for such Distribution Date
less the aggregate of Additional Balances for such Loan Group created during
the related Collection Period.
Appraised Value: As to any Mortgaged Property, the value established
---------------
by any of the following: (i) with respect to Credit Line Agreements with Credit
Limits greater than $100,000, by a full appraisal, (ii) with respect to Credit
Line Agreements with Credit Limits equal to or less than $100,000, by either a
drive by inspection or electronic appraisal of such Mortgaged Property made to
establish compliance with the underwriting criteria then in effect in
connection with the application for the Mortgage Loan secured by such Mortgaged
Property, and (iii) with respect to any Mortgage Loan as to which the Servicer
consents to a new senior lien pursuant to Section 3.01(a), in compliance with
the underwriting criteria then in effect in connection with the application for
the related senior mortgage loan.
Asset Balance: As to any Mortgage Loan, other than a Liquidated
-------------
Mortgage Loan, and day, the related Cut-off Date Asset Balance, plus (i) any
Additional Balance in respect of such Mortgage Loan, minus (ii) all collections
credited as principal against the Asset Balance of any such Mortgage Loan in
accordance with the related Credit Line Agreement. For purposes of this
definition, a Liquidated Mortgage Loan shall be deemed to have an Asset Balance
equal to the Asset Balance of the related Mortgage Loan immediately prior to
the final recovery of related Liquidation Proceeds and an Asset Balance of zero
thereafter.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
----------------------
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the sale of the Mortgage to the Trustee, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction.
Available Transferor Subordinated Amount: As to any Distribution Date
----------------------------------------
and Loan Group, an amount equal to the lesser of (a) the related Transferor
Principal Balance for such Distribution Date and (b) the related Required
Transferor Subordinated Amount for such Distribution Date.
Basis Risk Carryforward: For any Distribution Date and Interest Period
-----------------------
for which the related Investor Certificate Rate for a Class has been determined
pursuant to the Maximum Rate, the excess of (a) the amount of interest that
would have accrued on the related Class of Investor Certificates during the
related Interest Period had such amount been determined pursuant to the
applicable Interest Formula Rate over (b) the interest actually accrued at the
related Investor Certificate Rate on the related Class of Investor Certificates
during such Interest Period. Basis Risk Carryforward will not be included as
interest payments on the related Class of Investor Certificates for such
Distribution Date and such amount will accrue interest at the related Interest
Formula Rate (as adjusted from time to time) and will be paid on future
Distribution Dates only to the extent funds are available therefor as set forth
in Section 5.01 of this Agreement.
BIF: The Bank Insurance Fund, as from time to time constituted,
---
created under the Financial Institutions Reform, Recovery and Enhancement Act
of 1989, or if at any time after the execution of this instrument the Bank
Insurance Fund is not existing and performing duties now assigned to it, the
body performing such duties on such date.
Billing Cycle: With respect to any Mortgage Loan and Collection
-------------
Period, the billing period specified in the related Credit Line Agreement and
with respect to which amounts billed are received during such Collection
Period.
Book-Entry Certificate: Any Investor Certificate registered in the
----------------------
name of the Depository or its nominee, ownership of which is reflected on the
books of the Depository or on the books of a Person maintaining an account with
such Depository (directly or as an indirect participant in accordance with the
rules of such Depository).
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
------------
day on which banking institutions in the States of New York, California or
Illinois are required or authorized by law to be closed.
Certificate: An Investor Certificate or a Transferor Certificate.
-----------
Certificateholder or Holder: The Person in whose name a Certificate is
---------------------------
registered in the Certificate Register, except that, solely for the purpose of
giving any consent, direction, waiver or request pursuant to this Agreement,
(x) any Investor Certificate registered in the name of the Transferor, or any
Person known to a Responsible Officer to be an Affiliate of either the
Depositor or the Transferor and (y) any Investor Certificate for which the
Transferor, or any Person known to a Responsible Officer to be an Affiliate of
either the Depositor or the Transferor is the Certificate Owner shall be deemed
not to be outstanding (unless to the knowledge of a Responsible Officer (i) the
Transferor, or such Affiliate is acting as trustee or nominee for a Person who
is not an Affiliate of the Transferor and who makes the voting decision with
respect to such Investor Certificate or (ii) the Transferor, or such Affiliate
is the Certificate Owner of all the Investor Certificates) and the Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite amount of Percentage Interests necessary to effect any
such consent, direction, waiver or request has been obtained.
Certificate Owner: The Person who is the beneficial owner of a
-----------------
Book-Entry Certificate.
Certificate Register and Certificate Registrar: The register
----------------------------------------------
maintained and the registrar appointed pursuant to Section 6.02.
Class: All Investor Certificates bearing the same class designation.
-----
Class A-1 Investor Certificate: Any certificate executed and
------------------------------
authenticated by the Trustee substantially in the form set forth in Exhibit A
hereto.
Class A-2 Investor Certificate: Any certificate executed and
------------------------------
authenticated by the Trustee substantially in the form set forth in Exhibit A
hereto.
Class A-1 Investor Certificate Rate: A per annum rate equal to, with
-----------------------------------
respect to the first Interest Period, 5.9775%, and for any subsequent Interest
Period, a per annum rate equal to the least of: (i) the sum of (a) LIBOR as of
the second LIBOR Business Day prior to the first day of such Interest Period
and (b) 0.37%, (ii) the Maximum Rate for the Class A-1 Investor Certificates
for such Interest Period and (iii) 15.50%.
Class A-2 Investor Certificate Rate: A per annum rate equal to, with
-----------------------------------
respect to the first Interest Period, 5.9575%, and for any subsequent Interest
Period, a per annum rate equal to the least of: (i) the sum of (a) LIBOR as of
the second LIBOR Business Day prior to the first day of such Interest Period
and (b) 0.35%, (ii) the Maximum Rate for the Class A-2 Investor Certificates
for such Interest Period and (iii) 15.50%.
Closing Date: November 30, 1999.
------------
Code: The Internal Revenue Code of 1986, as the same may be amended
----
from time to time (or any successor statute thereto).
Collection Account: The custodial account or accounts created and
------------------
maintained for the benefit of the Investor Certificateholders and the Credit
Enhancer pursuant to Section 3.02(b). The Collection Account shall be an
Eligible Account.
Collection Period: With respect to any Distribution Date and any
-----------------
Mortgage Loan, the calendar month preceding the month of such Distribution Date
(or, in the case of the first Collection Period, the period from November 30,
1999 through December 31, 1999).
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan as of
----------------------------
any date, the percentage equivalent of the fraction, the numerator of which is
the sum of (i) the Credit Limit and (ii) the outstanding principal balance as
of the date of execution of the related original Credit Line Agreement (or any
subsequent date as of which such outstanding principal balance may be
determined in connection with an increase in the Credit Limit for such Mortgage
Loan) of any mortgage loan or mortgage loans that are senior or equal in
priority to the Mortgage Loan and which is secured by the same Mortgaged
Property and the denominator of which is the Valuation of the related Mortgaged
Property.
Corporate Trust Office: The principal office of the Trustee at which
----------------------
at any particular time its corporate business shall be administered, which
office on the Closing Date is located at 1 Bank One Plaza, Suite IL1-0126,
Chicago, Illinois 60670-0126, Attention: Corporate Trust Services Division.
Credit Enhancement Draw Amount: As to any Distribution Date and Class,
------------------------------
an amount equal to the sum of (x) the amount by which the amount to be
distributed to such Class of Investor Certificateholders pursuant to Section
5.01(a)(iii) exceeds the sum of (i) the amount of Investor Interest Collections
related to such Class on deposit in the Collection Account on the Business Day
preceding such Distribution Date that is available to be applied therefor, (ii)
the amount, if any, deposited in the Collection Account in respect of the
related Loan Group for such Distribution Date pursuant to Section 4.05 and
(iii) the amount, if any, of the related Subordinated Transferor Collections
available to be applied therefor pursuant to Section 5.01(c), (iv) any
Crossover Amounts and (v) any withdrawals from the Reserve Account to be
applied to such excess, (y) the related Guaranteed Principal Distribution
Amount and (z) any Preference Claim related to such Class for such Distribution
Date.
Credit Enhancer: Ambac Assurance Corporation, a Wisconsin domiciled
---------------
stock insurance corporation, any successor thereto or any replacement credit
enhancer substituted pursuant to Section 4.03.
Credit Enhancer Default: The failure by the Credit Enhancer to make a
-----------------------
payment required under the Policy in accordance with the terms thereof.
Credit Limit: As to any Mortgage Loan, the maximum Asset Balance
------------
permitted under the terms of the related Credit Line Agreement.
Credit Limit Utilization Rate: As to any Mortgage Loan, the percentage
-----------------------------
equivalent of a fraction the numerator of which is the Cut-off Date Asset
Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
Credit Line Agreement: With respect to any Mortgage Loan, the related
---------------------
credit line account agreement executed by the related Mortgagor and any
amendment or modification thereof.
Crossover Amount: As to either Class of Investor Certificates and any
----------------
Distribution Date, the portion, if any, of the Investor Interest Collections
and Subordinated Transferor Collections for the other Loan Group to be applied
to Investor Certificate Interest and Unpaid Investor Certificate Interest
Shortfall on such Class of Investor Certificates pursuant to Sections
5.01(a)(ii) and 5.01(c)(ix).
Cumulative Loss Test Violation: As defined in the Insurance Agreement.
------------------------------
Cut-off Date: November 29, 1999.
------------
Cut-off Date Asset Balance: With respect to any Mortgage Loan, the
--------------------------
unpaid principal balance thereof as of the Cut-off Date.
Cut-off Date Loan Group 1 Balance: The Loan Group 1 Balance calculated
---------------------------------
as of the Cut-off Date.
Cut-off Date Loan Group 2 Balance: The Loan Group 2 Balance calculated
---------------------------------
as of the Cut-off Date.
Cut-off Date Pool Balance: The Pool Balance calculated as of the
-------------------------
Cut-off Date.
Defective Mortgage Loan: A Mortgage Loan subject to retransfer
-----------------------
pursuant to Section 2.02 or 2.04.
Deficiency Amount: As defined in Section 5.01(d).
-----------------
Deficient Loan Group: As defined in Section 5.01(a).
--------------------
Definitive Certificates: As defined in Section 6.02(c).
-----------------------
Depositor: CWABS, Inc., a Delaware corporation, or its successor in
---------
interest.
Depository: The initial Depository shall be The Depository Trust
----------
Company, the nominee of which is Cede & Co., as the registered Holder of both
Classes of Investor Certificates evidencing $320,000,000 in initial aggregate
principal amount of the Class A-1 Investor Certificates and $120,000,000 in
initial aggregate principal amount of the Class A-2 Investor Certificates. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(a)(5) of the UCC of the State of New York.
Depository Participant: A broker, dealer, bank or other financial
----------------------
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the third
------------------
Business Day prior to such Distribution Date.
Distribution Date: The fifteenth day of each month, or if such day is
-----------------
not a Business Day, then the next Business Day, beginning in January 2000.
Draw: With respect to any Mortgage Loan, an additional borrowing by
----
the Mortgagor subsequent to the Cut-off Date in accordance with the related
Mortgage Note.
Due Date: As to any Mortgage Loan, the fifteenth day of the month.
--------
Electronic Ledger: The electronic master record of home equity credit
-----------------
line mortgage loans maintained by the Master Servicer or by the Sponsor, as
appropriate.
Eligible Account: (i) An account that is maintained with a depository
----------------
institution whose debt obligations throughout the time of any deposit therein
are rated in the highest short-term debt rating category by the Rating
Agencies, (ii) one or more accounts with a depository institution having a
minimum long-term unsecured debt rating of "BBB" by Standard & Poor's and
"Baa3" by Moody's, which accounts are fully insured by either SAIF or BIF,
(iii) a segregated trust account maintained with the Trustee or an Affiliate of
the Trustee in its fiduciary capacity, or (iv) an account otherwise acceptable
to each Rating Agency and the Credit Enhancer, as evidenced at closing by
delivery of a rating letter by each Rating Agency and thereafter by delivery of
a letter from (a) each Rating Agency to the Trustee, within 30 days of receipt
of notice of such deposit, to the effect that such deposit shall not cause such
Rating Agency to reduce or withdraw its then-current rating of the Certificates
without regard to the Policy and (b) from the Credit Enhancer to the Trustee,
within 30 days of receipt of notice of such deposit, to the effect that such
account is acceptable to it.
Eligible Investments: (i) obligations of the United States or any
--------------------
agency thereof, provided the timely payment of such obligations are backed by
the full faith and credit of the United States; (ii) general obligations of or
obligations guaranteed by any state of the United States or the District of
Columbia receiving the highest long-term debt rating of each Rating Agency, or
such lower rating as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, without regard
to the Policy; (iii) commercial paper issued by Countrywide Home Loans, Inc. or
any of its Affiliates; provided that such commercial paper is rated no lower
than A-1 by Standard & Poor's and P-2 by Moody's, and the long-term debt of
Countrywide Home Loans, Inc. is rated at least A3 by Moody's, or such lower
ratings as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, without regard to the
Policy; (iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency, or
such lower rating as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, without regard
to the Policy; (v) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or any state thereof and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long term unsecured debt
obligations of such depository institution or trust company (or in the case of
the principal depository institution in a holding company system, the
commercial paper or long-term unsecured debt obligations of such holding
company, but only if Moody's is not a Rating Agency) are then rated one of the
two highest long-term and the highest short-term ratings of each Rating Agency
for such securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any Rating Agency, without regard to the Policy; (vi) demand or time deposits
or certificates of deposit issued by any bank or trust company or savings
institution to the extent that such deposits are fully insured by the FDIC;
(vii) guaranteed reinvestment agreements issued by any bank, insurance company
or other corporation containing, at the time of the issuance of such
agreements, such terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any Rating
Agency, without regard to the Policy; (viii) repurchase obligations with
respect to any security described in clauses (i) and (ii) above, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (v) above; (ix) securities (other than stripped
bonds, stripped coupons or instruments sold at a purchase price in excess of
115% of the face amount thereof) bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the two
highest ratings of each Rating Agency (except if the Rating Agency is Moody's,
such rating shall be the highest commercial paper rating of Moody's for any
such securities), or such lower rating as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any Rating
Agency, without regard to the Policy, as evidenced by a signed writing
delivered by each Rating Agency; (x) interests in any money market fund which
at the date of acquisition of the interests in such fund and throughout the
time such interests are held in such fund has the highest applicable rating by
each Rating Agency or such lower rating as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any Rating
Agency, without regard to the Policy; (xi) short term investment funds
sponsored by any trust company or national banking association incorporated
under the laws of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in their respective highest
applicable rating category or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any Rating Agency, without regard to the Policy; and (xii) such other
investments having a specified stated maturity and bearing interest or sold at
a discount acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any Rating Agency, without regard to the Policy, as evidenced by a signed
writing delivered by each Rating Agency; provided that no such instrument shall
be an Eligible Investment if such instrument evidences either the right to
receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to its stated maturity.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the
---------------------------------
Sponsor for a Defective Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding Asset Balance (or in the case of a
substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an
aggregate Asset Balance), not 10% more or 10% less than the Transfer
Deficiency, if any, relating to such Defective Mortgage Loan; (ii) have a Loan
Rate not less than the Loan Rate of the Defective Mortgage Loan and not more
than 1% in excess of the Loan Rate of such Defective Mortgage Loan; (iii) have
a Loan Rate based on the same Index with adjustments to such Loan Rate made on
the same Interest Rate Adjustment Date as that of the Defective Mortgage Loan;
(iv) have a Gross Margin that is not less than the Gross Margin of the
Defective Mortgage Loan and not more than 100 basis points higher than the
Gross Margin for the Defective Mortgage Loan; (v) have a Mortgage of the same
or higher level of priority as the Mortgage relating to the Defective Mortgage
Loan at the time such Mortgage was transferred to the Trust; (vi) have a
remaining term to maturity not more than six months earlier and not more than
60 months later than the remaining term to maturity of the Defective Mortgage
Loan; (vii) comply with each representation and warranty set forth in Section
2.04 (deemed to be made as of the date of substitution); and (viii) have an
original Combined Loan-to-Value Ratio not greater than that of the Defective
Mortgage Loan. More than one Eligible Substitute Mortgage Loan may be
substituted for a Defective Mortgage Loan if such Eligible Substitute Mortgage
Loans meet the foregoing attributes in the aggregate and such substitution is
approved in writing in advance by the Credit Enhancer.
ERISA: Employee Retirement Income Security Act of 1974, as amended.
-----
Event of Servicing Termination: As defined in Section 8.01.
------------------------------
FDIC: The Federal Deposit Insurance Corporation or any successor
----
thereto.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the
------------------
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Asset Balance (plus accrued and unpaid interest
thereon at the applicable Loan Rate from the date interest was last paid to the
end of the Collection Period during which such Mortgage Loan became a
Liquidated Mortgage Loan) of such Liquidated Mortgage Loan immediately prior to
the final recovery of its Liquidation Proceeds.
Gross Margin: As to any Mortgage Loan, the percentage set forth as the
------------
"Gross Margin" for such Mortgage Loan on Exhibit C hereto.
Guaranteed Distribution: With respect to any Distribution Date and
-----------------------
Class, the sum of (i) the Guaranteed Principal Distribution Amount for such
Class and (ii) the amount to be distributed to the Holders of such Class of
Investor Certificates pursuant to Section 5.01(a)(iii) for such Distribution
Date.
Guaranteed Principal Distribution Amount: For any Class of Investor
----------------------------------------
Certificates shall mean with respect to (i) any Distribution Date on which the
sum of the Available Transferor Subordinated Amounts for both Loan Groups and
amounts on deposit in the Reserve Fund has been reduced to or equals zero,
other than the Distribution Date in February 2026, the amount, if any, required
to reduce the related Investor Certificate Principal Balance (after giving
effect to the distributions of Interest Collections and Principal Collections
that are allocable to principal on the related Certificates on such
Distribution Date) to the related Invested Amount immediately following such
Distribution Date and (ii) the Distribution Date in February 2026, the amount
by which the outstanding Investor Certificate Principal Balance (after giving
effect to Interest Collections allocable and distributable as principal on the
Certificates on such Distribution Date) exceeds the sum of the amounts on
deposit in the Collection Account available to be distributed to the Holders
pursuant to Section 5.01(b) hereof.
Increased Senior Lien Limitation: As defined in Section 3.01(a).
--------------------------------
Index: With respect to each Interest Rate Adjustment Date for a
-----
Mortgage Loan, the highest "prime rate" as published in the "Money Rates" table
of The Wall Street Journal as of the first business day of the calendar month.
Insurance Agreement: The insurance and indemnity agreement dated as of
-------------------
November 30, 1999 among the Depositor, the Sponsor, the Master Servicer, the
Trustee and the Credit Enhancer, including any amendments and supplements
thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the
------------------
Credit Enhancer) pursuant to any insurance policy covering a Mortgage Loan, or
amounts required to be paid by the Master Servicer pursuant to the last
sentence of Section 3.04, net of any component thereof (i) covering any
expenses incurred by or on behalf of the Master Servicer in connection with
obtaining such proceeds, (ii) that is applied to the restoration or repair of
the related Mortgaged Property, (iii) released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures or (iv) required to be
paid to any holder of a mortgage senior to such Mortgage Loan.
Interest Collections: As to any Distribution Date and Class, the sum
--------------------
of all payments by or on behalf of Mortgagors of Mortgage Loans in the related
Loan Group and any other amounts constituting interest (including without
limitation such portion of Insurance Proceeds and Net Liquidation Proceeds as
is allocable to interest on the applicable Mortgage Loan) collected by the
Master Servicer under the Mortgage Loans in such Loan Group (excluding any fees
(including annual fees) or late charges or similar administrative fees paid by
such Mortgagors) during the related Collection Period plus any optional advance
made by the Master Servicer pursuant to Section 4.05 herein minus (i) the
Servicing Fee payable to the Master Servicer with respect to the related
Collection Period and Loan Group and (ii) any such optional advance for which
the Master Servicer has been reimbursed. The terms of the related Credit Line
Agreement shall determine the portion of each payment in respect of such
Mortgage Loan that constitutes principal or interest.
Interest Formula Rate: As to either Class of Investor Certificates,
---------------------
the lesser of the rates set forth in clauses (i) and (iii) of the definitions
of Class A-1 Certificate Rate and Class A-2 Certificate Rate, respectively.
Interest Period: With respect to any Distribution Date other than the
---------------
first Distribution Date, the period beginning on the preceding Distribution
Date and ending on the day preceding such Distribution Date, and in the case of
the first Distribution Date, the period beginning on the Closing Date and
ending on the day preceding the first Distribution Date.
Interest Rate Adjustment Date: With respect to each Mortgage Loan, any
-----------------------------
date on which the Loan Rate is adjusted in accordance with the related Credit
Line Agreement.
Intervening Assignments: As defined in Section 2.01(iv).
-----------------------
Invested Amount: With respect to any Class and Distribution Date, an
---------------
amount equal to the related Original Invested Amount minus (i) the amount of
Principal Collections on the related Loan Group previously distributed to the
related Class of Investor Certificates and minus (ii) any related Investor Loss
Amounts for prior Distribution Dates.
Investor Certificate: Any Class A-1 or Class A-2 Certificate executed
--------------------
and authenticated by the Trustee substantially in the form set forth in Exhibit
A hereto.
Investor Certificate Distribution Amount: As to either Class of
----------------------------------------
Investor Certificates and any Distribution Date, the sum of all amounts to be
distributed to the Holders of such Class of Investor Certificates pursuant to
Article V hereof.
Investor Certificate Rate: The Class A-1 Investor Certificate Rate or
-------------------------
Class A-2 Investor Certificate Rate, as applicable.
Investor Certificateholder: The Holder of an Investor Certificate.
--------------------------
Investor Certificate Interest: With respect to any Class and
-----------------------------
Distribution Date, interest for the related Interest Period at the applicable
Investor Certificate Rate on the related Investor Certificate Principal Balance
as of the first day of such Interest Period (after giving effect to the
distributions made on the first day of such Interest Period).
Investor Certificate Principal Balance: With respect to any
--------------------------------------
Distribution Date and Class of Investor Certificates, (a) the related Original
Investor Certificate Principal Balance less (b) the aggregate of amounts
actually distributed as principal on such Class of Investor Certificates.
Investor Fixed Allocation Percentage: As to either Class of Investor
------------------------------------
Certificates on each date of calculation within a Collection Period (i) prior
to the date on which the Transfer or Interest first equals the related Required
Transferor Subordinated Amount, the greater of (i) 98.5% and (ii) 100% minus
the percentage obtained by dividing the amount of the Transferor Interest
allocable to a Loan Group at the beginning of such Collection Period by the
related Loan Group Balance at the beginning of such Collection Period and (ii)
thereafter 98.5%.
Investor Floating Allocation Percentage: With respect to any
---------------------------------------
Distribution Date and Class, the percentage equivalent of a fraction, the
numerator of which is the related Invested Amount at the close of business on
the preceding Distribution Date (or at the Closing Date in the case of the
first Distribution Date) and the denominator of which is the related Loan Group
Balance, calculated as of the beginning of the related Collection Period.
Investor Interest Collections: As to any Class and Distribution Date,
-----------------------------
the product of (i) the Interest Collections received with respect to the
related Loan Group during the related Collection Period and (ii) the related
Investor Floating Allocation Percentage for such Distribution Date.
Investor Loss Amount: With respect to any Class and Distribution Date,
--------------------
the amount equal to the product of (i) the Investor Floating Allocation
Percentage for such Class and Distribution Date and (ii) the aggregate of the
Liquidation Loss Amounts on the Mortgage Loans in the related Loan Group for
such Distribution Date.
Investor Loss Reduction Amount: With respect to any Class and
------------------------------
Distribution Date, the portion, if any, of the Investor Loss Amount for such
Class and Distribution Date and all prior Distribution Dates that has not been
distributed to the Holders of such Class of Investor Certificates on such
Distribution Date pursuant to Section 5.01(a)(iv), 5.01(a)(v) or 5.01(a)(ix) or
by way of a Credit Enhancement Draw Amount.
Investor Principal Collections: As to any Class and Distribution Date,
------------------------------
the related Investor Fixed Allocation Percentage of Principal Collections on
the Mortgage Loans in the related Loan Group in respect of such Distribution
Date.
LIBOR: As to any date, the rate for United States dollar deposits for
-----
one month which appears on the Telerate Screen Page 3750 as of 11:00 A.M.,
London time. If such rate does not appear on such page (or such other page as
may replace that page on that service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be
reasonably selected by the Depositor after consultation with the Trustee), the
rate will be the Reference Bank Rate. If no such quotations can be obtained and
no Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Distribution Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or
------------------
(ii) a day on which banking institutions in the State of New York or in the
city of London, England are required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
----
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 7.02 hereof shall not be
deemed to constitute a Lien.
Lifetime Rate Cap: With respect to each Mortgage Loan with respect to
-----------------
which the related Mortgage Note provides for a lifetime rate cap, the maximum
Loan Rate permitted over the life of such Mortgage Loan under the terms of the
related Credit Line Agreement, as set forth on the Mortgage Loan Schedule.
Liquidated Mortgage Loan: As to any Distribution Date, any Mortgage
------------------------
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related
Collection Period, that all Liquidation Proceeds which it expects to recover
with respect to the disposition of such Mortgage Loan or the related REO have
been recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead)
--------------------
which are incurred by the Master Servicer in connection with the liquidation of
any Mortgage Loan and not recovered under any insurance policy, including,
without limitation, legal fees and expenses, any unreimbursed amount expended
pursuant to Section 3.06 (including, without limitation, amounts advanced to
correct defaults on any mortgage loan which is senior to such Mortgage Loan and
amounts advanced to keep current or pay off a mortgage loan that is senior to
such Mortgage Loan) respecting the related Mortgage Loan and any related and
unreimbursed expenditures with respect to real estate property taxes, water or
sewer taxes, condominium association dues, property restoration or preservation
or insurance against casualty, loss or damage.
Liquidation Loss Amount: With respect to any Distribution Date and any
-----------------------
Mortgage Loan that becomes a Liquidated Mortgage Loan during the related
Collection Period, the unrecovered Asset Balance thereof at the end of such
Collection Period, after giving effect to the Net Liquidation Proceeds applied
in reduction of such Asset Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not
--------------------
including amounts drawn under the Policy) received in connection with the
liquidation of any Mortgage Loan or related REO, whether through trustee's
sale, foreclosure sale or otherwise.
Loan Group: Loan Group 1 or Loan Group 2, as applicable.
----------
Loan Group 1: All Mortgage Loans identified as Loan Group 1 Mortgage
------------
Loans on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Loan Group 2 Mortgage
------------
Loans on the Mortgage Loan Schedule.
Loan Group Balance: The Loan Group 1 Balance or the Loan Group 2
------------------
Balance, as applicable.
Loan Group 1 Balance: With respect to any date, the aggregate of the
--------------------
Asset Balances of all Mortgage Loans in Loan Group 1 as of such date.
Loan Group 2 Balance: With respect to any date, the aggregate of the
--------------------
Asset Balances of all Mortgage Loans in Loan Group 2 as of such date.
Loan Group 1 Deficiency Amount: As defined in Section 5.01(e) hereof.
------------------------------
Loan Group 2 Deficiency Amount: As defined in Section 5.01(e) hereof.
------------------------------
Loan Group Factor: With respect to any Class and Distribution Date,
-----------------
the percentage, carried to seven places, obtained by dividing the Investor
Certificate Principal Balance for such Class and Distribution Date by the
Original Investor Certificate Principal Balance for such Class.
Loan Rate: With respect to any Mortgage Loan and as of any day, the
---------
per annum rate of interest applicable under the related Credit Line Agreement
to the calculation of interest for such day on the Asset Balance of such
Mortgage Loan.
Loan Rate Cap: With respect to each Mortgage Loan, the lesser of (i)
-------------
the Lifetime Rate Cap, if any, or (ii) the applicable state usury ceiling, if
any.
Loan-to-Value Ratio: As of any date of determination with respect to
-------------------
any mortgage loan, the percentage equivalent of a fraction, the numerator of
which is the outstanding principal balance of such mortgage loan as of such
date of determination and the denominator of which is the Valuation of the
related Mortgage Property.
Managed Amortization Period: The period from the Closing Date to and
---------------------------
including the Distribution Date in December 2004.
Master Servicer: Countrywide Home Loans, Inc., a New York corporation
---------------
and any successor thereto and any successor hereunder.
Maximum Principal Payment: With respect to any Class and Distribution
-------------------------
Date, the Investor Fixed Allocation Percentage of the Principal Collections
from the Mortgage Loans in the related Loan Group for such Distribution Date.
Maximum Rate: As to any Class and Interest Period, the Weighted
------------
Average Net Loan Rate for the Mortgage Loans in the related Loan Group for the
Collection Period during which such Interest Period begins (adjusted to an
effective rate reflecting accrued interest calculated on the basis of the
actual number of days in the Collection Period commencing in the month in which
such Interest Period commences and a year assumed to consist of 360 days).
Minimum Monthly Payment: With respect to any Mortgage Loan and any
-----------------------
month, the minimum amount required to be paid by the related Mortgagor in that
month.
Minimum Transferor Interest: With respect to any date within any
---------------------------
Collection Period, an amount equal to the lesser of (a) 5% of the related Loan
Group Balance at the end of immediately preceding Collection Period (or at the
Closing Date, in the case of any such date within the initial Collection
Period) and (b) 1.5% of the Cut-Off Date Loan Group Balance for the related
Loan Group.
Moody's: Moody's Investors Service, Inc. or its successor in interest.
-------
Mortgage: The mortgage, deed of trust or other instrument creating a
--------
first or second lien on an estate in fee simple interest in real property
securing a Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01
-------------
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: The mortgage loans, including Additional Balances with
--------------
respect thereto, that are transferred and assigned to the Trustee pursuant to
Section 2.01, together with all related Mortgage Files, exclusive of Mortgage
Loans that are retransferred to the Depositor, the Master Servicer or the
Sponsor or purchased by the Master Servicer from time to time pursuant to
Section 2.02, 2.04, 2.05, 2.06 or 3.06, as from time to time are held as a part
of the Trust. The Mortgage Loans originally so held are identified in the
Mortgage Loan Schedule delivered on the Closing Date. The Mortgage Loans shall
also include any Eligible Substitute Mortgage Loan substituted by the Sponsor
for a Defective Mortgage Loan pursuant to Sections 2.02 and 2.04.
Mortgage Loan Schedule: With respect to any date, the schedule of
----------------------
Mortgage Loans included in the Trust on such date. The initial schedule of
Mortgage Loans as of the Cut-off Date is the schedule set forth herein as
Exhibit C, which schedule is set forth by Loan Group as to each Mortgage Loan
(i) the Cut-off Date Asset Balance, (ii) the Credit Limit, (iii) the Gross
Margin, (iv) the Lifetime Rate Cap, (v) the account number, (vi) the current
Loan Rate, (vii) the Combined Loan-to-Value Ratio, (viii) a code specifying the
property type, (ix) a code specifying documentation type and (x) a code
specifying lien position. The Mortgage Loan Schedule will be deemed to be
amended from time to time to reflect Additional Balances. It is not the
responsibility of the Trustee to prepare the Mortgage Loan Schedule.
Mortgage Note: With respect to a Mortgage Loan, the Credit Line
-------------
Agreement pursuant to which the related mortgagor agrees to pay the
indebtedness evidenced thereby and secured by the related Mortgage.
Mortgaged Property: The underlying property, including any real
------------------
property and improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Credit Line Agreement.
---------
Net Liquidation Proceeds: With respect to any Liquidated Mortgage
------------------------
Loan, Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: With respect to any Mortgage Loan and as to any day,
-------------
the Loan Rate less (i) the Servicing Fee Rate, (ii) the Premium Percentage,
(iii) the Trustee Fee Rate and, (iv) commencing with the Distribution Date in
December 2000, 0.50% per annum.
Officer's Certificate: A certificate (i) signed by the Chairman of the
---------------------
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor, the Sponsor, the Transferor or the Master
Servicer, or (ii), if provided for in this Agreement, signed by a Servicing
Officer, as the case may be, and delivered to the Depositor and the Trustee, as
the case may be, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
------------------
Trustee, who may be in-house counsel for the Depositor, the Sponsor, the Master
Servicer or the Transferor (except that any opinion pursuant to Sections 4.03
or 7.04 or relating to taxation must be an opinion of independent outside
counsel) and who, in the case of opinions delivered to the Credit Enhancer or
the Rating Agency, is reasonably acceptable to it.
Original Invested Amount: With respect to the Class A-1 Investor
------------------------
Certificates, $320,000,000 and, with respect to the Class A-2 Investor
Certificates, $120,000,000.
Original Investor Certificate Principal Balance: With respect to the
-----------------------------------------------
Class A-1 Investor Certificates, $320,000,000 and, with respect to the Class
A-2 Investor Certificates, $120,000,000.
Overcollateralization Amount: With respect to a Class of Investor
----------------------------
Certificates, at the time of reference thereto, the amount, if any, by which
the Invested Amount for the related Loan Group exceeds the related Investor
Certificate Principal Balance.
Overcollateralization Step-Down Amount: With respect to any Class and
--------------------------------------
Distribution Date, the lesser of (i) the sum of (a) the amount on deposit in
the Reserve Fund and (b) the Scheduled Principal Collections Distribution
Amount for such Class without giving effect to the proviso in the definition
thereof and (ii) the excess of the related Overcollateralization Amount over
the related Required Overcollateralization Amount for such Distribution Date.
Paying Agent: Any paying agent appointed pursuant to Section 6.06.
------------
Percentage Interest: As to any Investor Certificate, the percentage
-------------------
obtained by dividing the principal denomination of such Investor Certificate by
the Original Investor Certificate Principal Balance of the related Class of
Investor Certificates.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Policy: The certificate guaranty insurance policy number AB0320BE, and
------
all endorsements thereto, dated as of the Closing Date, issued by the Credit
Enhancer to the Trustee for the benefit of the Investor Certificateholders.
Policy Payments Account: As defined in Section 4.02(b).
-----------------------
Pool Balance: With respect to any date, the sum of the Loan Group 1
------------
Balance and the Loan Group 2 Balance as of such date.
Preference Claim: As defined in Section 4.02(d).
----------------
Premium: As defined in the Insurance Agreement.
-------
Premium Percentage: As defined in the Insurance Agreement.
------------------
Principal Collections: As to the Mortgage Loans in any Loan Group and
---------------------
any Distribution Date, the sum of all payments by or on behalf of the related
Mortgagors and any other amounts constituting principal (including but not
limited to any portion of Insurance Proceeds or Net Liquidation Proceeds
allocable to principal of the applicable Mortgage Loan, and Transfer Deposit
Amounts, but excluding Foreclosure Profits) collected by the Master Servicer
under the Mortgage Loans in such Loan Group during the related Collection
Period. The terms of the related Credit Line Agreement shall determine the
portion of each payment in respect of a Mortgage Loan that constitutes
principal or interest.
Purchase Agreement: The Purchase Agreement, dated as of the Cut-off
------------------
Date, between Countrywide Home Loans, Inc., as seller, and the Depositor, as
purchaser, with respect to the Mortgage Loans.
Rapid Amortization Commencement Date: The earlier of (i) the
------------------------------------
Distribution Date in December 2004 and (ii) the Distribution Date next
succeeding the Collection Period in which a Rapid Amortization Event is deemed
to occur pursuant to Section 11.01.
Rapid Amortization Event: As defined in Section 11.01.
------------------------
Rapid Amortization Period: The period following the Managed
-------------------------
Amortization Period until the termination of the Trust pursuant to Section
10.01.
Rating Agency: Any statistical credit rating agency, or its successor,
-------------
that rated the Investor Certificates at the request of the Depositor at the
time of the initial issuance of the Certificates. If such agency or a successor
is no longer in existence, "Rating Agency" shall be such statistical credit
rating agency, or other comparable Person, designated by the Depositor and the
Credit Enhancer, notice of which designation shall be given to the Trustee.
References herein to the highest short-term unsecured rating category of a
Rating Agency shall mean A-1+ or better in the case of Standard & Poor's and
P-1 or better in the case of Moody's and in the case of any other Rating Agency
shall mean the ratings such other Rating Agency deems equivalent to the
foregoing ratings. References herein to the highest long-term rating category
of a Rating Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa"
in the case of Moody's and in the case of any other Rating Agency, the rating
such other Rating Agency deems equivalent to the foregoing ratings.
Record Date: The last day preceding the related Distribution Date;
-----------
provided, however, that following the date on which Definitive Certificates are
available pursuant to Section 6.02(c) the Record Date shall be the last day of
the calendar month preceding the month in which the related Distribution Date
occurs.
Reference Bank Rate: As to any Interest Period as follows: the
-------------------
arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth of
a percent) of the offered rates for United States dollar deposits for one month
which are offered by the Reference Banks as of 11:00 A.M., London time, on the
second LIBOR Business Day prior to the first day of such Interest Period to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the outstanding Investor Certificate Principal Balance;
provided that at least two such Reference Banks provide such rate. If fewer
than two offered rates appear, the Reference Bank Rate will be the arithmetic
mean of the rates quoted by one or more major banks in New York City, selected
by the Depositor after consultation with the Trustee, as of 11:00 A.M., New
York City time, on such date for loans in U.S. dollars to leading European
banks for a period of one month in amounts approximately equal to the
outstanding Investor Certificate Principal Balance. If no such quotations can
be obtained, the Reference Bank Rate shall be LIBOR applicable to the preceding
Interest Period.
Reference Banks: Three major banks that are engaged in transactions in
---------------
the London interbank market, selected by the Depositor after consultation with
the Trustee.
REO: A Mortgaged Property that is acquired by the Trust in foreclosure
---
or by deed in lieu of foreclosure.
Required Amount: With respect to any Class and Distribution Date, the
---------------
amount, if any, by which the sum of the amounts distributable pursuant to
Sections 5.01(a)(i) through 5.01(a)(iv) on such Class on such Distribution Date
exceed Investor Interest Collections for such Class for such Distribution Date.
Required Overcollateralization Amount: As defined in the Insurance
-------------------------------------
Agreement.
Required Transferor Subordinated Amount: As defined in the Insurance
---------------------------------------
Agreement.
Reserve Fund: The Eligible Account established and maintained for the
------------
benefit of the Holders of the Investor Certificates and the Credit Enhancer in
accordance with Section 3.02(c) hereof.
Reserve Fund Deposit: As to any Distribution Date after the date on
--------------------
which the Required Overcollateralization Amount has first been reached, the
amount, if any, necessary to cause the amount on deposit in the Reserve Fund,
after giving effect to any withdrawals therefrom on such Distribution Date, to
equal the Specified Reserve Fund Requirement for such Distribution Date.
Responsible Officer: When used with respect to the Trustee, any
-------------------
officer of the Trustee with direct responsibility for the administration of
this Agreement and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
Revolving Period: With respect to each Mortgage Loan, the period
----------------
specified for such Mortgage Loan in the related Credit Line Agreement, during
which the Mortgagor is permitted to make Draws.
Rolling Six Month Delinquency Rate: As defined in the Insurance
----------------------------------
Agreement.
SAIF: The Savings Association Insurance Fund, as from time to time
----
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Savings Association Insurance Fund is not existing and
performing duties now assigned to it, the body performing such duties on such
date.
Scheduled Principal Collections Distribution Amount: With respect to
---------------------------------------------------
any Distribution Date during the Managed Amortization Period and a Class of
Investor Certificates, an amount equal to the lesser of (i) the related Maximum
Principal Payment and (ii) the related Alternative Principal Payment; provided,
however, that on any Distribution Date, such amount shall be reduced by the
related Overcollateralization Step-Down Amount for such Distribution Date. With
respect to any Distribution Date in respect of the Rapid Amortization Period,
the related Maximum Principal Payment; provided, however, that on any
Distribution Date, such amount shall be reduced by the related
Overcollateralization Step-Down Amount for such Class and Distribution Date.
Servicing Certificate: A certificate completed and executed by a
---------------------
Servicing Officer in accordance with Section 4.01.
Servicing Fee: With respect to any Loan Group and Distribution Date,
-------------
the product of (i) the Servicing Fee Rate divided by 12 and (ii) the Loan
Balance of such Loan Group as of the first day of the Collection Period
preceding such Distribution Date (or as of the close of business on the Cut-off
Date with respect to the first Distribution Date).
Servicing Fee Rate: 0.50% per annum.
------------------
Servicing Officer: Any officer of the Master Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee (with a copy to the Credit Enhancer) by the Master Servicer on the
Closing Date, as such list may be amended from time to time.
Specified Reserve Fund Requirement: As to any Distribution Date, an
----------------------------------
amount equal to the excess of (i) the sum of the Required Overcollateralization
Amounts for both Loan Groups over (ii) the sum of the Overcollateralization
Amounts for both Loan Groups after giving effect to distributions to be made on
such Distribution Date.
Sponsor: Countrywide Home Loans, Inc., a New York corporation and any
-------
successor thereto.
Standard & Poor's: Standard & Poor's, a division of The McGraw-Hill
-----------------
Companies, Inc., or its successor in interest.
Subordinated Transferor Collections: With respect to any Loan Group
-----------------------------------
and Distribution Date, the related Interest Collections and the related
Principal Collections allocable to the Transferor Interest on such Distribution
Date up to the related Available Transferor Subordinated Amount for such Loan
Group and Distribution Date.
Telerate Screen Page 3750: The display designated as page 3750 on the
-------------------------
Bridge Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London inter-bank offered rates of major
banks).
Transfer Date: As defined in Section 2.06.
-------------
Transfer Deficiency: As defined in Section 2.02(b).
-------------------
Transfer Deposit Amount: As defined in Section 2.02(b).
-----------------------
Transfer Notice Date: As defined in Section 2.06.
--------------------
Transferor or Transferor Certificateholders: The Holders of the
-------------------------------------------
Transferor Certificates.
Transferor Certificates: The certificates executed and authenticated
-----------------------
by the Trustee substantially in the form set forth in Exhibit B hereto.
Transferor Collections: As to any Loan Group and any period, the sum
----------------------
of the related Transferor Interest Collections and the related Transferor
Principal Collections for such period.
Transferor Interest: With respect to any Loan Group and Distribution
-------------------
Date, the portion of the undivided interest in the related Loan Group that is
applicable to the Transferor. The initial Transferor Interest for each Loan
Group shall be $0.
Transferor Interest Collections: For any Loan Group, Interest
-------------------------------
Collections that are not Investor Interest Collections for such Loan Group.
Transferor Principal Balance: For any Class as of any date of
----------------------------
determination, the amount equal to (i) the Loan Group Balance for the related
Loan Group as of the close of business on the day next preceding such date of
determination less (ii) the related Invested Amount as of the close of business
on the preceding Distribution Date.
Transferor Principal Collections: On any Distribution Date, Principal
--------------------------------
Collections received on a Loan Group during the related Collection Period minus
the amount of such Principal Collections required to be distributed to Holders
of the related Class of Investor Certificates pursuant to Section 5.01(b).
Trust: The trust created by this Agreement, the corpus of which
-----
consists of the Mortgage Loans, related Credit Line Agreements such other
assets as shall from time to time be identified as deposited in the Collection
Account in accordance with this Agreement, property that secured a Mortgage
Loan and that has become REO, the interest of the Depositor in certain hazard
insurance policies maintained by the Mortgagors or the Master Servicer in
respect of the Mortgage Loans, the Policy, an assignment of the Depositor's
rights under the Purchase Agreement and all proceeds of each of the foregoing
(exclusive of payments of accrued interest on the Mortgage Loans which are due
on or prior to the Cut-off Date).
Trustee: Bank One, National Association or any successor Trustee
-------
appointed in accordance with this Agreement that has accepted such appointment
in accordance with this Agreement.
Trustee Fee: A fee which is separately agreed to between the Master
-----------
Servicer and the Trustee.
Trustee Fee Rate: The per annum rate at which the Trustee Fee is
----------------
calculated.
UCC: The Uniform Commercial Code, as amended from time to time, as in
---
effect in any specified jurisdiction.
Unpaid Investor Certificate Interest Shortfall: With respect to any
----------------------------------------------
Class and Distribution Date, the aggregate amount, if any, of Investor
Certificate Interest on such Class that was accrued in respect of a prior
Distribution Date and has not been distributed to Holders of such Class of
Investor Certificates.
Valuation: With respect to any Mortgaged Property, the lesser of (i)
---------
the Appraised Value of the Mortgaged Property and (ii) in the case of a
Mortgaged Property purchased within one year of the origination of the related
Mortgage Loan, the purchase price of the Mortgaged Property.
Weighted Average Net Loan Rate: As to any Loan Group and Collection
------------------------------
Period, the average of the daily Net Loan Rate for each Mortgage Loan in such
Loan Group (assuming that each Mortgage Loan is fully indexed) for each day
during the related Billing Cycle, weighted on the basis of the daily average of
the related Asset Balances outstanding for each day in such Billing Cycle for
each Mortgage Loan in such Loan Group as determined by the Master Servicer in
accordance with the Master Servicer's normal servicing procedures.
Section 1.02. Interest Calculations. All calculations of interest
---------------------
hereunder that are made in respect of the Asset Balance of a Mortgage Loan
shall be made on a daily basis using a 365-day year. All calculations of
interest on the Investor Certificates shall be made on the basis of the actual
number of days in an Interest Period and a year assumed to consist of 360 days.
The calculation of the Servicing Fee shall be made on the basis of a 360-day
year consisting of twelve 30-day months. All dollar amounts calculated
hereunder shall be rounded to the nearest cent with one-half of one cent being
rounded down.
<PAGE>
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates;
Tax Treatment
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to
--------------------------------------------------------
Fund Advances Under Credit Line Agreements. (a) The Depositor, concurrently
- ------------------------------------------
with the execution and delivery of this Agreement, does hereby transfer,
assign, set over and otherwise convey to the Trust without recourse (subject to
Sections 2.02 and 2.04) all of its right, title and interest in and to (i) each
Mortgage Loan, including its Asset Balance (including all Additional Balances)
and all collections in respect thereof received after the Cut-off Date
(excluding payments in respect of accrued interest due on or prior to the
Cut-off Date); (ii) property that secured a Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure; (iii) the Depositor's rights under
the Purchase Agreement; (iv) the Depositor's rights under the hazard insurance
policies; (v) all other assets included or to be included in the Trust for the
benefit of Certificateholders and the Credit Enhancer; and (vi) all proceeds of
the foregoing; provided, however, neither the Trustee nor the Trust assumes the
obligation under any Credit Line Agreement that provides for the funding of
future advances to the Mortgagor thereunder, and neither the Trust nor the
Trustee shall be obligated or permitted to fund any such future advances.
Additional Balances shall be part of the related Asset Balance and are hereby
transferred to the Trust on the Closing Date pursuant to this Section 2.01, and
therefore part of the Trust property. In addition, on or prior to the Closing
Date, the Depositor shall cause the Credit Enhancer to deliver the Policy to
the Trustee for the benefit of the Investor Certificateholders. The foregoing
transfer, assignment, set-over and conveyance to the Trust shall be made to the
Trustee, on behalf of the Trust, and each reference in this Agreement to such
transfer, assignment, set-over and conveyance shall be construed accordingly.
The Depositor agrees (subject to paragraph (c) below) to take or cause
to be taken such actions and execute such documents, including without
limitation, the filing of all necessary continuation statements for the UCC-1
financing statements filed in the State of California (which shall have been
filed within 90 days of the Closing Date) describing the Cut-off Date Asset
Balances and Additional Balances and naming the Depositor as debtor and the
Trustee as secured party and any amendments to UCC-1 financing statements
required to reflect a change in the name or corporate structure of the
Depositor or the filing of any additional UCC-1 financing statements due to the
change in the principal office of the Depositor (within 90 days of any event
necessitating such filing) as are necessary to perfect and protect the
Certificateholders' and Credit Enhancer's interests in each Cut-off Date Asset
Balance and Additional Balances and the proceeds thereof.
In connection with such transfer and assignment by the Depositor, the
Depositor shall deliver or cause the Sponsor to deliver to the Trustee the
Mortgage Loan Schedule by the Closing Date and (a) no later than the Closing
Date, with respect to no less than 50% of the Mortgage Loans, and (b) within
thirty (30) days following the Closing Date, with respect to the remaining
Mortgage Loans, the following documents or instruments with respect to each
Mortgage Loan:
(i) the original Mortgage Note endorsed in blank;
(ii) an original Assignment of Mortgage in blank in recordable
form;
(iii) the original recorded Mortgage or, if, in connection with
any Mortgage Loan, the original recorded Mortgage with evidence of
recording thereon cannot be delivered on or prior to the Closing Date
because of a delay caused by the public recording office where such
original Mortgage has been delivered for recordation or because such
original Mortgage has been lost, the Sponsor, at the direction of the
Depositor, shall deliver or cause to be delivered to the Custodian, as
agent for the Trustee, a true and correct copy of such Mortgage,
together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Sponsor or the
Depositor, which may be in the form of a blanket certificate covering
more than one Mortgage, stating that such original Mortgage has been
dispatched to the appropriate public recording official or (ii) in the
case of an original Mortgage that has been lost, a certificate by the
appropriate county recording office where such Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if any
("Intervening Assignments"), with evidence of recording thereon,
showing a complete chain of title to the Mortgage from the originator
to the Depositor or, if any such original Intervening Assignment has
not been returned from the applicable recording office or has been
lost, a true and correct copy thereof, together with (i) in the case
of a delay caused by the public recording office, an Officer's
Certificate of the Sponsor or the Depositor, which may be in the form
of a blanket certificate covering more than one Intervening
Assignment, stating that such original Intervening Assignment has been
dispatched to the appropriate public recording official for
recordation or (ii) in the case of an original Intervening Assignment
that has been lost, a certificate by the appropriate county recording
office where such Mortgage is recorded;
(v) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(vi) the original of any guaranty executed in connection with
the Mortgage Note;
(vii) the original of each assumption, modification,
consolidation or substitution agreement, if any, relating to the
Mortgage Loan; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage;
provided, however, that as to any Mortgage Loan, if (a) as evidenced by an
Opinion of Counsel delivered to and in form and substance satisfactory to the
Trustee and the Credit Enhancer, (x) an optical image or other representation
of the related documents specified in clauses (i) through (vii) above are
enforceable in the relevant jurisdictions to the same extent as the original of
such document and (y) such optical image or other representation does not
impair the ability of an owner of such Mortgage Loan to transfer its interest
in such Mortgage Loan, and (b) the retention of such documents in such format
will not result in a reduction in the then current rating of the Investor
Certificates, without regard to the Policy, such optical image or other
representation may be held by the Trustee or assignee in lieu of the physical
documents specified above.
The Sponsor hereby confirms to the Trustee that it has caused the
portions of the Electronic Ledgers relating to the Mortgage Loans to be clearly
and unambiguously marked, and has made the appropriate entries in its general
accounting records, to indicate that such Mortgage Loans have been transferred
to the Trust at the direction of the Depositor. The Master Servicer hereby
confirms to the Trustee that it has clearly and unambiguously made appropriate
entries in its general accounting records indicating that such Mortgage Loans
constitute part of the Trust and are serviced by it on behalf of the Trust in
accordance with the terms hereof.
Notwithstanding the characterization of the Investor Certificates as
debt for Federal, state and local income and franchise tax purposes, the
parties hereto intend to treat the transfer of the Mortgage Loans as provided
herein as a sale for accounting and other purposes, by the Depositor to the
Trust of all the Depositor's right, title and interest in and to the Mortgage
Loans and other property described above. In the event such transfer is deemed
not to be a sale as contemplated in the immediately preceding sentence, the
Depositor hereby grants to the Trust a security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans
whether now existing or hereafter created, all monies due or to become due on
the Mortgage Loans and all proceeds of any thereof; and this Agreement shall
constitute a security agreement under applicable law.
(b) In the event that neither the Depositor nor the Sponsor delivers
the Mortgage File for any Mortgage Loan to the Trustee as and when required
pursuant to paragraph (a) of this Section 2.01, such Mortgage Loan shall be
deemed to be retransferred, reassigned and otherwise reconveyed to the Sponsor,
subject to the conditions set forth in Section 2.02(b) (as if such Mortgage
Loan were otherwise subject to the provisions thereof). In the event of a
Transfer Deficiency, the Sponsor, within five (5) Business Days of notification
thereof by the Trustee, shall substitute an Eligible Substitute Mortgage Loan
for the related Mortgage Loan or, if unable to effect such substitution,
deposit into the Collection Account the Transfer Deposit Amount in immediately
available funds equal to the Transfer Deficiency (or a combination of
substitution and deposit). Any such substitution or deposit shall be
accomplished in the manner specified in, and have the effect set forth in,
Section 2.02(b) (as if the related Mortgage Loan were otherwise subject to the
provisions thereof).
(c) Should the long term senior unsecured corporate debt rating of
Countrywide Home Loans, Inc. fall below "BBB" by Standard & Poor's or "Baa2" by
Moody's, as promptly as practicable but in no event more than 90 days following
the occurrence of such event, the Master Servicer shall, at its expense, (i)
either (x) request that the Trustee deliver to it the original Assignment of
Mortgage previously delivered to the Trustee pursuant to paragraph (v)(ii) of
this Section 2.01 and thereupon record such Assignment of Mortgage in favor of
the Trustee (which may be a blanket assignment if permitted by applicable law)
in the appropriate real property or other records or (y) deliver to the Trustee
an Opinion of Counsel addressed to the Trustee and the Credit Enhancer to the
effect that recording is not required to protect the Trustee's right, title and
interest in and to the related Mortgage Loan or, in case a court should
recharacterize the sale of the Mortgage Loans as a financing, to perfect a
first priority security interest in favor of the Trustee in the related
Mortgage Loan, which Opinion of Counsel also shall be reasonably acceptable to
each of the Rating Agencies (as evidenced in writing) and the Credit Enhancer.
Section 2.02. Acceptance by Trustee. (a) The Trustee hereby
---------------------
acknowledges its receipt of the Policy and declares that the Trustee holds and
will hold such Policy, and will hold all other documents delivered to it
pursuant to Section 2.01, and all amounts received by it thereunder and
hereunder, in trust, upon the terms herein set forth, for the use and benefit
of all present and future Certificateholders and the Credit Enhancer.
On the Closing Date, the Trustee shall execute and deliver to the
Depositor, the Master Servicer and the Sponsor (with a copy to the Credit
Enhancer) an Initial Certification in the form annexed hereto as Exhibit H-1.
Based on its review and examination, and only as to the documents identified in
such Initial Certification, the Trustee shall acknowledge that such documents
appear regular on their face and relate to each Mortgage Loan. No later than
thirty-two (32) days after the Closing Date, if Mortgage Loans have been
delivered after the Closing Date pursuant to Section 2.01(a), third paragraph
clause (b), the Trustee shall execute and deliver to the Depositor, the Master
Servicer and the Sponsor (with a copy to the Credit Enhancer) a Delay Delivery
Certification in the form annexed hereto as Exhibit H-2. Based on its review
and examination, and only as to the documents identified in such Delay Delivery
Certification, the Trustee shall acknowledge that such documents appear regular
on their face and relate to each Mortgage Loan.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer and the Sponsor (with a copy to
the Credit Enhancer) a Final Certification in the form annexed hereto as
Exhibit I, with any applicable exceptions noted thereon.
If, in the course of its review in connection with the Final
Certification, the Trustee finds any document constituting a part of a Mortgage
File which does not meet the requirements of Section 2.01, the Trustee shall
list such as an exception in the Final Certification. The Sponsor shall
promptly correct or cure such defect within 90 days from the date it was so
notified of such defect.
The Trustee shall be under no duty or obligation to inspect, review or
examine said documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records or
that they are other than what they purport to be on their face.
In reviewing any Mortgage File pursuant to this Section, the Trustee
shall have no responsibility for determining whether any document is valid and
binding, whether the text of any assignment or endorsement is in proper or
recordable form (except, if applicable, to determine if the Trustee is the
assignee or endorsee), whether any document has been recorded in accordance
with the requirements of any applicable jurisdiction, or whether a blanket
assignment is permitted in any applicable jurisdiction, whether any Person
executing any document is authorized to do so or whether any signature thereon
is genuine, but shall only be required to determine whether a document has been
executed, that it appears to be what it purports to be, and, where applicable,
that it purports to be recorded.
(b) If (i) the time to correct or cure any defect in respect of any
Mortgage Loan of which the Trustee has notified the Sponsor and the Depositor
following the review pursuant to subsection (a) above has expired or if at any
time any loss is suffered by the Trustee on behalf of the Certificateholders or
the Credit Enhancer, in respect of any Mortgage Loan as a result of a defect in
any document constituting a part of its Mortgage File, or (ii) an Assignment of
Mortgage to the Trustee has not been recorded if, as and when required by
subsection (a) above, then on the next succeeding Business Day upon the deposit
to the Collection Account of the Transfer Deposit Amount, if any, and upon
satisfaction of the applicable conditions described herein, all right, title
and interest of the Trust in and to such Mortgage Loan shall be deemed to be
retransferred, reassigned and otherwise reconveyed, without recourse,
representation or warranty, to the Sponsor on such Business Day and the Asset
Balance of such Mortgage Loan shall be deducted from the Loan Group Balance of
the related Loan Group; provided, however, that interest accrued on the Asset
Balance of such Mortgage Loan to the end of the related Collection Period shall
be the property of the Trust. The Trustee shall determine if the reduction of
such Asset Balance from the related Loan Group Balance in accordance with the
preceding sentence would cause the related Transferor Principal Balance to be
less than the related Minimum Transferor Interest ("Transfer Deficiency"), in
which event the Trustee shall deliver written notice of such deficiency to the
Sponsor, and within five Business Days after the Business Day of such
retransfer the Sponsor shall either (x) substitute an Eligible Substitute
Mortgage Loan or (y) deposit into the Collection Account an amount (the
"Transfer Deposit Amount") in immediately available funds equal to the Transfer
Deficiency or a combination of both (x) and (y) above. Such reduction or
substitution and the actual payment of any Transfer Deposit Amount, if any,
shall be deemed to be payment in full for such Mortgage Loan. Upon receipt of
any Eligible Substitute Mortgage Loan or of written notification signed by a
Servicing Officer to the effect that the Transfer Deposit Amount in respect of
a Defective Mortgage Loan has been deposited into the Collection Account or, if
the related Transferor Principal Balance is not reduced below the related
Minimum Transferor Interest as a result of the deemed retransfer of a Defective
Mortgage Loan, then as promptly as practicable following such deemed transfer,
the Trustee shall execute such documents and instruments of transfer presented
by the Sponsor, in each case without recourse, representation or warranty, and
take such other actions as shall reasonably be requested by the Sponsor to
effect such transfer by the Trust of such Defective Mortgage Loan pursuant to
this Section. It is understood and agreed that the obligation of the Sponsor to
accept a transfer of a Defective Mortgage Loan and to either convey an Eligible
Substitute Mortgage Loan or to make a deposit of any related Transfer Deposit
Amount into the Collection Account shall constitute the sole remedy respecting
such defect available to Certificateholders, the Trustee and the Credit
Enhancer against the Sponsor.
The Master Servicer, promptly following the transfer of any Defective
Mortgage Loan or Eligible Substitute Mortgage Loan from or to the Trust
pursuant to this Section, shall amend the Mortgage Loan Schedule, deliver such
amended Mortgage Loan Schedule to the Trustee, and make appropriate entries in
its general account records to reflect such transfer. The Master Servicer
shall, following such retransfer, appropriately mark its records to indicate
that it is no longer servicing such Mortgage Loan on behalf of the Trust. The
Sponsor, promptly following such transfer, shall appropriately mark its
Electronic Ledger and make appropriate entries in its general account records
to reflect such transfer.
Notwithstanding any other provision of this Section, a retransfer of a
Defective Mortgage Loan to the Sponsor pursuant to this Section that would
cause the related Transferor Principal Balance to be less than the related
Minimum Transferor Interest shall not occur if either the Sponsor fails to
convey an Eligible Substitute Mortgage Loan or to deposit into the Collection
Account any related Transfer Deposit Amount required by this Section with
respect to the transfer of such Defective Mortgage Loan.
(c) As to any Eligible Substitute Mortgage Loan or Loans, the Sponsor
shall deliver to the Trustee with respect to such Eligible Substitute Mortgage
Loan or Loans such documents and agreements as are required to be held by the
Trustee in accordance with Section 2.01. For any Collection Period during which
the Sponsor substitutes one or more Eligible Substitute Mortgage Loans, the
Master Servicer shall determine the Transfer Deposit Amount which amount shall
be deposited by the Sponsor in the Collection Account at the time of
substitution. All amounts received in respect of the Eligible Substitute
Mortgage Loan or Loans during the Collection Period in which the circumstances
giving rise to such substitution occur shall not be a part of the Trust and
shall not be deposited by the Master Servicer in the Collection Account. All
amounts received by the Master Servicer during the Collection Period in which
the circumstances giving rise to such substitution occur in respect of any
Defective Mortgage Loan so removed by the Trust shall be deposited by the
Master Servicer in the Collection Account. Upon such substitution, the Eligible
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Sponsor shall be deemed to have made with
respect to such Eligible Substitute Mortgage Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in
Section 2.04. The procedures applied by the Sponsor in selecting each Eligible
Substitute Mortgage Loan shall not be materially adverse to the interests of
the Trustee, the Certificateholders and the Credit Enhancer.
(d) The Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. The Master Servicer shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File as come into the possession of the
Master Servicer from time to time.
Section 2.03. Representations and Warranties Regarding the Master
---------------------------------------------------
Servicer. The Master Servicer represents and warrants to the Trustee and the
- --------
Credit Enhancer that as of the Closing Date:
(i) The Master Servicer is a New York corporation, validly
existing and in good standing under the laws of the State of New York,
and has the corporate power to own its assets and to transact the
business in which it is currently engaged. The Master Servicer is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or any properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Master Servicer;
(ii) The Master Servicer has the power and authority to make,
execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of
the Master Servicer enforceable in accordance with its terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) The Master Servicer is not required to obtain the consent
of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for
such consent, license, approval or authorization, or registration or
declaration, as shall have been obtained or filed, as the case may be,
prior to the Closing Date;
(iv) The execution, delivery and performance of this Agreement
by the Master Servicer will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to
the Master Servicer or any provision of the Certificate of
Incorporation or Bylaws of the Master Servicer, or constitute a
material breach of any mortgage, indenture, contract or other
agreement to which the Master Servicer is a party or by which the
Master Servicer may be bound; and
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the
knowledge of the Master Servicer threatened, against the Master
Servicer or any of its properties or with respect to this Agreement or
the Certificates which in the opinion of the Master Servicer has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement.
The representations and warranties set forth in this Section shall survive the
sale and assignment of the Mortgage Loans to the Trust. Upon discovery of a
breach of any representations and warranties which materially and adversely
affects the interests of the Certificateholders or the Credit Enhancer, the
person discovering such breach shall give prompt written notice to the other
parties and to the Credit Enhancer. Within 90 days of its discovery or its
receipt of notice of breach, or, with the prior written consent of a
Responsible Officer of the Trustee, such longer period specified in such
consent, the Master Servicer shall cure such breach in all material respects.
Section 2.04. Representations and Warranties of the Sponsor Regarding
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the Mortgage Loans; Retransfer of Certain Mortgage Loans. (a) The Sponsor
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hereby represents and warrants to the Trustee and the Credit Enhancer that as
of the Cut-off Date, unless otherwise specifically set forth herein:
(i) As of the Closing Date, this Agreement constitutes a legal,
valid and binding obligation of the Sponsor, enforceable against the
Sponsor in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights generally and by the availability
of equitable remedies;
(ii) As of the Closing Date with respect to the Mortgage Loans
and as of the applicable date of substitution with respect to any
Eligible Substitute Mortgage Loan, either (A) the Purchase Agreement
constitutes a valid transfer and assignment to the Depositor of all
right, title and interest of the Sponsor in and to the Cut-off Date
Asset Balances with respect to the applicable Mortgage Loans, all
monies due or to become due with respect thereto (excluding payments
in respect of accrued interest due on or prior to the Cut-off Date),
and all proceeds of such Cut-off Date Asset Balances with respect to
the Mortgage Loans and such funds as are from time to time deposited
in the Collection Account (excluding any investment earnings thereon)
and all other property specified in the first paragraph of Section
2.01 as being part of the corpus of the Trust conveyed to the Trust by
the Sponsor, and upon payment for the Additional Balances, will
constitute a valid transfer and assignment to the Trustee of all
right, title and interest of the Sponsor in and to the Additional
Balances, all monies due or to become due with respect thereto, and
all proceeds of such Additional Balances and all other property
specified in the first paragraph of Section 2.01(a) relating to the
Additional Balances or (B) the Purchase Agreement or this Agreement,
as appropriate, constitutes a grant of a security interest (as defined
in the UCC as in effect in California) in such property to the Trustee
on behalf of the Trust. If this Agreement constitutes the grant of a
security interest to the Trust in such property, the Trust shall have
a first priority perfected security interest in such property, subject
to the effect of Section 9-306 of the UCC with respect to collections
on the Mortgage Loans that are deposited in the Collection Account in
accordance with the next to last paragraph of Section 3.02(b);
(iii) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan and as of the date any Additional Balance is
created, the information set forth in the Mortgage Loan Schedule for
such Mortgage Loans is true and correct in all material respects;
(iv) The applicable Cut-off Date Asset Balance has not been
assigned or pledged, and the Sponsor is the sole owner and holder of
such Cut-off Date Asset Balance free and clear of any and all liens,
claims, encumbrances, participation interests, equities, pledges,
charges or security interests of any nature, and has full right and
authority, under all governmental and regulatory bodies having
jurisdiction over the ownership of the applicable Mortgage Loan, to
sell, assign or transfer the same pursuant to the Purchase Agreement;
(v) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage Note and the Mortgage
with respect to each Mortgage Loan have not been assigned or pledged,
and immediately prior to the sale of the Mortgage Loans to the
Depositor, the Sponsor was the sole owner and holder of the Mortgage
Loan free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges or security
interests of any nature, and has full right and authority, under all
governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loans, to sell and assign the
same pursuant to the Purchase Agreement;
(vi) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage is a valid and
subsisting first or second lien, as set forth on the Mortgage Loan
Schedule with respect to each related Mortgage Loan, on the property
therein described, and as of the Cut-off Date the related Mortgaged
Property is free and clear of all encumbrances and liens having
priority over the first or second lien, as applicable, of such
Mortgage except for liens for (i) real estate taxes and special
assessments not yet delinquent; (ii) any first mortgage loan secured
by such Mortgaged Property and specified on the Mortgage Loan
Schedule; (iii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of
recording that are acceptable to mortgage lending institutions
generally; and (iv) other matters to which like properties are
commonly subject which do not materially interfere with the benefits
of the security intended to be provided by such Mortgage;
(vii) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, there is no valid offset, defense or
counterclaim of any obligor under any Credit Line Agreement or
Mortgage;
(viii) To the best knowledge of the Sponsor, as of the Closing
Date with respect to the Mortgage Loans and the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
there is no delinquent recording or other tax or fee or assessment
lien against any related Mortgaged Property;
(ix) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, there is no proceeding pending or, to the
best knowledge of the Sponsor, threatened for the total or partial
condemnation of the related Mortgaged Property, and such property is
free of material damage;
(x) To the best knowledge of the Sponsor, as of the Closing Date
with respect to the Mortgage Loans and the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
there are no mechanics' or similar liens or claims which have been
filed for work, labor or material affecting the related Mortgaged
Property which are, or may be, liens prior or equal to the lien of the
related Mortgage, except liens which are fully insured against by the
title insurance policy referred to in clause (xiv);
(xi) No Minimum Monthly Payment is more than 59 days delinquent
(measured on a contractual basis) and no more than 0.00% of the
Mortgage Loans in Loan Group 1 and no more than 0.00% of the Mortgage
Loans in Loan Group 2 (by Cut-off Date Loan Group Balance) were 30-59
days delinquent (measured on a contractual basis);
(xii) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, for each Mortgage Loan, the related Mortgage
File contains each of the documents and instruments specified to be
included therein;
(xiii) The related Mortgage Note and the related Mortgage at
origination complied in all material respects with applicable state
and federal laws, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to
the Mortgage Loan;
(xiv) Either a lender's title insurance policy or binder was
issued on the date of origination of the Mortgage Loan and each such
policy is valid and remains in full force and effect, or a title
search or guaranty of title customary in the relevant jurisdiction was
obtained with respect to a Mortgage Loan as to which no title
insurance policy or binder was issued;
(xv) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, none of the Mortgaged Properties is a mobile
home or a manufactured housing unit that is not considered or
classified as part of the real estate under the laws of the
jurisdiction in which it is located;
(xvi) As of the Cut-off Date for the Mortgage Loans in Loan
Group 1 and for the Mortgage Loans in Loan Group 2 no more than 0.36%
and 0.94%, respectively, of such Mortgage Loans, by aggregate
principal balance, are secured by Mortgaged Properties located in one
United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Mortgage Loan
was not in excess of 100%;
(xviii) No selection procedure reasonably believed by the
Sponsor to be adverse to the interests of the Certificateholders or
the Credit Enhancer was utilized in selecting the Mortgage Loans;
(xix) The Sponsor has not transferred the Mortgage Loans to the
Trust with any intent to hinder, delay or defraud any of its
creditors;
(xx) The Minimum Monthly Payment with respect to any Mortgage
Loan is not less than the interest accrued at the applicable Loan Rate
on the average daily Asset Balance during the interest period relating
to the date on which such Minimum Monthly Payment is due;
(xxi) Within 90 days of the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing
with respect to the Mortgage Loans, the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
the Sponsor will file UCC-1 financing statements with respect to the
Mortgage Loans;
(xxii) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, each Credit Line Agreement and each Mortgage
Loan is an enforceable obligation of the related Mortgagor, except as
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage
Loans and the applicable date of substitution with respect to any
Eligible Substitute Mortgage Loan, the Sponsor has not received a
notice of default of any senior mortgage loan related to a Mortgaged
Property that has not been cured by a party other than the Master
Servicer;
(xxiv) The definition of "prime rate" in each Credit Line
Agreement relating to a Mortgage Loan does not differ materially from
the definition in the form of Credit Line Agreement in Exhibit D;
(xxv) The weighted average remaining term to maturity of the
Mortgage Loans in Loan Group 1 and the Mortgage Loans in Loan Group 2
on a contractual basis as of the Cut-off Date for the Mortgage Loans
is approximately 279 months and 284 months, respectively. On each date
that the Loan Rates have been adjusted, interest rate adjustments on
the Mortgage Loans were made in compliance with the related Mortgage
and Mortgage Note and applicable law. Over the term of each Mortgage
Loan, the Loan Rate may not exceed the related Loan Rate Cap, if any.
The Loan Rate Caps for the Mortgage Loans in Loan Group 1 range
between 12.00% and 18.00% and the weighted average Loan Rate Cap for
Loan Group 1 is approximately 17.84%. The Loan Rate Caps for the
Mortgage Loans in Loan Group 2 range between 12.00% and 18.00% and the
weighted average Loan Rate Cap for Loan Group 2 is approximately
17.93%. The Gross Margins for the Mortgage Loans in Loan Group 1 range
between -1.75% and 7.63% and the weighted average Gross Margin is
approximately 2.33% as of the Cut-off Date for the Mortgage Loans in
Loan Group 1. The Gross Margins for the Mortgage Loans in Loan Group 2
range between 0.00% and 7.25% and the weighted average Gross Margin is
approximately 2.26% as of the Cut-off Date for the Mortgage Loans in
Loan Group 2. The Loan Rates on the Mortgage Loans in Loan Group 1
range between 5.88% and 13.70% and the weighted average Loan Rate on
the Mortgage Loans in Loan Group 1 is approximately 7.33%. The Loan
Rates on the Mortgage Loans in Loan Group 2 range between 5.85% and
13.5% and the weighted average Loan Rate on the Mortgage Loans in Loan
Group 2 is approximately 7.30%.
(xxvi) As of the Closing Date with respect to the Mortgage Loans
and the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, each Mortgaged Property consists of a single
parcel of real property with a one-to-four unit single family
residence erected thereon, or an individual condominium unit, planned
unit development unit or townhouse;
(xxvii) No more than 18.79% (by Cut-off Date Loan Group Balance)
of the Mortgage Loans in Loan Group 1 and no more than 20.15% (by
Cut-off Date Loan Group Balance) of the Mortgage Loans in Loan Group 2
are secured by real property improved by individual condominium units,
units in planned unit developments, townhouses or two-to-four family
residences erected thereon, and at least 81.21% (by Cut-off Date Loan
Group Balance) of the Mortgage Loans in Loan Group 1 and 79.85% (by
Cut-off Date Loan Group Balance) of the Mortgage Loans in Loan Group 2
are secured by real property with a detached one-family residence
erected thereon;
(xxviii) The Credit Limits on the Mortgage Loans in Loan Group 1
range between approximately $7,000 and $700,000 with an average of
approximately $34,414.81. The Credit Limits on the Mortgage Loans in
Loan Group 2 range between approximately $7,300 and $800,000 with an
average of approximately $44,708.75. As of the Cut-off Date for the
Mortgage Loans, no Mortgage Loan in Loan Group 1 had a principal
balance in excess of approximately $700,000 and no Mortgage Loan in
Loan Group 2 had a principal balance in excess of approximately
$800,000 and the average principal balance of the Mortgage Loans in
Loan Group 1 and Loan Group 2 is equal to approximately $22,785.53 and
$34,502.62, respectively;
(xxix) Approximately 2.78% and 97.22% of the Mortgage Loans in
Loan Group 1, by aggregate principal balance as of the Cut-off Date
for the Mortgage Loans, are first and second liens, respectively.
Approximately 2.17% and 97.83% of the Mortgage Loans in Loan Group 2,
by aggregate principal balance as of the Cut-off Date for the Mortgage
Loans, are first and second liens, respectively;
(xxx) All of the Mortgage Loans in Loan Group 1 have principal
balances that conform to Fannie Mae guidelines; and
(xxxi) As of the Closing Date, no more than 5.50% of the
Mortgage Loans, by aggregate principal balance, were appraised
electronically.
With respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of the Sponsor's knowledge or as to
which the Sponsor has no knowledge, if it is discovered by the Sponsor, the
Depositor, the Master Servicer, the Credit Enhancer or a Responsible Officer of
the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan then, notwithstanding the Sponsor's lack of knowledge
with respect to the substance of such representation and warranty being
inaccurate at the time the representation or warranty was made, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
(b) It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
respective Mortgage Files to the Trustee pursuant to Section 2.01 and the
termination of the rights and obligations of the Master Servicer pursuant to
Section 7.04 or 8.02. Upon discovery by the Sponsor, the Depositor, the Master
Servicer, the Credit Enhancer or a Responsible Officer of the Trustee of a
breach of any of the foregoing representations and warranties (other than the
representation and warranty set forth in Section 2.04(a)(iv) above), without
regard to any limitation set forth therein concerning the knowledge of the
Sponsor as to the facts stated therein, which materially and adversely affects
the interests of the Trust or the related Class of Investor Certificateholders
or the Credit Enhancer in the related Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties and the Credit
Enhancer. Within 90 days of its discovery or its receipt of notice of such
breach, the Sponsor shall use all reasonable efforts to cure such breach in all
material respects or shall, not later than the Business Day next preceding the
Distribution Date in the month following the Collection Period in which any
such cure period expired (or such later date that is acceptable to the Trustee
and the Credit Enhancer as evidenced by their written consents), either (a)
accept a transfer of such Mortgage Loan from the Trust or (b) substitute an
Eligible Substitute Mortgage Loan in the same manner and subject to the same
conditions as set forth in Section 2.02; provided, however, that the cure for
any breach of a representation and warranty relating to the characteristics of
the Mortgage Loans in the related Loan Group in the aggregate shall be a
repurchase of or substitution for only the Mortgage Loans necessary to cause
such characteristics to be in compliance with the related representation and
warranty. Upon accepting such transfer and making any required deposit into the
Collection Account or substitution of an Eligible Substitute Mortgage Loan, as
the case may be, the Sponsor shall be entitled to receive an instrument of
assignment or transfer from the Trustee to the same extent as set forth in
Section 2.02 with respect to the transfer of Mortgage Loans under that Section.
It is understood and agreed that the obligation of the Sponsor to
accept a transfer of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit in the Collection Account or to
substitute an Eligible Substitute Mortgage Loan, as the case may be, shall
constitute the sole remedy against the Sponsor respecting such breach available
to Investor Certificateholders, the Trustee on behalf of Investor
Certificateholders and the Credit Enhancer; provided, however, that the Sponsor
shall defend and indemnify the Trustee, the Credit Enhancer and the Investor
Certificateholders against all reasonable costs and expenses, and all losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel and the amount of any settlement entered into with the consent of the
Sponsor (such consent not to be unreasonably withheld), which may be asserted
against or incurred by any of them as a result of any third-party action
arising out of any breach of any such representation and warranty.
Notwithstanding the foregoing, with regard to any breach of the representation
and warranty set forth in Section 2.04(a)(iv), the sale and assignment of the
affected Mortgage Loans to the Trust shall be deemed void and the Sponsor shall
pay to the Trust the sum of (i) the amount of the related Asset Balances, plus
unpaid accrued interest on each such Asset Balance at the applicable Loan Rate
to the date of payment and (ii) the amount of any loss suffered by
Certificateholders or the Credit Enhancer with respect to the affected Mortgage
Loans.
Section 2.05. Covenants of the Depositor. The Depositor hereby
--------------------------
covenants that:
(a) Security Interests. Except for the transfer hereunder, the
Depositor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Mortgage Loan,
whether now existing or hereafter created, or any interest therein; the
Depositor will notify the Trustee of the existence of any Lien on any Mortgage
Loan immediately upon discovery thereof; and the Depositor will defend the
right, title and interest of the Trust in, to and under the Mortgage Loans,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Depositor; provided, however, that nothing in
this Section 2.05(a) shall prevent or be deemed to prohibit the Depositor from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Depositor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with
respect thereto.
(b) Negative Pledge. The Depositor hereby agrees not to transfer,
assign, exchange, pledge, finance, hypothecate, grant a security interest in or
otherwise convey the Transferor Certificates except in accordance with Sections
6.05 and 7.02.
(c) Additional Indebtedness. So long as the Investor Certificates are
outstanding the Depositor will not incur any debt other than debt that (i) is
non-recourse to the assets of the Depositor other than the mortgage loans
specifically pledged as security for such debt, or (ii) is subordinated in
right of payment to the rights of the Investor Certificateholders or (iii) is
assigned a rating by each of the Rating Agencies that is the same as the then
current rating of the Investor Certificates.
(d) Downgrading. The Depositor will not engage in any activity which
would result in a downgrading of the Investor Certificates.
(e) Amendment to Certificate of Incorporation. The Depositor will not
amend its Certificate of Incorporation without prior written notice to the
Rating Agencies and the Credit Enhancer.
(f) Principal Place of Business. The Depositor's principal place of
business is in California and it will not change its principal place of
business without prior written notice to the Rating Agencies and the Credit
Enhancer.
Section 2.06. Transfers of Mortgage Loans at Election of Transferor.
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Subject to the conditions set forth below, the Transferor may, but shall not be
obligated to, require the transfer of Mortgage Loans from the Trust to the
Transferor as of the close of business on a Distribution Date (the "Transfer
Date"). On the fifth Business Day (the "Transfer Notice Date") prior to the
Transfer Date designated in such notice, the Transferor shall give the Trustee,
the Master Servicer and the Credit Enhancer a notice of the proposed transfer
that contains a list of the Mortgage Loans to be transferred. Such transfers of
Mortgage Loans shall be permitted upon satisfaction of the following
conditions:
(i) No Rapid Amortization Event has occurred;
(ii) On the Transfer Date the Transferor Principal Balance with
respect to the related Loan Group (after giving effect to the removal
from such Loan Group of the Mortgage Loans proposed to be transferred)
exceeds the Minimum Transferor Interest;
(iii) The transfer of any Mortgage Loans on any Transfer Date
during the Managed Amortization Period shall not, in the reasonable
belief of the Transferor, cause a Rapid Amortization Event to occur or
an event which with notice or lapse of time or both would constitute a
Rapid Amortization Event;
(iv) On or before the Transfer Date, the Transferor shall have
delivered to the Trustee a revised Mortgage Loan Schedule, reflecting
the proposed transfer and the Transfer Date, and the Master Servicer
shall have marked the Electronic Ledger to show that the Mortgages
Loans transferred to the Transferor are no longer owned by the Trust;
(v) The Transferor shall represent and warrant that no selection
procedures reasonably believed by the Transferor to be adverse to the
interests of the Investor Certificateholders or the Credit Enhancer
were utilized in selecting the Mortgage Loans to be removed from the
Trust;
(vi) In connection with each transfer of Mortgage Loans pursuant
to this Section, each Rating Agency and the Credit Enhancer shall have
received on or prior to the related Transfer Notice Date notice of
such proposed transfer of Mortgage Loans and, prior to the Transfer
Date, each Rating Agency shall have notified the Trustee and the
Credit Enhancer in writing that such transfer of Mortgage Loans would
not result in a reduction or withdrawal of its then current rating of
the Investor Certificates without regard to the Policy;
(vii) The Transferor shall have delivered to the Trustee and the
Credit Enhancer an Officer's Certificate certifying that the items set
forth in subparagraphs (i) through (vi), inclusive, have been
performed or are true and correct, as the case may be. The Trustee may
conclusively rely on such Officer's Certificate, shall have no duty to
make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying; and
(viii) The Transferor shall have satisfied all requirements with
respect to such retransfer which may be imposed by the U.S. Department
of Labor after the Closing Date and prior to the date of such
retransfer in order to ensure that any administrative exemption from
the prohibited transaction rules of ERISA and the related excise tax
provisions of Section 4975 of the Code granted by such Department to
any underwriter of the Certificates shall continue to apply to the
purchase, holding and resale of Certificates by Plans and to the
servicing, management or operation of the Trust; provided, however,
that the Transferor shall not be required to satisfy such requirements
if it obtains an Opinion of Counsel to the effect that such retransfer
would not result in a non-exempt prohibited transaction.
Upon receiving the requisite information from the Transferor, the Master
Servicer shall perform in a timely manner those acts required of it, as
specified above. Upon satisfaction of the above conditions, on the Transfer
Date the Trustee shall deliver, or cause to be delivered, to the Transferor the
Mortgage File for each Mortgage Loan being so transferred, and the Trustee
shall execute and deliver to the Transferor such other documents prepared by
the Transferor as shall be reasonably necessary to transfer such Mortgage Loans
to the Transferor. Any such transfer of the Trust's right, title and interest
in and to Mortgage Loans shall be without recourse, representation or warranty
by or of the Trustee or the Trust to the Transferor.
Section 2.07. Execution and Authentication of Certificates. The
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Trustee, on behalf of the Trust, has caused to be executed, authenticated and
delivered to or upon the order of the Depositor, in exchange for the Trust,
concurrently with the sale, assignment and conveyance to the Trustee of the
Trust, Investor Certificates in authorized denominations and the Transferor
Certificates, together evidencing the ownership of the entire Trust.
Section 2.08. Tax Treatment. It is the intention of the Depositor, the
-------------
Transferor and the Investor Certificateholders that the Investor Certificates
will be indebtedness of the Transferor for federal, state and local income and
franchise tax purposes and for purposes of any other tax imposed on or measured
by income. The Transferor, the Depositor, the Trustee and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Investor
Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest therein) agrees to
treat the Investor Certificates (or beneficial interest therein), for purposes
of federal, state and local income or franchise taxes and any other tax imposed
on or measured by income, as indebtedness of the Transferor secured by the
assets of the Trust and to report the transactions contemplated by this
Agreement on all applicable tax returns in a manner consistent with such
treatment. Each Investor Certificateholder agrees that it will cause any
Certificate Owner acquiring an interest in an Investor Certificate through it
to comply with this Agreement as to treatment of the Investor Certificates as
indebtedness for federal, state and local income and franchise tax purposes and
for purposes of any other tax imposed on or measured by income. The Trustee
will prepare and file all tax reports required hereunder.
Section 2.09. Representations and Warranties of the Depositor. The
-----------------------------------------------
Depositor represents and warrants to the Trustee on behalf of the
Certificateholders and the Credit Enhancer as follows:
(i) This Agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee of each Mortgage Loan, the Depositor was the
sole beneficial owner of each Mortgage Loan (insofar as such title was
conveyed to it by the Sponsor) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title and interest in the Mortgage Loans to the Trustee; and
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee with any intent to hinder, delay or defraud any of its
creditors.
<PAGE>
ARTICLE III
Administration and Servicing
of Mortgage Loans
Section 3.01. The Master Servicer. (a) The Master Servicer shall
-------------------
service and administer the Mortgage Loans in a manner consistent with the terms
of this Agreement and with general industry practice and shall have full power
and authority, acting alone or through a subservicer, to do any and all things
in connection with such servicing and administration which it may deem
necessary or desirable, it being understood, however, that the Master Servicer
shall at all times remain responsible to the Trustee, the Certificateholders
and the Credit Enhancer for the performance of its duties and obligations
hereunder in accordance with the terms hereof. Any amounts received by any
subservicer in respect of a Mortgage Loan shall be deemed to have been received
by the Master Servicer whether or not actually received by it. Without limiting
the generality of the foregoing, the Master Servicer shall continue, and is
hereby authorized and empowered by the Trustee, to execute and deliver, on
behalf of itself, the Certificateholders and the Trustee, or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the Mortgaged Properties. The Trustee shall,
upon the written request of a Servicing Officer, furnish the Master Servicer
with any powers of attorney and other documents necessary or appropriate to
enable the Master Servicer to carry out its servicing and administrative duties
hereunder. The Master Servicer in such capacity may also consent to the placing
of a lien senior to that of any Mortgage on the related Mortgaged Property,
provided that (i) the new senior lien secures a mortgage loan that refinances
an existing first mortgage loan and (ii) the Loan-to-Value Ratio of the new
mortgage loan (without taking into account any closing costs that may be
financed by such new mortgage loan) is equal to or less than the Loan-to-Value
Ratio of the first mortgage loan to be replaced measured either (A) as of the
Cut-off Date or (B) as of the date of the refinancing referenced in clause (i);
provided, however, that the aggregate Asset Balance of such Mortgage Loans with
respect to which the senior lien may be modified in accordance with clause
(ii)(A) shall not exceed 10% of the related Cut-off Date Pool Balance and
clause (ii)(B) shall not exceed 40% of the related Cut-off Date Pool Balance;
and provided, further, that the aggregate Asset Balance of all such Mortgage
Loans with respect to which the senior lien may be so modified shall not exceed
50% of the related Cut-off Date Pool Balance (such 50% herein referred to as
the "Increased Senior Lien Limitation").
The Master Servicer may also, without prior approval from the Rating
Agencies or the Credit Enhancer, increase the Credit Limits on Mortgage Loans
provided that (i) new appraisals are obtained and the weighted average Combined
Loan-to-Value Ratios of the Mortgage Loans after giving effect to such increase
are less than or equal to the weighted average Combined Loan-to-Value Ratios of
the Mortgage Loans as of the Cut-off Date and (ii) such increases are
consistent with the Master Servicer's underwriting policies. In addition, the
Master Servicer may (i) increase the Credit Limits on Mortgage Loans having
aggregate Asset Balances of up to 2.5% of the Cut-off Date Loan Group Balance,
provided that (x) the increase in the Credit Limit of a Mortgage Loan does not
cause the Combined Loan-to-Value Ratio of such Mortgage Loan to exceed 90%, (y)
the increase in the Credit Limit of a Mortgage Loan does not cause the Combined
Loan-to-Value Ratio of such Mortgage Loan to increase by more than 25% (for
example, a Combined Loan-to-Value Ratio of 50% can be increased to 75%, a
Combined Loan-to-Value Ratio of 60% can be increased to 85%, and so forth) and
(z) the increase is consistent with the Master Servicer's underwriting policies
and (ii) increase the Credit Limits on the Mortgage Loans having aggregate
Asset Balances of up to an additional 2.5% of the Cut-off Date Pool Balance,
provided that (x) the increase in the Credit Limit of a Mortgage Loan does not
cause the Combined Loan-to-Value Ratio of such Mortgage Loan to exceed 100%,
(y) the increase in the Credit Limit of a Mortgage Loan does not cause the
Combined Loan-to-Value Ratio of such Mortgage Loan to increase by more than 25%
(for example, a Combined Loan-to-Value Ratio of 50% can be increased to 75%, a
Combined Loan-to-Value Ratio of 60% can be increased to 85%, and so forth) and
(z) the increase is consistent with the Master Servicer's underwriting
policies.
Furthermore, the Master Servicer may, without prior approval from the
Rating Agencies and the Credit Enhancer solicit Mortgagors for a reduction in
Loan Rates; provided that the Master Servicer can only reduce such Loan Rates
on up to 10% of the Mortgage Loans by Cut-off Date Pool Balance. Any such
solicitations shall not result in a reduction in the weighted average Gross
Margin of the Mortgage Loans by more than 25 basis points taking into account
any such prior reductions.
In addition, the Master Servicer may agree to changes in the terms of
a Mortgage Loan at the request of the Mortgagor provided that such changes (i)
do not materially and adversely affect the interests of related
Certificateholders or the Credit Enhancer and (ii) are consistent with prudent
and customary business practice as evidenced by a certificate signed by a
Servicing Officer delivered to the Trustee and the Credit Enhancer.
In addition to the foregoing, the Master Servicer may solicit
Mortgagors to change any other terms of the related Mortgage Loans, provided
that such changes (i) do not materially and adversely affect the interests of
the related Certificateholders or the Credit Enhancer and (ii) are consistent
with prudent and customary business practice as evidenced by a certificate
signed by a Servicing Officer delivered to the Trustee and the Credit Enhancer.
Nothing herein shall limit the right of the Master Servicer to solicit
Mortgagors with respect to new loans (including mortgage loans) that are not
Mortgage Loans.
The relationship of the Master Servicer (and of any successor to the
Master Servicer as Master Servicer under this Agreement) to the Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) In the event that the rights, duties and obligations of the Master
Servicer are terminated hereunder, any successor to the Master Servicer in its
sole discretion may, to the extent permitted by applicable law, terminate the
existing subservicer arrangements with any subservicer or assume the terminated
Master Servicer's rights under such subservicing arrangements which termination
or assumption will not violate the terms of such arrangements.
Section 3.02. Collection of Certain Mortgage Loan Payments. (a) The
--------------------------------------------
Master Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans, and shall, to the
extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to mortgage loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or any
assumption fees or other fees which may be collected in the ordinary course of
servicing such Mortgage Loan and (ii) arrange with a Mortgagor a schedule for
the payment of interest due and unpaid; provided that such arrangement is
consistent with the Master Servicer's policies with respect to the mortgage
loans it owns or services; provided, further, that notwithstanding such
arrangement such Mortgage Loans will be included in the information regarding
delinquent Mortgage Loans set forth in the Servicing Certificate and monthly
statement to Certificateholders pursuant to Section 5.03.
(b) The Master Servicer shall establish and maintain a trust account
(the "Collection Account") titled "Bank One, National Association, as Trustee,
in trust for the registered holders of Revolving Home Equity Loan Asset Backed
Certificates, Series 1999-D and Ambac Assurance Corporation." The Collection
Account shall be an Eligible Account. The Master Servicer shall (i) on the
Business Day immediately preceding each of the first three Distribution Dates,
deposit in the Collection Account any shortfall in the amount required to pay
the Investor Certificate Interest on such Distribution Dates resulting solely
from the failure of certain Mortgage Loans to be fully indexed and (ii) on the
Business Day immediately preceding the first Distribution Date, deposit in the
Collection Account any amounts representing payments on, and any collections in
respect of, the Mortgage Loans received after the Cut-off Date and prior to the
Closing Date (exclusive of payments in respect of accrued interest due on or
prior to the Cut-off Date), and thereafter the Master Servicer, or the Sponsor,
as the case may be, shall deposit within two Business Days following receipt
thereof the following payments and collections received or made by it (without
duplication):
(i) all collections on and in respect of the Mortgage Loans;
(ii) the amounts, if any, deposited to the Collection Account
pursuant to Section 4.05;
(iii) Net Liquidation Proceeds net of any related Foreclosure
Profit;
(iv) Insurance Proceeds (including, for this purpose, any amount
required to be credited by the Master Servicer pursuant to the last
sentence of Section 3.04 and excluding the portion thereof, if any,
that has been applied to the restoration or repair of the related
Mortgaged Property or released to the related Mortgagor in accordance
with the normal servicing procedures of the Master Servicer); and
(v) any amounts required to be deposited therein pursuant to
Section 10.01;
provided, however, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Mortgage Loans, the Servicing Fee for such Collection Period and the amount
of any unreimbursed optional advance made by the Master Servicer pursuant to
Section 4.05; and provided, further, that, notwithstanding the foregoing, so
long as Countrywide is the Master Servicer and (x) the Master Servicer's
long-term senior unsecured debt obligations are rated at least "Baa2" by
Moody's and "BBB" by Standard & Poor's and (y) the Credit Enhancer's
claims-paying ability is rated "Aaa" by Moody's and "AAA" by Standard & Poor's,
the Master Servicer need not make daily deposits in the Collection Account for
any Collection Period, but instead may make a single deposit in the Collection
Account of amounts to be remitted by it for such Collection Period in
immediately available funds on the Business Day prior to the related
Distribution Date. The foregoing requirements respecting deposits to the
Collection Account are exclusive, it being understood that, without limiting
the generality of the foregoing, the Master Servicer need not deposit in the
Collection Account amounts representing Foreclosure Profits, fees (including
annual fees) or late charge penalties payable by Mortgagors, or amounts
received by the Master Servicer for the accounts of Mortgagors for application
towards the payment of taxes, insurance premiums, assessments, excess pay off
amounts and similar items. The Master Servicer shall remit all Foreclosure
Profits to the Sponsor.
The Trustee shall hold amounts deposited in the Collection Account as
trustee for the Certificateholders and for the Credit Enhancer. In addition,
the Master Servicer shall notify the Trustee and the Credit Enhancer in writing
on each Determination Date of the amount of payments and collections in the
Collection Account allocable to Interest Collections and Principal Collections
for the Mortgage Loans in each Loan Group for the related Distribution Date.
Following such notification, the Master Servicer shall be entitled to withdraw
from the Collection Account and retain any amounts that constitute income and
gain realized from the investment of such payments and collections.
Amounts on deposit in the Collection Account will, at the direction of
the Master Servicer, be invested in Eligible Investments maturing no later than
the day before the next Distribution Date. All income and gain realized from
any investment in Eligible Investments of funds in the Collection Account shall
be for the benefit of the Master Servicer and shall be subject to its
withdrawal from time to time. The amount of any losses incurred in respect of
the principal amount of any such investments shall be deposited in the
Collection Account by the Master Servicer out of its own funds immediately as
realized.
(c) The Master Servicer shall establish and maintain a trust account
(the "Reserve Fund") titled "Bank One, National Association, as Trustee, in
trust for the registered holders of Revolving Home Equity Loan Asset Backed
Certificates, Series 1999-D and Ambac Assurance Corporation." The Reserve Fund
shall be an Eligible Account. The Reserve Fund shall be maintained in
accordance with Section 5.01(e) hereof.
Section 3.03. Withdrawals from the Collection Account. From time to
---------------------------------------
time, withdrawals may be made from the Collection Account by the Master
Servicer for the following purposes:
(i) To the Master Servicer as payment for its Servicing Fee
pursuant to Section 3.08;
(ii) To pay to the Master Servicer amounts on deposit in the
Collection Account that are not to be included in the distributions
and payments pursuant to Section 5.01 to the extent provided by the
second to the last and the last paragraph of Section 3.02(b); and
(iii) To make or to permit the Paying Agent to make
distributions and payments pursuant to Section 5.01;
provided, however, that, if the Master Servicer makes monthly deposits in the
Collection Account pursuant to the second proviso of Section 3.02(b), in lieu
of making the foregoing withdrawals (except in the case of clause (iii)), the
Master Servicer may make a net deposit in the Collection Account pursuant to
Section 3.02(b).
If the Master Servicer deposits in the Collection Account any amount
not required to be deposited therein or any amount in respect of payments by
Mortgagors made by checks subsequently returned for insufficient funds or other
reason for non-payment it may at any time withdraw such amount from the
Collection Account, and any such amounts shall not be included in the amounts
to be deposited in the Collection Account pursuant to Section 3.02(b), any
provision herein to the contrary notwithstanding.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
----------------------------------------------------
Expenses. The Master Servicer shall cause to be maintained for each Mortgage
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Loan hazard insurance naming the Master Servicer or the related subservicer as
loss payee thereunder providing extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan from time to time or (ii) the combined
principal balance owing on such Mortgage Loan and any mortgage loan senior to
such Mortgage Loan from time to time. The Master Servicer shall also maintain
on property acquired upon foreclosure, or by deed in lieu of foreclosure,
hazard insurance with extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value from time to time of the
improvements which are a part of such property or (ii) the combined principal
balance owing on such Mortgage Loan and any mortgage loan senior to such
Mortgage Loan at the time of such foreclosure or deed in lieu of foreclosure
plus accrued interest and the good-faith estimate of the Master Servicer of
related Liquidation Expenses to be incurred in connection therewith. Amounts
collected by the Master Servicer under any such policies shall be deposited in
the Collection Account to the extent called for by Section 3.02. In cases in
which any Mortgaged Property is located in a federally designated flood area,
the hazard insurance to be maintained for the related Mortgage Loan shall
include flood insurance. All such flood insurance shall be in such amounts as
are required under applicable guidelines of the Federal Flood Emergency Act.
The Master Servicer shall be under no obligation to require that any Mortgagor
maintain earthquake or other additional insurance and shall be under no
obligation itself to maintain any such additional insurance on property
acquired in respect of a Mortgage Loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance. If the Master Servicer shall obtain and maintain a
blanket policy consistent with prudent industry standards insuring against
hazard losses on all of the Mortgage Loans in an aggregate amount prudent under
industry standards, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.04, it being
understood and agreed that such policy may contain a deductible clause on terms
substantially equivalent to those commercially available and maintained by
comparable servicers. If such policy contains a deductible clause, the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property a policy complying with the first sentence of this
Section, and there shall have been a loss which would have been covered by such
policy, deposit in the Collection Account the amount not otherwise payable
under the blanket policy because of such deductible clause.
Section 3.05. Assumption and Modification Agreements. In any case in
--------------------------------------
which a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall exercise its right to accelerate the
maturity of such Mortgage Loan consistent with the then current practice of the
Master Servicer and without regard to the inclusion of such Mortgage Loan in
the Trust. If it elects not to enforce its right to accelerate or if it is
prevented from doing so by applicable law, the Master Servicer (so long as such
action conforms with the underwriting standards generally acceptable in the
industry at the time for new origination) is authorized to take or enter into
an assumption and modification agreement from or with the Person to whom such
Mortgaged Property has been or is about to be conveyed, pursuant to which such
Person becomes liable under the Credit Line Agreement and, to the extent
permitted by applicable law, the Mortgagor remains liable thereon. The Master
Servicer shall notify the Trustee that any assumption and modification
agreement has been completed by delivering to the Trustee an Officer's
Certificate certifying that such agreement is in compliance with this Section
3.05 and by forwarding the original copy of such assumption and modification
agreement to the Trustee. Any such assumption and modification agreement shall,
for all purposes, be considered a part of the related Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. No
change in the terms of the related Credit Line Agreement may be made by the
Master Servicer in connection with any such assumption to the extent that such
change would not be permitted to be made in respect of the original Credit Line
Agreement pursuant to the fourth paragraph of Section 3.01(a). Any fee
collected by the Master Servicer for entering into any such agreement will be
retained by the Master Servicer as additional servicing compensation.
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
--------------------------------------------------------
Certain Mortgage Loans. The Master Servicer shall foreclose upon or otherwise
- ----------------------
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default when, in the opinion of the
Master Servicer based upon the practices and procedures referred to in the
following sentence, no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 3.02; provided that if the Master
Servicer has actual knowledge or reasonably believes that any Mortgaged
Property is affected by hazardous or toxic wastes or substances and that the
acquisition of such Mortgaged Property would not be commercially reasonable,
then the Master Servicer will not cause the Trust to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. In connection with
such foreclosure or other conversion, the Master Servicer shall follow such
practices (including, in the case of any default on a related senior mortgage
loan, the advancing of funds to correct such default) and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities. The foregoing is subject to the proviso
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the correction of any default on a
related senior mortgage loan or restoration of any property unless it shall
determine that such expenditure will increase Net Liquidation Proceeds.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders.
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust any Mortgage Loan which is 91 days
or more delinquent at a price equal to the purchase price described below. The
price for any Mortgage Loan purchased hereunder (which shall be an amount equal
to 100% of the Asset Balance of such Mortgage Loan plus accrued interest
thereon at the applicable Loan Rate from the date through which interest was
last paid by the related Mortgagor to the first day of the month in which such
amount is to be distributed to the related Certificateholders) shall be
deposited in the Collection Account and the Trustee, upon receipt of a
certificate from the Master Servicer in the form of Exhibit G hereto, shall
release or cause to be released to the Master Servicer the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment
prepared by the Master Servicer, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the Master Servicer shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan and all
security and documents related thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation
to the Trustee, the Credit Enhancer or the Certificateholders with respect
thereto.
Section 3.07. Trustee to Cooperate. On or before each Distribution
--------------------
Date, the Master Servicer will notify the Trustee of the payment in full of the
Asset Balance of any Mortgage Loan during the preceding Collection Period,
which notification shall be by a certification (which certification shall
include a statement to the effect that all amounts received in connection with
such payment which are required to be deposited in the Collection Account
pursuant to Section 3.02 have been so deposited or credited) of a Servicing
Officer. Upon any such payment in full, the Master Servicer is authorized to
execute, pursuant to the authorization contained in Section 3.01, if the
assignments of Mortgage have been recorded as required hereunder, an instrument
of satisfaction regarding the related Mortgage, which instrument of
satisfaction shall be recorded by the Master Servicer if required by applicable
law and be delivered to the Person entitled thereto. It is understood and
agreed that no expenses incurred in connection with such instrument of
satisfaction or transfer shall be reimbursed from amounts deposited in the
Collection Account. From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, or in connection with the payment in full of
the Asset Balance of any Mortgage Loan, the Trustee shall, upon request of the
Master Servicer and delivery to the Trustee of a Request for Release
substantially in the form attached hereto as Exhibit G signed by a Servicing
Officer, release the related Mortgage File to the Master Servicer and the
Trustee shall execute such documents, in the forms provided by the Master
Servicer, as shall be necessary to the prosecution of any such proceedings or
the taking of other servicing actions. Such trust receipt shall obligate the
Master Servicer to return the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a
Servicing Officer similar to that hereinabove specified, the trust receipt
shall be released by the Trustee to the Master Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the assignments of
Mortgage in accordance with the provisions hereof, the Trustee shall, if so
requested in writing by the Master Servicer, execute an appropriate assignment
in the form provided to the Trustee by the Master Servicer to assign such
Mortgage Loan for the purpose of collection to the Master Servicer or to the
related subservicer (any such assignment shall unambiguously indicate that the
assignment is for the purpose of collection only), and, upon such assignment,
the Master Servicer will thereupon bring all required actions in its own name
and otherwise enforce the terms of the Mortgage Loan and deposit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments
due under any such Mortgage Loan are paid by the Mortgagor and any other
defaults are cured, then the Master Servicer shall promptly reassign such
Mortgage Loan to the Trustee and return the related Mortgage File to the place
where it was being maintained.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
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Master Servicer. The Master Servicer shall be entitled to receive the Servicing
- ---------------
Fee pursuant to Section 3.03 as compensation for its services in connection
with servicing the Mortgage Loans. Moreover, additional servicing compensation
in the form of late payment charges or other receipts not required to be
deposited in the Collection Account (other than Foreclosure Profits) shall be
retained by the Master Servicer. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder
(including payment of all other fees and expenses not expressly stated
hereunder to be for the account of the Certificateholders) and shall not be
entitled to reimbursement therefor except as specifically provided herein.
Liquidation Expenses are reimbursable to the Master Servicer first, from
related Liquidation Proceeds and second, from the Collection Account pursuant
to Section 5.01(a)(xi) or 5.01(a)(xii), as applicable.
Section 3.09. Annual Statement as to Compliance. (a) The Master
---------------------------------
Servicer will deliver to the Trustee, the Credit Enhancer and the Rating
Agencies, on or before May 31st of each year, beginning May 31, 2000, an
Officer's Certificate stating that (i) a review of the activities of the Master
Servicer during the preceding fiscal year (or such shorter period as is
applicable in the case of the first report) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best
of such officer's knowledge, based on such review, the Master Servicer has
fulfilled all of its material obligations under this Agreement throughout such
fiscal year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Master Servicer shall deliver to the Trustee, the Credit
Enhancer and each of the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five Business Days thereafter,
written notice by means of an Officer's Certificate of any event which with the
giving of notice or the lapse of time or both, would become an Event of
Servicing Termination.
Section 3.10. Annual Servicing Report. On or before May 31st of each
-----------------------
year, beginning May 31, 2000, the Master Servicer, at its expense, shall cause
a firm of nationally recognized independent public accountants (who may also
render other services to the Master Servicer) to furnish a report to the
Trustee, the Credit Enhancer and each Rating Agency to the effect that such
firm has examined certain documents and records relating to the servicing of
mortgage loans during the most recent fiscal year then ended under pooling and
servicing agreements (substantially similar to this Agreement, including this
Agreement) that such examination, was conducted substantially in compliance
with the audit guide for audits of non-supervised mortgagees approved by the
Department of Housing and Urban Development for use by independent public
accountants (to the extent that the procedures in such audit guide are
applicable to the servicing obligations set forth in such agreements) and that
such examination has disclosed no items of noncompliance with the provisions of
this Agreement which, in the opinion of such firm, are material, except for
such items of noncompliance as shall be set forth in such report.
Section 3.11. Access to Certain Documentation and Information
-----------------------------------------------
Regarding the Mortgage Loans. (a) The Master Servicer shall provide to the
- ----------------------------
Trustee, the Credit Enhancer, any Investor Certificateholders that are
federally insured savings and loan associations, the Office of Thrift
Supervision, successor to the Federal Home Loan Bank Board, the FDIC and the
supervisory agents and examiners of the Office of Thrift Supervision access to
the documentation regarding the Mortgage Loans required by applicable
regulations of the Office of Thrift Supervision and the FDIC (acting as
operator of the SAIF or the BIF), such access being afforded without charge but
only upon reasonable request and during normal business hours at the offices of
the Master Servicer. Nothing in this Section 3.11 shall derogate from the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Master Servicer to provide access as provided in this Section 3.11 as a result
of such obligation shall not constitute a breach of this Section 3.11.
(b) The Master Servicer shall supply information in such form as the
Trustee shall reasonably request to the Trustee and the Paying Agent, on or
before the start of the Determination Date preceding the related Distribution
Date, as is required in the Trustee's reasonable judgment to enable the Paying
Agent or the Trustee, as the case may be, to make required distributions and to
furnish the required reports to Certificateholders and to make any claim under
the Policy.
Section 3.12. Maintenance of Certain Servicing Insurance Policies. The
---------------------------------------------------
Master Servicer shall during the term of its service as master servicer
maintain in force (i) a policy or policies of insurance covering errors and
omissions in the performance of its obligations as master servicer hereunder
and (ii) a fidelity bond in respect of its officers, employees or agents. Each
such policy or policies and bond together shall comply with the requirements
from time to time of the Federal National Mortgage Association for persons
performing servicing for mortgage loans purchased by such Association.
Section 3.13. Reports to the Securities and Exchange Commission. The
-------------------------------------------------
Trustee shall, on behalf of the Trust, cause to be filed with the Securities
and Exchange Commission any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission thereunder. Upon the
request of the Trustee, each of the Sponsor, the Master Servicer, the Depositor
and the Transferor shall cooperate with the Trustee in the preparation of any
such report and shall provide to the Trustee in a timely manner all such
information or documentation as the Trustee may reasonably request in
connection with the performance of its duties and obligations under this
Section.
Section 3.14. Tax Returns. In accordance with Section 2.08 hereof, the
-----------
Trustee shall prepare and file any federal, state or local income and franchise
tax return for the Trust as well as any other applicable return and apply for a
taxpayer identification number on behalf of the Trust. The Transferor shall
treat the Mortgage Loans as its property for all federal, state or local tax
purposes and shall report all income earned thereon (including amounts payable
as fees to the Master Servicer) as its income for income tax purposes. In the
event the Trust shall be required pursuant to an audit or administrative
proceeding or change in applicable regulations to file federal, state or local
tax returns, the Trustee shall prepare and file or shall cause to be prepared
and filed any tax returns required to be filed by the Trust; the Trustee shall
promptly sign such returns and deliver such returns after signature to the
Master Servicer and such returns shall be filed by the Master Servicer. The
Trustee shall also prepare or shall cause to be prepared all tax information
required by law to be distributed to Investor Certificateholders. In no event
shall the Trustee or the Master Servicer be liable for any liabilities, costs
or expenses of the Trust, the Investor Certificateholders, the Transferor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation federal, state or local income and franchise or
excise taxes or any other tax imposed on or measured by income (or any interest
or penalty with respect thereto or arising from a failure to comply therewith).
Section 3.15. Information Required by the Internal Revenue Service
----------------------------------------------------
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
- ----------------------------------------------------------------------------
The Master Servicer shall prepare and deliver all federal and state information
reports when and as required by all applicable state and federal income tax
laws. In particular, with respect to the requirement under Section 6050J of the
Code to the effect that the Master Servicer shall make reports of foreclosures
and abandonments of any mortgaged property for each year beginning in 1999, the
Master Servicer shall file reports relating to each instance occurring during
the previous calendar year in which the Master Servicer (i) on behalf of the
Trustee acquires an interest in any Mortgaged Property through foreclosure or
other comparable conversion in full or partial satisfaction of a Mortgage Loan,
or (ii) knows or has reason to know that any Mortgaged Property has been
abandoned. The reports from the Master Servicer shall be in form and substance
sufficient to meet the reporting requirements imposed by Section 6050J.
<PAGE>
ARTICLE IV
Servicing Certificate
Section 4.01. Servicing Certificate. Not later than each Determination
---------------------
Date, the Master Servicer shall deliver (a) to the Trustee, the Statement to
Certificateholders required to be prepared pursuant to Section 5.03 and (b) to
the Trustee, the Sponsor, the Depositor, the Paying Agent, the Credit Enhancer
and each Rating Agency a Servicing Certificate (in written form or the form of
computer readable media or such other form as may be agreed to by the Trustee
and the Master Servicer), together with an Officer's Certificate to the effect
that such Servicing Certificate is true and correct in all material respects,
stating the related Collection Period, Distribution Date, the series number of
the Certificates, the date of this Agreement, and, on the basis of each Class
of Investor Certificates:
(i) the aggregate amount of collections received on the Mortgage
Loans in the related Loan Group on or prior to the Determination Date
in respect of such Collection Period;
(ii) the aggregate amount of (a) Interest Collections and (b)
Principal Collections for the related Loan Group for such Collection
Period;
(iii) the Investor Floating Allocation Percentage and the
Investor Fixed Allocation Percentage for the related Loan Group for
such Collection Period;
(iv) the Investor Interest Collections and Investor Principal
Collections for the related Loan Group for such Collection Period;
(v) the Transferor Interest Collections and Transferor Principal
Collections for the related Loan Group for such Collection Period;
(vi) Investor Certificate Interest and the applicable Investor
Certificate Rate for the related Class of Investor Certificates for
the related Interest Period;
(vii) the amount, if any, of such Investor Certificate Interest
that is not payable to such Class of Investor Certificates on account
of insufficient Investor Interest Collections;
(viii) the portion of the Unpaid Investor Certificate Interest
Shortfall allocated to such Class of Investor Certificates, if any,
and the amount of interest on such shortfall at the applicable
Investor Certificate Rate applicable from time to time (separately
stated) to be distributed on such Distribution Date;
(ix) the Unpaid Investor Certificate Interest Shortfall, if any,
to remain with respect to such Class of Investor Certificates after
the distribution on such Distribution Date;
(x) the amount, if any, of any Basis Risk Carryforward with
respect to such Class of Investor Certificates in such distribution;
(xi) the amount, if any, of the remaining Basis Risk
Carryforward with respect to such Class of Investor Certificates after
giving effect to such distribution;
(xii) the Accelerated Principal Distribution Amount with respect
to such Class of Investor Certificates and the portion thereof that
will be distributed pursuant to Section 5.01(a)(vii);
(xiii) the Scheduled Principal Collections Distribution Amount
with respect to such Class of Investor Certificates, separately
stating the components thereof;
(xiv) the amount of any Transfer Deposit Amount paid by the
Sponsor or the Depositor with respect to such Class of Investor
Certificates pursuant to Section 2.02 or 2.04;
(xv) any accrued and unpaid Servicing Fees with respect to the
Mortgage Loans in the related Loan Group for previous Collection
Periods and the Servicing Fee for such Collection Period;
(xvi) the Investor Loss Amount with respect to such Class of
Investor Certificates for such Collection Period;
(xvii) the aggregate amount, if any, of Investor Loss Reduction
Amounts with respect to such Class of Investor Certificates for
previous Distribution Dates that have not been previously reimbursed
to the Holders of such Class of Investor Certificates pursuant to
Section 5.01(a)(v);
(xviii) the aggregate Asset Balance of the Mortgage Loans in the
related Loan Group as of the end of the preceding Collection Period
and as of the end of the second preceding Collection Period;
(xix) the Invested Amount with respect to such Class of Investor
Certificates as of the end of the preceding Collection Period;
(xx) the Investor Certificate Principal Balance for such Class
of Investor Certificates and Loan Group Factor after giving effect to
the distribution on such Distribution Date and to any reduction on
account of the related Investor Loss Amount, if any;
(xxi) the related Transferor Principal Balance and the related
Available Transferor Subordinated Amount after giving effect to the
distribution on such Distribution Date;
(xxii) the aggregate amount of Additional Balances created with
respect to the Mortgage Loans in the related Loan Group during the
previous Collection Period;
(xxiii) the number and aggregate Asset Balances of Mortgage
Loans in the related Loan Group (x) as to which the Minimum Monthly
Payment is delinquent for 30-59 days, 60-89 days and 90 or more days,
respectively and (y) that have become REO, in each case as of the end
of the preceding Collection Period;
(xxiv) whether a Rapid Amortization Event has occurred since the
prior Determination Date, specifying each such Rapid Amortization
Event if one has occurred;
(xxv) whether an Event of Servicing Termination has occurred
since the prior Determination Date, specifying each such Event of
Servicing Termination if one has occurred;
(xxvi) the amount to be distributed to the Credit Enhancer with
respect to such Class of Investor Certificates pursuant to Section
5.01(a)(vi) and Section 5.01(a)(viii), stated separately;
(xxvii) the Guaranteed Principal Distribution Amount for such
Class of Investor Certificates and Distribution Date;
(xxviii) the Credit Enhancement Draw Amount for such Class of
Investor Certificates, if any, for such Distribution Date;
(xxix) the amount to be distributed to the Transferor pursuant
to Section 5.01(a)(xxv);
(xxx) the amount to be paid to the Master Servicer pursuant to
Section 5.01(a)(xi);
(xxxi) the Maximum Rate for the related Collection Period and
the Weighted Average Net Loan Rate, each for the Mortgage Loans in the
related Loan Group;
(xxxii) the expected amount of any optional advances pursuant to
Section 4.05 hereof by the Master Servicer included in the
distribution on such Distribution Date and the aggregate expected
amount of optional advances pursuant to Section 4.05 hereof by the
Master Servicer outstanding as of the close of business on such
Distribution Date;
(xxxiii) the related Overcollateralization Amount after giving
effect to the distribution to be made on such Distribution Date;
(xxxiv) the number and principal balances of any Mortgage Loans
in the related Loan Group transferred to the Transferor pursuant to
Section 2.06;
(xxxv) the aggregate of all Liquidation Loss Amounts on the
Mortgage Loans in the related Loan Group since the Cut-off Date and
whether a Cumulative Loss Test Violation has occurred since the prior
Determination Date;
(xxxvi) the Rolling Six Month Delinquency Rate for such Loan
Group and Distribution Date; and
(xxxvii) the amount to be transferred to the Reserve Fund
pursuant to Section 5.01(e)(i) or transferred from the Reserve Fund
pursuant to Section 5.01(e)(i)(a), Section 5.01(e)(i)(a)(b) or Section
5.01(e)(ii).
The Trustee shall conclusively rely upon the information contained in
a Servicing Certificate for purposes of making distributions pursuant to
Section 5.01, shall have no duty to inquire into such information and shall
have no liability in so relying. The format and content of the Servicing
Certificate may be modified by the mutual agreement of the Master Servicer, the
Trustee and the Credit Enhancer. The Master Servicer shall give notice of any
such change to the Rating Agencies.
Section 4.02. Claims upon the Policy; Policy Payments Account.
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(a) If, by the close of business on the third Business Day prior to a
Distribution Date, the sum of the funds then on deposit in the Collection
Account for the related Collection Period which are payable to each Class of
Investor Certificates pursuant to Sections 5.01(a) (excluding the amount, if
any, payable pursuant to clauses (vii) and (xiii) thereof) and (b) (after
giving effect to the distribution of the related Trustee Fee and the related
Premium) and the amount, if any, deposited into the Collection Account pursuant
to Section 4.05 are insufficient to pay the Guaranteed Distribution for each
Class of Investor Certificates on such Distribution Date (after application of
Subordinated Transferor Collections, Crossover Amounts and amounts on deposit
in the Reserve Fund), then the Trustee shall give notice to the Credit Enhancer
by telephone or telecopy of the amount equal to the Credit Enhancement Draw
Amount for such Class of Investor Certificates. Such notice of such sum shall
be confirmed in writing in the form of Notice of Nonpayment and Demand for
Payment of Insured Amounts set forth as Exhibit A to the Policy, to the Credit
Enhancer at or before 10:00 a.m., New York City time, on the second Business
Day prior to such Distribution Date. Following receipt by the Credit Enhancer
of such notice in such form, the Credit Enhancer will pay any amount payable
under the Policy with respect to such Class of Investor Certificates as set
forth in such form on the later to occur of (i) 12:00 noon, New York City time,
on the second Business Day following such receipt and (ii) 12:00 noon, New York
City time, on the Distribution Date to which such deficiency relates.
(b) The Trustee shall establish a separate special purpose trust
account, which account shall be an Eligible Account, for the benefit of Holders
of the Investor Certificates and the Credit Enhancer referred to herein as the
"Policy Payments Account" over which the Trustee shall have exclusive control
and sole right of withdrawal. The Trustee shall deposit any amount paid under
the Policy in the Policy Payments Account and distribute such amount only for
purposes of payment to Holders of the Investor Certificates of the Guaranteed
Distribution with respect to the related Class of Investor Certificates for
which a claim was made and such amount may not be applied to satisfy any costs,
expenses or liabilities of the Master Servicer, the Trustee or the Trust.
Amounts paid under the Policy shall be transferred to the Collection Account in
accordance with the next succeeding paragraph and disbursed by the Trustee to
Holders of the related Class of Investor Certificates in accordance with
Section 5.01. It shall not be necessary for such payments to be made by checks
or wire transfers separate from the checks or wire transfers used to pay the
Guaranteed Distribution to such Class with other funds available to make such
payment. However, the amount of any payment of principal of or interest on the
related Class of Investor Certificates to be paid from funds transferred from
the Policy Payments Account shall be noted as provided in paragraph (c) below
in the Certificate Register and in the statement to be furnished to Holders of
the Investor Certificates pursuant to Section 5.03. Funds held in the Policy
Payments Account shall not be invested.
On any Distribution Date with respect to which a claim has been made
under the Policy, the amount of any funds received by the Trustee as a result
of any claim under the Policy, to the extent required to make the Guaranteed
Distribution on the related Class of Investor Certificates on such Distribution
Date, shall be withdrawn from the Policy Payments Account and deposited in the
Collection Account and applied by the Trustee, together with the other funds to
be withdrawn from the Collection Account or the Reserve Fund pursuant to
Section 5.01 directly to the payment in full of the Guaranteed Distribution due
on such Class of Investor Certificates. Any funds received by the Trustee shall
be used solely for payment to the Holders of Investor Certificates and may not
be applied to satisfy any costs, expenses or liabilities of the Master
Servicer, the Trustee or the Trust. Any funds remaining in the Policy Payments
Account on the first Business Day following a Distribution Date shall be
remitted to the Credit Enhancer, pursuant to the instructions of the Credit
Enhancer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Investor Certificate
from moneys received under the Policy. The Credit Enhancer shall have the right
to inspect such records at reasonable times during normal business hours upon
one Business Day's prior notice to the Trustee.
(d) The Trustee shall promptly notify the Credit Enhancer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law
(a "Preference Claim") of any distribution made with respect to the Investor
Certificates (other than Basis Risk Carryforward). Each Investor
Certificateholder, by its purchase of Investor Certificates, the Master
Servicer and the Trustee hereby agree that, the Credit Enhancer (so long as no
Credit Enhancer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedeas or performance bond pending any such appeal. In
addition and without limitation of the foregoing, the Credit Enhancer shall be
subrogated to the rights of the Master Servicer, the Trustee and each Investor
Certificateholder in the conduct of any such Preference Claim, including,
without limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such Preference
Claim.
Section 4.03. Replacement Policy. In the event of a Credit Enhancer
------------------
Default or if the claims paying ability rating of the Credit Enhancer is
downgraded and such downgrade results in a downgrading of the then current
rating of the Investor Certificates (in each case, a "Replacement Event"), the
Depositor may, in accordance with and upon satisfaction of the conditions set
forth in the Policy, including, without limitation, payment in full of all
amounts owed to the Credit Enhancer, but shall not be required to, substitute a
new surety bond or surety bonds for the existing Policy, provided, however,
that in each case the Investor Certificates shall be rated no lower than the
rating assigned by each Rating Agency to the Investor Certificates immediately
prior to such Replacement Event and that such new surety bond will qualify as a
"similar commercially available credit enhancement contract" within the meaning
of Treas. Reg. Section 1.1001-3(e)(4)(iv)(B). It shall be a condition to
substitution of any new credit enhancement that there be delivered to the
Trustee a legal opinion, acceptable in form and substance to the Trustee, from
counsel to the provider of such new credit enhancement with respect to the
enforceability thereof and such other matters as the Trustee may require. Upon
receipt of the items referred to above and the taking of physical possession of
the new credit enhancement, the Trustee shall, within five Business Days
following receipt of such items and such taking of physical possession, deliver
the replaced Policy to the Credit Enhancer. Any other form of credit
enhancement may also be substituted for the Policy upon the occurrence of a
Replacement Event, provided, however, that the Trustee receives an Opinion of
Counsel to the effect that such substitution will not be treated as a
significant modification within the meaning of Treas. Reg. Section 1.1001-3.
Section 4.04. Effect of Payments by the Credit Enhancer; Subrogation.
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Anything herein to the contrary notwithstanding, any payment with respect to
principal of or interest on a Class of Investor Certificates which is made with
moneys received pursuant to the terms of the Policy shall not be considered
payment of such Class of Investor Certificates from the Trust and shall not
result in the payment of or the provision for the payment of the principal of
or interest on such Class of Investor Certificates within the meaning of
Section 5.01. The Depositor, the Master Servicer and the Trustee acknowledge,
and each Holder by its acceptance of an Investor Certificate agrees, that
without the need for any further action on the part of the Credit Enhancer, the
Depositor, the Master Servicer, the Trustee or the Certificate Registrar (a) to
the extent the Credit Enhancer makes payments, directly or indirectly, on
account of principal of or interest on any Investor Certificates to the Holders
of such Investor Certificates, the Credit Enhancer will be fully subrogated to
the rights of such Holders to receive such principal and interest from the
Trust and (b) the Credit Enhancer shall be paid such principal and interest but
only from the sources and in the manner provided herein for the payment of such
principal and interest.
The Trustee and the Master Servicer shall cooperate in all respects
with any reasonable request by the Credit Enhancer for action to preserve or
enforce the Credit Enhancer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.
Section 4.05. Optional Advances of the Master Servicer. The Master
----------------------------------------
Servicer, in its sole discretion, may advance the interest component of any
delinquent Minimum Monthly Payment (or any portion thereof) by depositing such
amount into the Collection Account on or prior to the related Determination
Date.
<PAGE>
ARTICLE V
Payments and Statements to
Certificateholders; Rights of Certificateholders
Section 5.01. Distributions.
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(a) Distributions of Investor Interest Collections and Investment
Proceeds. On each Distribution Date, the Trustee or the Paying Agent, as the
case may be, shall distribute out of the Collection Account to the extent of
Investor Interest Collections collected during the related Collection Period
and the amount, if any, deposited into the Collection Account pursuant to
Section 4.05, the following amounts and in the following order of priority to
the following Persons (based on the information set forth in the Servicing
Certificate), with respect to each Loan Group:
(i) the related Trustee Fee for such Distribution Date to the
Trustee;
(ii) the related Premium pursuant to the Insurance Agreement to
the Credit Enhancer;
(iii) the Investor Certificate Interest for the related Class of
Investor Certificates for such Distribution Date to the related
Investor Certificateholders and the related Unpaid Investor
Certificate Interest Shortfall (other than any related Basis Risk
Carryforward), if any, for such Distribution Date to the related
Investor Certificateholders plus, to the extent legally permissible,
interest thereon at the related Investor Certificate Rate;
(iv) the Investor Loss Amount for such Class of Investor
Certificates for such Distribution Date to the related Investor
Certificateholders as principal in reduction of the related Investor
Certificate Principal Balance;
(v) to the related Class of Investor Certificateholders as
principal in reduction of the related Investor Certificate Principal
Balance the aggregate amount of the related Investor Loss Reduction
Amounts, if any, for previous Distribution Dates that have not been
previously reimbursed to the related Investor Certificateholders
pursuant to this clause (v);
(vi) to reimburse the Credit Enhancer for previously
unreimbursed Credit Enhancement Draw Amounts together with interest
thereon at the applicable rate set forth in the Insurance Agreement;
(vii) the related Accelerated Principal Distribution Amount, if
any, to the related Class of Investor Certificateholders;
(viii) to the Credit Enhancer for any amounts owed to the Credit
Enhancer pursuant to the Insurance Agreement;
(ix) to fund any amounts required to be distributed to the other
Class on such Distribution Date, pursuant to clauses (iii)-(v) and
(vii) and remaining unpaid after distributions of the Investor
Interest Collections for the Loan Group related to such other Class.
(x) to the Reserve Fund, the Reserve Fund Deposit, if any, for
such Distribution Date;
(xi) any amounts required to be paid to the Master Servicer with
respect to such Class of Investor Certificates pursuant to Sections
3.08 and 7.03 which have not been previously paid to the Master
Servicer;
(xii) any amounts required to be paid to the Master Servicer
with respect to the other Class pursuant to Sections 3.08 and 7.03
which have not previously been paid to the Master Servicer and which
remain unpaid after distributions of the Investor Interest Collections
for the Loan Group related to such other Class;
(xiii) to the related Class of Investor Certificates any Basis
Risk Carryforward;
(xiv) to the other Class, any Basis Risk Carryforward remaining
unpaid after distributions of the Investor Interest Collections for
the Loan Group related to such other Class; and
(xv) any remaining amount to the Transferor.
(b) Distribution of Principal Collections. Except on the Distribution
Date in February 2026, on each Distribution Date, the Trustee shall distribute
out of the Collection Account to each Class of Investor Certificates the
Principal Collections from the related Loan Group up to the related Scheduled
Principal Collections Distribution Amount but not in excess of the related
Investor Certificate Principal Balance. On the Distribution Date in February
2026, the Trustee shall distribute to each Class of Investor Certificates the
Principal Collections from the related Loan Group up to the related Investor
Certificate Principal Balance.
(c) Application of Subordinated Transferor Collections. If, after
applying Investor Interest Collections as provided in Section 5.01(a) above,
any Required Amount remains unpaid with respect to a Class, the Trustee shall,
based on information set forth in the Servicing Certificate for such
Distribution Date, apply the following amounts, in the priority, indicated to
make such payments:
(i) Subordinated Transferor Collections for the related Loan
Group;
(ii) Subordinated Transferor Collections, if any, remaining for
the other Loan Group after payments to the Class related to such other
Loan Group pursuant to clause (i) above; and
(iii) amounts on deposit in the Reserve Fund as provided in
Section 5.02(e) below.
If, after making such payments the Required Amount for a Class remains unpaid,
then the remaining Investor Loss Amount for such Class shall be allocated as
follows:
(a) to the extent of the related Available Transferor
Subordinated Amount, to the related Transferor Principal Balance and
not to such Class, and
(b) to the extent of the Available Transferor Subordinated
Amount for the other Loan Group remaining after allocations pursuant
to clause (a) with respect to the other Class, to the Transferor
Principal Balance for such other Loan Group and not to the Class
referred to in clause (a);
provided, however, that no such allocation of Investor Loss Amounts with
respect to either Class of Investor Certificates shall reduce either Transferor
Principal Balance below zero.
(d) Distribution of the Credit Enhancement Draw Amount and Release of
Overcollateralization Step-Down Amounts. With respect to any Distribution Date,
the Trustee will make payments from the amount drawn under the Policy for such
Distribution Date pursuant to Section 4.02.
The aggregate amount of principal distributed to the Holders of either
Class of Investor Certificates under this Agreement shall not exceed the
Original Investor Certificate Principal Balance.
The dollar amount of any Overcollateralization Step-Down Amount will
first be released from the Reserve Fund to the extent of funds on deposit
therein at the direction of the Transferor. If the amount on deposit in the
Reserve Fund with respect to a Class is not sufficient to fund the full amount
of such Overcollateralization Step-Down Amount with respect to a Class, then an
amount equal to the remaining portion of such Overcollateralization Step-Down
Amount will be deducted from the related Scheduled Principal Collections
Distribution Amount and paid to the Transferor.
(e) Reserve Fund.
(i) On each Distribution Date the Trustee shall deposit to the
Reserve Fund the amounts, if any, described in Section 5.01(a)(x)
hereof.
(a) If, on any Distribution Date, and after taking into account
the application of the Investor Interest Collections with respect to
Loan Group 1 plus any Crossover Amount payable from Loan Group 2 (but
not the proceeds of any Credit Enhancement Draw Amount) to the items
listed in clauses (i) through (vii) of Section 5.01(a) hereof with
respect to Loan Group 1 on such Distribution Date, the full amount of
the Investor Certificate Interest with respect to the Class A-1
Investor Certificates has not been paid, and/or a Loan Group 1
Required Amount would result (such deficiency the "Loan Group 1
Deficiency Amount"), the Trustee shall withdraw from the Reserve Fund
and deposit in the Collection Account an amount with respect to the
Class A-1 Investor Certificates equal to the lesser of (x) the product
of (a) the amount then on deposit in the Reserve Fund and (b) a
fraction, the numerator of which is the Loan Group 1 Deficiency Amount
and the denominator of which is the sum of (i) the Loan Group 1
Deficiency Amount plus (ii) the Loan Group 2 Deficiency Amount and (y)
the Loan Group 1 Deficiency Amount.
(b) If, on any Distribution Date, and after taking into account
the application of the Investor Interest Collections with respect to
Loan Group 2 plus any Crossover Amount payable from Loan Group 1 (but
not the proceeds of any Credit Enhancement Draw Amount) to the items
listed in clauses (i) through (vii) of Section 5.01(a) hereof with
respect to Loan Group 2 on such Distribution Date, the full amount of
the Investor Certificate Interest with respect to the Class A-2
Investor Certificates has not been paid, and/or a Loan Group 2
Required Amount would result (such deficiency the "Loan Group 2
Deficiency Amount"), the Trustee shall withdraw from the Reserve Fund
and deposit in the Collection Account an amount with respect to the
Class A-2 Investor Certificates equal to the lesser of (x) the product
of (a) the amount then on deposit in the Reserve Fund and (b) a
fraction, the numerator of which is the Loan Group 2 Deficiency Amount
and the denominator of which is the sum of (i) the Loan Group 2
Deficiency Amount plus (ii) the Loan Group 1 Deficiency Amount and (y)
the Loan Group 2 Deficiency Amount.
(ii) If, on any Distribution Date, the amount on deposit in the
Reserve Fund exceeds the Specified Reserve Fund Requirement, after
giving effect to distributions on such Distribution Date, such excess
shall be released from the Reserve Fund and distributed to the
Transferor.
(f) Method of Distribution. The Trustee shall make distributions in
respect of a Class of Investor Certificates and a Distribution Date to each
related Investor Certificateholder of record on the related Record Date (other
than as provided in Section 10.01 respecting the final distribution) by check
or money order mailed to such Investor Certificateholder at the address
appearing in the Certificate Register, or upon written request by an Investor
Certificateholder delivered to the Trustee at least five Business Days prior to
such Record Date, by wire transfer (but only if such Certificateholder is the
Depository or such Certificateholder owns of record one or more Investor
Certificates having principal denominations aggregating at least $1,000,000),
or by such other means of payment as such Investor Certificateholder and the
Trustee shall agree. Distributions among Holders of Investor Certificates shall
be made in proportion to the related Percentage Interests evidenced by the
Investor Certificates in the related Class of Investor Certificates held by
such Investor Certificateholders.
(g) Distributions on Book-Entry Certificates. Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which
shall credit the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and
disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Investor Certificates. None of the Trustee, the Paying Agent, the
Certificate Registrar, the Depositor, the Credit Enhancer or the Master
Servicer shall have any responsibility therefor except as otherwise provided by
applicable law.
(h) Distributions to Holders of Transferor Certificates. On each
Distribution Date, the Trustee shall, based upon the information set forth in
the Servicing Certificate for such Distribution Date and subject to Section
5.01(c), distribute to the Transferor, with respect to each Loan Group (i) the
related Transferor Interest Collections for the related Collection Period and
(ii) the portion, if any, of Transferor Principal Collections for the related
Collection Period and Loan Group in excess of Additional Balances created on
the Mortgage Loans in such Loan Group during such Collection Period; provided
that collections allocable to the Transferor Certificates will be distributed
to the Transferor only to the extent that such distribution will not reduce the
amount of the Transferor Principal Balance related to such Loan Group as of the
related Distribution Date below the related Minimum Transferor Interest.
Amounts not distributed to the Transferor because of such limitations will be
retained in the Collection Account until the Transferor Principal Balance
exceeds the Minimum Transferor Interest for each Loan Group, at which time such
excess shall be released to the Transferor. If any such amounts are still
retained in the Collection Account upon the commencement of the Rapid
Amortization Period, such amounts will be paid to the Holders of the related
Class of Investor Certificates as a reduction of the related Investor
Certificate Principal Balance.
Section 5.02. Calculation of the Investor Certificate Rate. On the
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second LIBOR Business Day immediately preceding each Distribution Date, the
Trustee shall determine LIBOR for the Interest Period commencing on such
Distribution Date and inform the Master Servicer (at the facsimile number given
to the Trustee in writing) of such rates. On each Determination Date, the
Trustee shall determine the applicable Investor Certificate Rate for each Class
of Investor Certificates on the related Distribution Date.
Section 5.03. Statements to Certificateholders. Concurrently with each
--------------------------------
distribution to Investor Certificateholders, the Trustee shall forward to each
Investor Certificateholder, the Master Servicer, the Credit Enhancer and each
Rating Agency a statement prepared by the Master Servicer pursuant to Section
4.01 with respect to such distribution setting forth, by Loan Group:
(i) the related Investor Floating Allocation Percentage for the
preceding Collection Period;
(ii) the related Investor Certificate Distribution Amount;
(iii) the amount of Investor Certificate Interest for the
related Class of Investor Certificates in such distribution and the
related Investor Certificate Rate;
(iv) the amount, if any, of any Unpaid Investor Certificate
Interest Shortfall for the related Class of Investor Certificates in
such distribution;
(v) the amount, if any, of the remaining Unpaid Investor
Certificate Interest Shortfall for the related Class of Investor
Certificates after giving effect to such distribution;
(vi) the amount, if any, of principal in such distribution for
the related Class of Investor Certificates, separately stating the
components thereof;
(vii) the amount, if any, of the reimbursement of previous
Investor Loss Amounts for the related Class of Investor Certificates
in such distribution;
(viii) the amount, if any, of the aggregate of unreimbursed
Investor Loss Reduction Amounts for the related Class of Investor
Certificates after giving effect to such distribution;
(ix) the amount, if any, of any Basis Risk Carryforward for the
related Class of Investor Certificates in such distribution;
(x) the amount, if any, of the remaining Basis Risk Carryforward
for the related Class of Investor Certificates after giving effect to
such distribution;
(xi) the Servicing Fee for the Mortgage Loans in the related
Loan Group for such Distribution Date;
(xii) the Invested Amount, the Investor Certificate Principal
Balance and the Loan Group Factor, each for the related Class of
Investor Certificates after giving effect to such distribution;
(xiii) the Loan Group Balance as of the end of the preceding
Collection Period and the aggregate of the Asset Balances of the
Mortgage Loans in such Loan Group at the close of business on the last
day of the related Collection Period;
(xiv) the Credit Enhancement Draw Amount for the related Class
of Investor Certificates, if any;
(xv) the number and aggregate Asset Balances of Mortgage Loans
in such Loan Group as to which the Minimum Monthly Payment is
delinquent for 30-59 days, 60-89 days and 90 or more days,
respectively, as of the end of the preceding Collection Period;
(xvi) the book value (within the meaning of 12 C.F.R. Section
571.13 or comparable provision) of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure with respect to
such Loan Group;
(xvii) the amount of any optional advances pursuant to Section
4.05 hereof by the Master Servicer with respect to such Loan Group
included in the distribution on such Distribution Date and the
aggregate amount of optional advances pursuant to Section 4.05 hereof
by the Master Servicer outstanding as of the close of business on such
Distribution Date;
(xviii) the Investor Certificate Rate applicable to the related
Class of Investor Certificates and such distribution;
(xix) the number and principal balances of any Mortgage Loans in
the related Loan Group retransferred to the Transferor pursuant to (a)
Section 2.04 and (b) Section 2.06;
(xx) the amount of Subordinated Transferor Collections with
respect to the related Loan Group , if any, included in such
distribution;
(xxi) the amount of Overcollateralization Step-Down Amount for
the related Class of Investor Certificates, if any, included in such
distribution;
(xxii) the Available Transferor Subordinated Amount with respect
to the related Loan Group for such Distribution Date;
(xxiii) the Overcollateralization Amount for the related Class
of Investor Certificates for the following Distribution Date;
(xxiv) the total amount of funds on deposit in the Reserve Fund,
the amount to be transferred from the Reserve Fund to the Collection
Account; and
(xxv) the Crossover Amount with respect to each Loan Group.
In the case of information furnished pursuant to clauses (ii), (iii)
in respect of Investor Certificate Interest, (iv), (v), (vi), (vii) and (viii)
above, the amounts shall be expressed as a dollar amount per $1,000 increment
of Certificates.
Within 60 days after the end of each calendar year, the Master
Servicer shall prepare or cause to be prepared and shall forward to the Trustee
the information set forth in clauses (iii) and (vi) above aggregated for such
calendar year. Such obligation of the Master Servicer shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Master Servicer or a Paying Agent pursuant to any requirements
of the Code.
The Trustee shall prepare or cause to be prepared (in a manner
consistent with the treatment of the Investor Certificates as indebtedness of
the Transferor, or as may be otherwise required by Section 3.14) Internal
Revenue Service Form 1099 (or any successor form) and any other tax forms
required to be filed or furnished to Certificateholders in respect of
distributions by the Trustee (or the Paying Agent) on the Investor Certificates
and shall file and distribute such forms as required by law.
Section 5.04. Rights of Certificateholders. The Investor Certificates
----------------------------
shall represent fractional undivided interests in the related Loan Group,
including the benefits of the Collection Account and the Reserve Fund and the
right to receive the related Investor Interest Collections, the related
Principal Collections and other amounts at the times and in the amounts
specified in this Agreement; the Transferor Certificates shall represent the
remaining interest in the Trust.
<PAGE>
ARTICLE VI
The Certificates
Section 6.01. The Certificates. The Investor Certificates and
----------------
Transferor Certificates shall be substantially in the forms set forth in
Exhibits A and B, respectively, and shall, on original issue, be executed,
authenticated and delivered by the Trustee to or upon the order of the
Depositor concurrently with the sale and assignment to the Trustee of the
Trust. With respect to each Class of Investor Certificates, the related
Investor Certificates shall be initially evidenced by one or more certificates
representing the entire related Original Investor Certificate Principal Balance
and shall be held in minimum dollar denominations of $25,000 and integral
multiples of $1,000 in excess thereof, except that one Investor Certificate in
each Class may be in a different denomination of less than $1,000 so that the
sum of the denominations of all outstanding Investor Certificates in such Class
shall equal the Original Investor Certificate Principal Balance of such Class.
The sum of the denominations of all outstanding Investor Certificates in a
Class shall equal the Original Investor Certificate Principal Balance of such
Class. The Transferor Certificates shall be issuable as one or more
certificates representing the entire interest in the assets of the Trust other
than that represented by the Investor Certificates and shall initially be
issued to the Sponsor.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer under its seal imprinted
thereon. Certificates bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures were affixed, authorized to sign on
behalf of the Trustee shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Transferor Certificates or did not hold
such offices at the date of such Transferor Certificate. No Certificate shall
be entitled to any benefit under this Agreement, or be valid for any purpose,
unless such Certificate shall have been manually authenticated by the Trustee
substantially in the form provided for herein, and such authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. Subject to
Section 6.02(c), the Investor Certificates shall be Book-Entry Certificates.
The Transferor Certificates shall not be Book-Entry Certificates.
Section 6.02. Registration of Transfer and Exchange of Investor
-------------------------------------------------
Certificates; Appointment of Registrar. (a) The Certificate Registrar shall
- --------------------------------------
cause to be kept at the Corporate Trust Office a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Certificate
Registrar shall provide for the registration of Investor Certificates and of
transfers and exchanges of Investor Certificates as herein provided. The
Trustee shall initially serve as Certificate Registrar for the purpose of
registering Investor Certificates and transfers and exchanges of Investor
Certificates as herein provided.
Upon surrender for registration of transfer of any Investor
Certificate at any office or agency of the Certificate Registrar maintained for
such purpose pursuant to the foregoing paragraph, the Trustee on behalf of the
Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Investor Certificates of the same
Class of the same aggregate Percentage Interest of such Class.
At the option of the Investor Certificateholders, Investor
Certificates in a Class may be exchanged for other Investor Certificates in
such Class in authorized denominations and the same aggregate Percentage
Interests of such Class, upon surrender of the Investor Certificates to be
exchanged at any such office or agency. Whenever any Investor Certificates are
so surrendered for exchange, the Trustee shall execute and authenticate and
deliver the Investor Certificates which the Investor Certificateholder making
the exchange is entitled to receive. Every Investor Certificate presented or
surrendered for transfer or exchange shall (if so required by the Trustee or
the Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Investor Certificates
may not be transferred by the Trustee except to another Depository; (ii) the
Depository shall maintain book-entry records with respect to the Certificate
Owners and with respect to ownership and transfers of such Investor
Certificates; (iii) ownership and transfers of registration of the Investor
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall deal with the Depository as representative of the Certificate
Owners of the Investor Certificates for purposes of exercising the rights of
Holders under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Trustee may rely and
shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and
Persons shown on the books of such indirect participating firms as direct or
indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such Letter of Representation and this
Agreement the terms of this Agreement shall control.
(c) If (i) (x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository, and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of an Event of Servicing
Termination, the Depository, at the direction of Certificate Owners
representing Percentage Interests aggregating not less than 51% of all Investor
Certificates advises the Trustee in writing that the continuation of a
book-entry system through the Depository to the exclusion of definitive, fully
registered Investor Certificates (the "Definitive Certificates") to Certificate
Owners is no longer in the best interests of the Certificate Owners, then upon
surrender to the Certificate Registrar of the Investor Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall execute and authenticate the Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates, and the Trustee, the Certificate Registrar, the Master Servicer
and the Depositor shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Investor Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(i) any mutilated Certificate is surrendered to the Certificate Registrar or
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section 6.03, the Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Certificate Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 6.03, shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 6.04. Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Master Servicer, the Depositor,
the Trustee, the Certificate Registrar, any Paying Agent and any agent of the
Master Servicer, the Depositor, the Trustee, any Paying Agent or the
Certificate Registrar may treat the Person, including a Depository, in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 5.01 and for all other
purposes whatsoever, and none of the Master Servicer, the Depositor, the
Trustee, the Certificate Registrar, any Paying Agent or any agent of any of
them shall be affected by notice to the contrary.
Section 6.05. Restrictions on Transfer of Transferor Certificates. (a)
---------------------------------------------------
The Transferor Certificates shall be assigned, transferred, exchanged, pledged,
financed, hypothecated or otherwise conveyed (collectively, for purposes of
this Section 6.05 and any other Section referring to the Transferor
Certificates, "transferred" or a "transfer") only in accordance with this
Section 6.05.
(b) No transfer of a Transferor Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. Except for the initial issuance of the
Transferor Certificate to the Transferor (and any subsequent transfer by such
Transferor to one of its Affiliates), the Trustee shall require (i) the
transferee to execute an investment letter acceptable to and in form and
substance satisfactory to the Trustee certifying to the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee or (ii) if the investment letter is not delivered, a written
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
said Act or is being made pursuant to said Act, which Opinion of Counsel shall
not be an expense of the Trustee or the Depositor. The Holder of a Transferor
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Transferor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
(c) The Transferor Certificates and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent: (i)
the Person that acquires a Transferor Certificate shall (A) be organized and
existing under the laws of the United States of America or any state or the
District of Columbia thereof, (B) expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, the performance of
every covenant and obligation of the Transferor hereunder and (C) as part of
its acquisition of a Transferor Certificate, acquire all rights of the
Transferor or any transferee under this Section 6.05(c) to amounts payable to
such Transferor or such transferee under Sections 5.01(a)(xv) and 5.01(h); (ii)
the Holder of the Transferor Certificates shall deliver to the Trustee an
Officer's Certificate stating that such transfer and such supplemental
agreement comply with this Section 6.05(c) and that all conditions precedent
provided by this Section 6.05(c) have been complied with and an Opinion of
Counsel stating that all conditions precedent provided by this Section 6.05(c)
have been complied with, and the Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying; (iii) the
Holder of the Transferor Certificates shall deliver to the Trustee a letter
from each Rating Agency confirming that its rating of the Investor
Certificates, after giving effect to such transfer, will not be reduced or
withdrawn without regard to the Policy; (iv) the transferee of the Transferor
Certificates shall deliver to the Trustee an Opinion of Counsel to the effect
that (a) such transfer will not adversely affect the treatment of the Investor
Certificates after such transfer as debt for federal and applicable state
income tax purposes, (b) such transfer will not result in the Trust being
subject to tax at the entity level for federal or applicable state tax
purposes, (c) such transfer will not have any material adverse impact on the
federal or applicable state income taxation of an Investor Certificateholder or
any Certificate Owner and (d) such transfer will not result in the arrangement
created by this Agreement or any "portion" of the Trust, being treated as a
taxable mortgage pool as defined in Section 7701(i) of the Code; (v) all
filings and other actions necessary to continue the perfection of the interest
of the Trust in the Mortgage Loans and the other property conveyed hereunder
shall have been taken or made and (vi) the transferee shall have assumed the
obligations of the Transferor pursuant to Section 7.07 hereof. Notwithstanding
the foregoing, the requirement set forth in subclause (i) (A) of this Section
6.05(c) shall not apply in the event the Trustee shall have received a letter
from each Rating Agency confirming that its rating of the Investor
Certificates, after giving effect to a proposed transfer to a Person that does
not meet the requirement set forth in subclause (i) (A), shall not be reduced
or withdrawn. Notwithstanding the foregoing, the requirements set forth in this
paragraph (c) shall not apply to the initial issuance of the Transferor
Certificates to the Transferor.
(d) Except for the initial issuance of the Transferor Certificate to
the Transferor, no transfer of a Transferor Certificate shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, nor a Person acting on
behalf of any such plan, which representation letter shall not be an expense of
the Trustee, (ii) if the purchaser is an insurance company, an Opinion of
Counsel 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
Transferor Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan, an
Opinion of Counsel to the effect that the purchase or holding of such
Certificate will not result in the assets of the Trust being deemed to be "plan
assets" and subject to the prohibited transaction provisions of ERISA and the
Code and will not subject the Trustee to any obligation in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee or the Depositor.
Section 6.06. Appointment of Paying Agent. (a) The Paying Agent shall
---------------------------
make distributions to Investor Certificateholders from the Collection Account
pursuant to Section 5.01 and shall report the amounts of such distributions to
the Trustee. The duties of the Paying Agent may include the obligation (i) to
withdraw funds from the Collection Account pursuant to Section 3.03 and for the
purpose of making the distributions referred to above and (ii) to distribute
statements and provide information to Certificateholders as required hereunder.
The Paying Agent hereunder shall at all times be a corporation duly
incorporated and validly existing under the laws of the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authorities. The Paying Agent shall initially be the Trustee. The Trustee may
appoint a successor to act as Paying Agent, which appointment shall be
reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Investor Certificateholders in
trust for the benefit of the Investor Certificateholders entitled thereto until
such sums shall be paid to such Certificateholders and shall agree that it
shall comply with all requirements of the Code regarding the withholding of
payments in respect of federal income taxes due from Certificate Owners and
otherwise comply with the provisions of this Agreement applicable to it.
Section 6.07. Acceptance of Obligations. The Transferor, by its
-------------------------
acceptance of the Transferor Certificates, agrees to be bound by and to perform
all the duties of the Transferor set forth in this Agreement.
<PAGE>
ARTICLE VII
The Master Servicer, the Sponsor and the Depositor
Section 7.01. Liability of the Sponsor, the Master Servicer and the
-----------------------------------------------------
Depositor. The Sponsor and the Master Servicer shall be liable in accordance
- ---------
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Sponsor or Master Servicer, as the case may be, herein. The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Depositor herein.
Section 7.02. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Master Servicer or the Depositor. Any corporation into
- ----------------------------------------------------
which the Master Servicer or the Depositor may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Master Servicer or the Depositor shall be a party, or any corporation
succeeding to the business of the Master Servicer or the Depositor, shall be
the successor of the Master Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03. Limitation on Liability of the Master Servicer and
--------------------------------------------------
Others. Neither the Master Servicer nor any of the directors or officers or
- ------
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from the
taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties of the Master Servicer or by
reason of reckless disregard of obligations and duties of the Master Servicer
hereunder. The Master Servicer and any director or officer or employee or agent
of the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director or officer or employee
or agent of the Master Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Master Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to duties to service the Mortgage Loans in accordance with this
Agreement, and which in its opinion may involve it in any expense or liability;
provided, however, that the Master Servicer may in its sole discretion
undertake any such action which it may deem necessary or desirable in respect
of this Agreement, and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust and the Master Servicer
shall only be entitled to be reimbursed therefor pursuant to Section
5.01(a)(xi) or (xii). The Master Servicer's right to indemnity or reimbursement
pursuant to this Section 7.03 shall survive any resignation or termination of
the Master Servicer pursuant to Section 7.04 or 8.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination).
Section 7.04. Master Servicer Not to Resign. Subject to the provisions
-----------------------------
of Section 7.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Master Servicer so causing such a conflict being of a type
and nature carried on by the Master Servicer or its subsidiaries or Affiliates
at the date of this Agreement or (ii) upon satisfaction of the following
conditions: (a) the Master Servicer has proposed a successor Master Servicer to
the Trustee in writing and such proposed successor Master Servicer is
reasonably acceptable to the Trustee; (b) each Rating Agency shall have
delivered a letter to the Trustee prior to the appointment of the successor
Master Servicer stating that the proposed appointment of such successor Master
Servicer as Master Servicer hereunder will not result in the reduction or
withdrawal of the then current rating of the Investor Certificates without
regard to the Policy; and (c) such proposed successor Master Servicer is
reasonably acceptable to the Credit Enhancer, as evidenced by a letter to the
Trustee; provided, however, that no such resignation by the Master Servicer
shall become effective until the Trustee or successor Master Servicer
designated by the Master Servicer as provided above shall have assumed the
Master Servicer's responsibilities and obligations hereunder or the Trustee
shall have designated a successor Master Servicer in accordance with Section
8.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 8.01 and 8.02
as obligations that survive the resignation or termination of the Master
Servicer. Any such determination permitting the resignation of the Master
Servicer pursuant to clause (i) above shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee and the Credit Enhancer. The
Master Servicer shall have no claim (whether by subrogation or otherwise) or
other action against any Certificateholder or the Credit Enhancer for any
amounts paid by the Master Servicer pursuant to any provision of this
Agreement.
Section 7.05. Delegation of Duties. In the ordinary course of
--------------------
business, the Master Servicer at any time may delegate any of its duties
hereunder to any Person, including any of its Affiliates, or any subservicer
referred to in Section 3.01, who agrees to conduct such duties in accordance
with standards comparable to those with which the Master Servicer complies
pursuant to Section 3.01. Such delegation shall not relieve the Master Servicer
of its liabilities and responsibilities with respect to such duties and shall
not constitute a resignation within the meaning of Section 7.04.
Section 7.06. Indemnification of the Trust by the Master Servicer. The
---------------------------------------------------
Master Servicer shall indemnify and hold harmless the Trust and the Trustee
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of the Master Servicer's actions or omissions in servicing
or administering the Mortgage Loans that are not in accordance with this
Agreement, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim. Any
such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
7.06 shall survive termination of this Agreement.
Section 7.07. Indemnification of the Trust by the Transferor.
----------------------------------------------
Notwithstanding anything to the contrary contained herein, the Transferor (i)
agrees to be liable directly to the injured party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than
those attributable to an Investor Certificateholder in the capacity as an
investor in the Investor Certificates as a result of defaults on the Mortgage
Loans) to the extent that the Transferor would be liable if the Trust were a
partnership under the Delaware Revised Uniform Limited Partnership Act in which
the Transferor was a general partner and (ii) shall indemnify and hold harmless
the Trust and the Trustee from and against any loss, liability, expense,
damage, claim or injury (other than those attributable to an Investor
Certificateholder in the capacity as an investor in the Investor Certificates
as a result of defaults on the Mortgage Loans) arising out of or based on this
Agreement by reason of any acts, omissions, or alleged acts or omissions
arising out of activities of the Trust or the Trustee, or the actions of the
Master Servicer including, but not limited to, amounts payable to the Master
Servicer pursuant to Section 7.03, any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided that
the Transferor shall not indemnify the Trustee (but shall indemnify any other
injured party) if such loss, liability, expense, damage or injury is due to the
Trustee's willful malfeasance, bad faith or gross negligence or by reason of
the Trustee's reckless disregard of its obligations hereunder. The provisions
of this indemnity shall run directly to and be enforceable by an injured party
subject to the limitations hereof.
Section 7.08. Limitation on Liability of the Transferor. None of the
-----------------------------------------
directors or officers or employees or agents of the Transferor shall be under
any liability to the Trust, the Trustee or the Certificateholders, it being
expressly understood that all such liability is expressly waived and released
as a condition of, and as consideration for, the execution of this Agreement
and the issuance of the Certificates; provided, however, that this provision
shall not protect any such Person against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of the duties hereunder. Except as provided in Section 7.07,
the Transferor shall not be under any liability to the Trust, the Trustee or
the Certificateholders for any action taken or for refraining from the taking
of any action in its capacity as Transferor pursuant to this Agreement whether
arising from express or implied duties under this Agreement; provided, however,
that this provision shall not protect the Transferor against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder. The Transferor and any
director or officer or employee or agent of the Transferor may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder.
<PAGE>
ARTICLE VIII
Servicing Termination
Section 8.01. Events of Servicing Termination. If any one of the
-------------------------------
following events ("Events of Servicing Termination") shall occur and be
continuing:
(i) Any failure by the Master Servicer to deposit in the
Collection Account any deposit required to be made under the terms of
this Agreement which continues unremedied for a period of five
Business Days (or, if the Master Servicer is permitted to remit
collections on a monthly basis pursuant to Section 3.02(b), three
Business Days) after the date upon which written notice of such
failure shall have been given to the Master Servicer by the Trustee or
to the Master Servicer and the Trustee by the Credit Enhancer or
Holders of Investor Certificates of either Class evidencing Percentage
Interests aggregating not less than 25% of such Class; or
(ii) Failure on the part of the Master Servicer duly to observe
or perform in any material respect any other covenants or agreements
of the Master Servicer set forth in the Certificates or in this
Agreement, which failure materially and adversely affects the
interests of the Certificateholders or the Credit Enhancer and
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, and
stating that such notice is a "Notice of Default" hereunder, shall
have been given to the Master Servicer by the Trustee or to the Master
Servicer and the Trustee by the Credit Enhancer or the Holders of
Investor Certificates of either Class evidencing Percentage Interests
aggregating not less than 25% of such Class; or
(iii) The entry against the Master Servicer of a decree or order
by a court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a trustee, conservator, receiver
or liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 consecutive days; or
(iv) The consent by the Master Servicer to the appointment of a
trustee, conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Master Servicer or of or relating to substantially all of its
property; or the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations;
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Master Servicer, with respect
to an Event of Servicing Termination specified in (i) through (iv), above,
either the Trustee, the Credit Enhancer or the Holders of Investor Certificates
evidencing Percentage Interests aggregating not less than 51% of all Classes of
Investor Certificates with the consent of the Credit Enhancer, by notice then
given in writing to the Master Servicer (and to the Trustee if given by the
Credit Enhancer or the Holders of Investor Certificates) may terminate all of
the rights and obligations of the Master Servicer as servicer under this
Agreement. Any such notice to the Master Servicer shall also be given to each
Rating Agency and the Credit Enhancer. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and related
documents, or otherwise. The Master Servicer agrees to cooperate with the
Trustee in effecting the termination of the responsibilities and rights of the
Master Servicer hereunder, including, without limitation, the transfer to the
Trustee for the administration by it of all cash amounts that shall at the time
be held by the Master Servicer and to be deposited by it in the Collection
Account, or that have been deposited by the Master Servicer in the Collection
Account or thereafter received by the Master Servicer with respect to the
Mortgage Loans. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Mortgage Files to the successor
Master Servicer and amending this Agreement to reflect such succession as
Master Servicer pursuant to this Section 8.01 shall be paid by the predecessor
Master Servicer (or if the predecessor Master Servicer is the Trustee, the
initial Master Servicer) upon presentation of reasonable documentation of such
costs and expenses.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 8.01(i) for a period of ten Business Days or under Section
8.01(ii) for a period of 60 Business Days, shall not constitute an Event of
Servicing Termination if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Master Servicer and such delay or
failure was caused by an act of God or the public enemy, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Master Servicer from using its best
efforts to perform its respective obligations in a timely manner in accordance
with the terms of this Agreement and the Master Servicer shall provide the
Trustee, the Transferor, the Credit Enhancer and the Investor
Certificateholders with an Officers' Certificate giving prompt notice of such
failure or delay by it, together with a description of its efforts to so
perform its obligations. The Master Servicer shall immediately notify the
Trustee in writing of any Events of Servicing Termination.
Section 8.02. Trustee to Act; Appointment of Successor. (a) On and
----------------------------------------
after the time the Master Servicer receives a notice of termination pursuant to
Section 8.01 or resigns pursuant to Section 7.04, the Trustee shall be the
successor in all respects to the Master Servicer in its capacity as Master
Servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof. Notwithstanding the above, if the Trustee becomes the Master Servicer
hereunder, it shall have no responsibility or obligation (i) of repurchase or
substitution with respect to any Mortgage Loan, (ii) with respect to any
representation or warranty of the Master Servicer, and (iii) for any act or
omission of either a predecessor or successor Master Servicer other than the
Trustee. As compensation therefor, the Trustee shall be entitled to such
compensation as the Master Servicer would have been entitled to hereunder if no
such notice of termination had been given. In addition, the Trustee will be
entitled to compensation with respect to its expenses in connection with
conversion of certain information, documents and record keeping, as provided in
Section 7.04(b). Notwithstanding the above, (i) if the Trustee is unwilling to
act as successor Master Servicer, or (ii) if the Trustee is legally unable so
to act, the Trustee may (in the situation described in clause (i)) or shall (in
the situation described in clause (ii)) appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer having a
net worth of not less than $15,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder; provided that any such
successor Master Servicer shall be acceptable to the Credit Enhancer, as
evidenced by the Credit Enhancer's prior written consent, which consent shall
not be unreasonably withheld; and provided further that the appointment of any
such successor Master Servicer will not result in the qualification, reduction
or withdrawal of the ratings assigned to the Certificates by the Rating
Agencies without regard to the Policy. Pending appointment of a successor to
the Master Servicer hereunder, unless the Trustee is prohibited by law from so
acting, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in an amount
equal to the compensation which the Master Servicer would otherwise have
received pursuant to Section 3.08 (or such lesser compensation as the Trustee
and such successor shall agree). The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) Any successor, including the Trustee, to the Master Servicer as
Master Servicer shall during the term of its service as Master Servicer (i)
continue to service and administer the Mortgage Loans for the benefit of
Certificateholders and the Credit Enhancer and (ii) maintain in force a policy
or policies of insurance covering errors and omissions in the performance of
its obligations as Master Servicer hereunder and a fidelity bond in respect of
its officers, employees and agents to the same extent as the Master Servicer is
so required pursuant to Section 3.12. The appointment of a successor Master
Servicer shall not affect any liability of the predecessor Master Servicer
which may have arisen under this Agreement prior to its termination as Master
Servicer (including, without limitation, any deductible under an insurance
policy pursuant to Section 3.04), nor shall any successor Master Servicer be
liable for any acts or omissions of the predecessor Master Servicer or for any
breach by such Master Servicer of any of their representations or warranties
contained herein.
Section 8.03. Notification to Certificateholders. Upon any termination
----------------------------------
or appointment of a successor to the Master Servicer pursuant to this Article
VIII or Section 7.04, the Trustee shall give prompt written notice thereof to
the Certificateholders at their respective addresses appearing in the
Certificate Register, the Credit Enhancer and each Rating Agency.
<PAGE>
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee. The Trustee, prior to the occurrence
-----------------
of an Event of Servicing Termination and after the curing or waiver of all
Events of Servicing Termination which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Servicing Termination has occurred (which has not
been cured or waived) of which a Responsible Officer has knowledge, the Trustee
shall exercise such of the rights and powers vested in it by this Agreement,
and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs; provided, however, that if the Trustee is acting as Master Servicer it
shall use the same degree of care and skill as is required of the Master
Servicer under this Agreement.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Servicing Termination
of which a Responsible Officer of the Trustee has knowledge, and after
the curing or waiver of all such Events of Servicing Termination which
may have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the consent or direction of the Credit Enhancer or
in accordance with the direction of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than
51% of both Classes of Investor Certificates relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
failure by the Master Servicer to comply with the obligations of the
Master Servicer referred to in clauses (i) and (ii) of Section 8.01 or
of the occurrence of a Rapid Amortization Event unless a Responsible
Officer of the Trustee at the Corporate Trust Office obtains actual
knowledge of such failure or the Trustee receives written notice of
such failure from the Master Servicer, the Credit Enhancer or the
Holders of Investor Certificates evidencing Percentage Interests
aggregating not less than 51% of both Classes of Investor
Certificates.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. None
of the provisions contained in this Agreement shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of the Master Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement and in no event shall it be required to
perform or accept responsibility for the obligations of the Depositor, the
Sponsor or the Transferor.
Section 9.02. Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 9.01:
(i) the Trustee may request and rely upon, and shall be
protected in acting or refraining from acting upon, any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders or the Credit Enhancer, pursuant to the provisions
of this Agreement, unless such Certificateholders or the Credit
Enhancer shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or wilful misconduct in the performance of any such act;
nothing contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence of an Event of Servicing Termination
(which has not been cured or waived) of which a Responsible Officer
has knowledge, to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs, unless it is acting
as Master Servicer;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(v) prior to the occurrence of an Event of Servicing Termination
and after the curing or waiver of all Events of Servicing Termination
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or documents, unless
requested in writing to do so by Holders of Investor Certificates
evidencing Percentage Interests aggregating not less than 51%;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a
condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Master Servicer or, if paid by the
Trustee, shall be reimbursed by the Master Servicer upon demand.
Nothing in this clause (v) shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer until such time as the Trustee may be
required to act as Master Servicer pursuant to Section 8.02; and
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through an Affiliate, agents or attorneys or a custodian.
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans.
-----------------------------------------------------
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than
the signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer.
The Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
8.02); the validity of the assignment of any Mortgage Loan to the Trustee or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee
shall assume the duties of the Master Servicer pursuant to Section 8.02); the
compliance by the Depositor, the Sponsor or the Master Servicer with any
warranty or representation made under this Agreement or in any related document
or the accuracy of any such warranty or representation prior to the Trustee's
receipt of notice or other discovery of any non-compliance therewith or any
breach thereof; any investment of monies by or at the direction of the Master
Servicer or any loss resulting therefrom, it being understood that the Trustee
shall remain responsible for any Trust property that it may hold in its
individual capacity; the acts or omissions of any of the Depositor, the Master
Servicer (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 8.02), any subservicer or any Mortgagor; any
action of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 8.02), or any subservicer
taken in the name of the Trustee; the failure of the Master Servicer or any
subservicer to act or perform any duties required of it as agent of the Trustee
hereunder; or any action by the Trustee taken at the instruction of the Master
Servicer (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 8.02); provided, however, that the foregoing shall
not relieve the Trustee of its obligation to perform its duties under this
Agreement. The Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder (unless the Trustee shall have become the successor Master Servicer)
or, except as otherwise provided in Section 3.13, to prepare or file any
Securities and Exchange Commission filing for the Trust or to record this
Agreement.
Section 9.04. Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights as it would have if it were not Trustee and
may transact any banking and trust business with the Sponsor, the Master
Servicer, the Credit Enhancer or the Depositor.
Section 9.05. Master Servicer to Pay Trustee's Fees and Expenses;
---------------------------------------------------
Master Servicer to Indemnify. The Master Servicer covenants and agrees to pay
- ----------------------------
to the Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts hereby created and in the
exercise and performance of any of the powers and duties hereunder of the
Trustee, and the Master Servicer will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith
or which is the responsibility of Certificateholders hereunder. The Master
Servicer covenants and agrees to indemnify the Trustee from, and hold it
harmless against, any and all losses, liabilities, damages, claims or expenses
other than those resulting from the negligence or bad faith of the Trustee.
This section shall survive termination of this Agreement or the resignation or
removal of any Trustee hereunder.
Section 9.06. Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation duly incorporated and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 9.06, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The principal office of the Trustee
(other than the initial Trustee) shall be in a state with respect to which an
Opinion of Counsel has been delivered to such Trustee at the time such Trustee
is appointed Trustee to the effect that the Trust will not be a taxable entity
under the laws of such state. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.07.
Section 9.07. Resignation or Removal of Trustee. The Trustee may at
---------------------------------
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Transferor, the Depositor, the Master Servicer,
the Credit Enhancer and each Rating Agency. Upon receiving such notice of
resignation, the Transferor shall promptly appoint a successor Trustee
(approved in writing by the Credit Enhancer, so long as such approval is not
unreasonably withheld) by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee (who shall deliver a
copy to the Master Servicer) and one copy to the successor Trustee; provided,
however, that any such successor Trustee shall be subject to the prior written
approval of the Transferor. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Transferor or the Credit Enhancer, or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or if a tax is imposed or threatened with respect to the Trust by
any state in which the Trustee or the Trust is located (which tax cannot be
vacated by the appointment of a co-Trustee or separate trustee pursuant to
Section 9.10), then the Transferor or the Credit Enhancer may remove the
Trustee. If the Transferor or the Credit Enhancer removes the Trustee under the
authority of the immediately preceding sentence, the Transferor shall promptly
appoint a successor Trustee (approved in writing by the Credit Enhancer, which
approval shall not be unreasonably withheld) by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Holders of Investor Certificates evidencing Percentage Interests
aggregating over 50% of all Investor Certificates in the aggregate or the
Credit Enhancer may at any time remove the Trustee by written instrument or
instruments delivered to the Master Servicer, the Transferor and the Trustee;
the Transferor shall thereupon use its best efforts to appoint a successor
trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.07 shall
not become effective until acceptance of appointment by the successor Trustee
as provided in Section 9.08.
Section 9.08. Successor Trustee. Any successor Trustee appointed as
-----------------
provided in Section 9.07 shall execute, acknowledge and deliver to the
Transferor, the Depositor, the Master Servicer, the Credit Enhancer and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Transferor, the Depositor, the Master Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in this
Section 9.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 9.08, the successor Trustee shall mail notice of the succession of
such Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency. If the Master
Servicer fails to mail such notice within 30 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Master Servicer.
Section 9.09. Merger or Consolidation of Trustee. Any Person into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to all or substantially all of the business of the Trustee, shall be the
successor of the Trustee hereunder, provided such Person shall be eligible
under the provisions of Section 9.06, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 9.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Mortgaged Property may at the time be located, the
Transferor and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments necessary to appoint one or more Persons
approved by the Credit Enhancer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 9.10, such
powers, duties, obligations, rights and trusts as the Transferor and the
Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Master Servicer. If the
Transferor shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in the case an Event of Servicing
Termination shall have occurred and be continuing, the Trustee alone shall have
the power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 9.08. The Master
Servicer shall be responsible for the fees of any co-trustee or separate
trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of an Event of
Servicing Termination, the Trustee acting alone may accept the
resignation or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Transferor and the Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a
new or successor Trustee.
Section 9.11. Limitation of Liability. The Certificates are executed
-----------------------
by the Trustee, not in its individual capacity but solely as Trustee of the
Trust, in the exercise of the powers and authority conferred and vested in it
by this Agreement. Each of the undertakings and agreements made on the part of
the Trustee in the Certificates is made and intended not as a personal
undertaking or agreement by the Trustee but is made and intended for the
purpose of binding only the Trust.
Section 9.12. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Certificates. All rights of action and claims under this Agreement or the
- ------------
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursement and advances of the Trustee, its agents and counsel, be
for the ratable benefit or the Certificateholders in respect of which such
judgment has been recovered.
Section 9.13. Suits for Enforcement. In case an Event of Servicing
---------------------
Termination or other default by the Master Servicer, the Transferor, the
Depositor or the Sponsor hereunder shall occur and be continuing, the Trustee,
in its discretion, may proceed to protect and enforce its rights and the rights
of the Investor Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee and the Certificateholders.
<PAGE>
ARTICLE X
Termination
Section 10.01. Termination. (a) The respective obligations and
-----------
responsibilities of the Sponsor, the Master Servicer, the Depositor, the
Transferor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Master Servicer to send certain
notices as hereinafter set forth) shall terminate upon the last action required
to be taken by the Trustee on the final Distribution Date pursuant to this
Article X following the later of (A) payment in full of all amounts owing to
the Credit Enhancer and (B) the earliest of (i) the transfer, under the
conditions specified in Section 10.01(b), to the Transferor of the Investor
Certificateholders' interest in each Mortgage Loan and all property acquired in
respect of any Mortgage Loan remaining in the Trust for an amount equal to the
sum of (w) the aggregate Investor Certificate Principal Balance, (x) accrued
and unpaid aggregate Investor Certificate Interest through the day preceding
the final Distribution Date, and (y) interest accrued on any aggregate Unpaid
Investor Certificate Interest Shortfall, to the extent legally permissible,
(ii) the day following the Distribution Date on which the distribution made to
Investor Certificateholders has reduced the Investor Certificate Principal
Balance of each Class of Investor Certificates to zero, (iii) the final payment
or other liquidation of the last Mortgage Loan remaining in the Trust
(including without limitation the disposition of the Mortgage Loans pursuant to
Section 10.02) or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan and (iv) the Distribution Date
in February 2026; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the date of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James's, living on the date hereof. Upon
termination in accordance with clause (i) or (ii) of this Section 10.01, the
Trustee shall execute such documents and instruments of transfer presented by
the Transferor, in each case without recourse, representation or warranty, and
take such other actions as the Transferor may reasonably request to effect the
transfer of the Mortgage Loans to the Transferor.
(b) The Transferor shall have the right to exercise the option to
effect the transfer to the Transferor of each Mortgage Loan pursuant to Section
10.01(a) above on any Distribution Date on or after the Distribution Date
immediately prior to which the aggregate Investor Certificate Principal Balance
is less than or equal to 10% of the aggregate Original Investor Certificate
Principal Balance and all amounts due and owing to the Credit Enhancer for
unpaid premiums and unreimbursed draws on the Policy, together with interest
thereon as provided under the Insurance Agreement, have been paid.
(c) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Investor Certificateholders may surrender their Investor Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee (upon receipt of written directions from the
Transferor, if the Transferor is exercising its right to transfer of the
Mortgage Loans, given not later than the first day of the month preceding the
month of such final distribution) to the Credit Enhancer and to the Master
Servicer by letter to Investor Certificateholders mailed not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of such final distribution specifying (i) the Distribution Date upon which
final distribution of the Investor Certificates will be made upon presentation
and surrender of Investor Certificates at the office or agency of the Trustee
therein designated, (ii) the amount of any such final distribution and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
the Investor Certificates at the office or agency of the Trustee therein
specified. In the event written directions are delivered by the Transferor to
the Trustee as described in the preceding sentence, the Transferor shall
deposit in the Collection Account on or before the Distribution Date for such
final distribution in immediately available funds an amount which, when added
to the funds on deposit in the Collection Account that are payable to the
Investor Certificateholders, will be equal to the retransfer amount for the
Mortgage Loans computed as above provided.
(d) Upon presentation and surrender of the Investor Certificates, the
Trustee shall cause to be distributed to the Holders of Investor Certificates
on the Distribution Date for such final distribution, in proportion to the
Percentage Interests of their respective Investor Certificates and to the
extent that funds are available for such purpose, an amount equal to (i) if
such final distribution is not being made pursuant to the transfer to the
Transferor pursuant to Section 10.01(a)(i), the amount required to be
distributed to Investor Certificateholders pursuant to Section 5.01 for such
Distribution Date and (ii) if such final distribution is being made pursuant to
such retransfer, the amount specified in Section 10.01(a)(i). The distribution
on such final Distribution Date pursuant to a retransfer pursuant to Section
10.01(a)(i) shall be in lieu of the distribution otherwise required to be made
on such Distribution Date in respect of the Certificates. On the final
Distribution Date prior to having made the distributions called for above, the
Trustee shall, based upon the information set forth in the Servicing
Certificate for such Distribution Date, withdraw from the Collection Account
and remit to the Credit Enhancer the lesser of (x) the amount available for
distribution on such final Distribution Date, net of any portion thereof
necessary to pay the amounts described in clauses (d)(i) and (ii) above and (y)
the unpaid amounts due and owing to the Credit Enhancer for unpaid premiums and
unreimbursed draws on the Policy, together with interest thereon as provided
under the Insurance Agreement.
(e) In the event that all of the Investor Certificateholders shall not
surrender their Investor Certificates for final payment and cancellation on or
before such final Distribution Date, the Trustee shall on such date cause all
funds in the Collection Account not distributed in final distribution to
Investor Certificateholders to be withdrawn therefrom and credited to the
remaining Investor Certificateholders by depositing such funds in a separate
escrow account for the benefit of such Investor Certificateholders and the
Transferor (if the Transferor has exercised its right to transfer the Mortgage
Loans) or the Trustee (in any other case) shall give a second written notice to
the remaining Investor Certificateholders to surrender their Investor
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Investor
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Investor Certificateholders concerning surrender of their
Investor Certificates, and the cost thereof shall be paid out of the funds on
deposit in such escrow account.
<PAGE>
ARTICLE XI
Rapid Amortization Events
Section 11.01. Rapid Amortization Events. If any one of the following
-------------------------
events shall occur during the Managed Amortization Period:
(a) failure on the part of the Sponsor (i) to make any payment
or deposit required by the terms of this Agreement, on or before the
date occurring three Business Days after the date such payment or
deposit is required to be made herein, or (ii) to cause the Depositor
to duly observe or perform in any material respect the covenants of
the Depositor set forth in Section 2.05 or (iii) duly to observe or
perform in any material respect any other covenants or agreements of
the Sponsor set forth in this Agreement, which failure, in each case,
materially and adversely affects the interests of the
Certificateholders or the Credit Enhancer and which, in the case of
clause (iii), continues unremedied and continues to affect materially
and adversely the interests of the Certificateholders or the Credit
Enhancer for a period of 60 days (five days in the case of any failure
to take the action specified in the second sentence of Section
2.01(b)) after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Sponsor by the Trustee, or to the Sponsor and the Trustee by the
Credit Enhancer or the Holders of Investor Certificates evidencing
Percentage Interests aggregating not less than 51% of both Classes of
Investor Certificates;
(b) any representation or warranty made by the Sponsor or the
Depositor in this Agreement shall prove to have been incorrect in any
material respect when made, as a result of which the interests of the
Investor Certificateholders or the Credit Enhancer are materially and
adversely affected and which continues to be incorrect in any material
respect and continues to affect materially and adversely the interests
of the Certificateholders or the Credit Enhancer for a period of 60
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Sponsor or the
Depositor, as the case may be, by the Trustee, or to the Sponsor, the
Depositor and the Trustee by either the Credit Enhancer or the Holders
of Investor Certificates evidencing Percentage Interests aggregating
not less than 51% of both Classes of Investor Certificates; provided,
however, that a Rapid Amortization Event pursuant to this subparagraph
(b) shall not be deemed to have occurred hereunder if the Sponsor has
accepted retransfer of the related Mortgage Loan or Mortgage Loans or
made a substitution therefor during such period (or such longer period
(not to exceed an additional 60 days) as the Trustee may specify) in
accordance with the provisions hereof;
(c) the Transferor or the Depositor shall voluntarily go into
liquidation, consent to the appointment of a conservator or receiver
or liquidator or similar person in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of
or relating to the Transferor or the Depositor, or of or relating to
all or substantially all of such Person's property, or a decree or
order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Transferor or the Depositor and such decree or
order shall have remained in force undischarged or unstayed for a
period of 30 days; or the Transferor or the Depositor shall admit in
writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations;
(d) the Trust shall become subject to registration as an
"investment company" under the Investment Company Act of 1940, as
amended; or
(e) the aggregate of all draws under the Policy exceeds 1% of
the Cut-off Date Pool Balance;
then, in the case of any event described in subparagraph (a) or (b) after the
applicable grace period, if any, set forth in such subparagraphs, either the
Trustee, the Credit Enhancer or the Holders of Investor Certificates evidencing
Percentage Interests aggregating more than 51% of both Classes of Investor
Certificates, by notice given in writing to the Transferor, the Depositor and
the Master Servicer (and to the Trustee if given by either the Credit Enhancer
or the Investor Certificateholders) may declare that an early amortization
event (a "Rapid Amortization Event") has occurred as of the date of such
notice, and in the case of any event described in subparagraph (c), (d) or (e),
a Rapid Amortization Event shall occur without any notice or other action on
the part of the Trustee, the Credit Enhancer or the Investor
Certificateholders, immediately upon the occurrence of such event.
<PAGE>
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment. This Agreement may be amended from time to
---------
time by the Sponsor, the Master Servicer, the Depositor and the Trustee, in
each case without the consent of any of the Certificateholders, but only with
the consent of the Credit Enhancer (which consent shall not be unreasonably
withheld), (i) to cure any ambiguity, (ii) to correct any defective provisions
or to correct or supplement any provisions herein that may be inconsistent with
any other provisions herein, (iii) to add to the duties of the Sponsor, the
Depositor, the Transferor or the Master Servicer, (iv) to add any other
provisions with respect to matters or questions arising under this Agreement or
the Policy, as the case may be, which shall not be inconsistent with the
provisions of this Agreement, (v) to add or amend any provisions of this
Agreement as required by any Rating Agency or any other nationally recognized
statistical rating organization in order to maintain or improve any rating of
the Investor Certificates (it being understood that, after obtaining the
ratings in effect on the Closing Date, neither the Trustee, the Transferor, the
Sponsor, the Depositor nor the Master Servicer is obligated to obtain, maintain
or improve any such rating), (vi) to add or amend any provisions of this
Agreement to correct or cure any defective provision or ambiguity as a result
of a transfer of the Transferor Certificates pursuant to Section 6.05, (vii) to
comply with any requirement imposed by the Code or (viii) to increase the
Increased Senior Lien Limitation; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, materially and adversely affect the
interests of any Certificateholder or the Credit Enhancer; and provided,
further, that the amendment shall not be deemed to adversely affect in any
material respect the interests of the Certificateholders and no opinion
referred to in the preceding proviso shall be required to be delivered if the
Person requesting the amendment obtains a letter from each Rating Agency
stating that the amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Investor Certificates without
regard to the Policy. Notwithstanding the foregoing, any amendment pursuant to
clause (viii) above shall be permissible only upon receipt of a letter from
each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Investor Certificateholders without regard to the Policy.
This Agreement also may be amended from time to time by the Master
Servicer, the Sponsor, the Depositor and the Trustee, and the Master Servicer
and the Credit Enhancer, may from time to time consent to the amendment of the
Policy, with the consent of the Holders of the Investor Certificates evidencing
Percentage Interests aggregating not less than 51% of each Class of Investor
Certificates affected thereby or if both Classes are affected thereby by
Holders evidencing Percentage Interests aggregating not less than 51% of both
Classes of Investor Certificates, and in the case of an amendment to this
Agreement, with the consent of the Credit Enhancer, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments on the
Certificates or distributions or payments under the Policy which are required
to be made on any Certificate without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentage required to consent to any
such amendment, without the consent of the Holders of all Certificates then
outstanding or (iii) adversely effect in any material respect the interests of
the Credit Enhancer.
Notwithstanding the foregoing, the Agreement may not be amended
unless, in connection with such amendment, an Opinion of Counsel is furnished
to the Trustee that such amendment will not (i) adversely affect the status of
the Investor Certificates as debt; (ii) result in the Trust being taxable at
the entity level; or (iii) result in the Trust being classified as a taxable
mortgage pool (as defined in Section 7701(i) of the Code).
Following the execution and delivery of any such amendment hereto or
to the Policy to which the Credit Enhancer was required to consent, either the
Transferor, if the Transferor requested the amendment, or the Master Servicer,
if the Master Servicer requested the amendment, shall reimburse the Credit
Enhancer for the reasonable out-of-pocket costs and expenses incurred by the
Credit Enhancer in connection with such amendment.
Prior to the execution of any such amendment, the party hereto
requesting any such amendment shall furnish written notification of the
substance of such amendment to each Rating Agency. In addition, promptly after
the execution of any such amendment made with the consent of the Investor
Certificateholders, the Trustee shall furnish written notification of the
substance of such amendment to each Investor Certificateholder and fully
executed original counterparts of the instruments effecting such amendment to
the Credit Enhancer.
It shall not be necessary for the consent of Investor
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Trustee may prescribe.
In executing any amendment permitted by this Section 12.01, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that such amendment is authorized or
permitted hereby and that all conditions precedent to the execution and
delivery of such amendment have been satisfied. The Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.
Section 12.02. Recordation of Agreement. This Agreement is subject to
------------------------
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Trustee, but only upon direction of Investor Certificateholders accompanied by
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Investor Certificateholders. The Investor
Certificateholders requesting such recordation shall bear all costs and
expenses of such recordation. The Trustee shall have no obligation to ascertain
whether such recordation so affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03. Limitation on Rights of Certificateholders. The death
------------------------------------------
or incapacity of any Investor Certificateholder shall not operate to terminate
this Agreement or the Trust, nor entitle such Investor Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
in Sections 8.01, 9.01, 9.02, 11.01 and 12.01) or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association; nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Investor Certificates evidencing Percentage Interests
aggregating not less than 51% shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding; it being understood and intended, and
being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under this Agreement, except in the manner herein provided
and for the equal, ratable and common benefit of all Certificateholders. For
the protection and enforcement of the provisions of this Section 12.03, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
By accepting its Investor Certificate, each Investor Certificateholder
agrees that unless a Credit Enhancer Default exists, the Credit Enhancer shall
have the right to exercise all rights of the Investor Certificateholders under
this Agreement without any further consent of the Investor Certificateholders.
Section 12.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 12.05. Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by certified mail, return receipt requested,
to (a) in the case of the Depositor, 4500 Park Granada, Calabasas, California
91302, Attention: Legal Department, (b) in the case of the Master Servicer,
Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas, California 91302,
Attention: Legal Department, (c) in the case of the Trustee, at the Corporate
Trust Office, (d) in the case of the Credit Enhancer, One State Street Plaza,
New York, New York 10004, Attention: Structured Finance -- Mortgage Backed
Securities (telecopy number (212) 363-1459), (e) in the case of Moody's,
Residential Loan Monitoring Group, 4th Floor, 99 Church Street, New York, New
York 10007, and (f) in the case of Standard & Poor's, 55 Water Street, New
York, New York 10041, or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party. In each case
in which a notice or other communication to the Credit Enhancer refers to an
Event of Servicing Termination or a claim under the Policy or with respect to
which failure on the part of the Credit Enhancer to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
shall be marked to indicate "URGENT MATERIAL ENCLOSED." Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder receives such notice. Any notice or other document
required to be delivered or mailed by the Trustee to any Rating Agency shall be
given on a best efforts basis and only as a matter of courtesy and
accommodation and the Trustee shall have no liability for failure to deliver
such notice or document to any Rating Agency.
Section 12.06. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 12.07. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Sections 6.05, 7.02 and 7.04, this
Agreement may not be assigned by the Depositor or the Master Servicer without
the prior written consent of the Credit Enhancer and Holders of the Investor
Certificates evidencing Percentage Interests aggregating not less than 66%.
Section 12.08. Certificates Nonassessable and Fully Paid. The parties
-----------------------------------------
agree that the Investor Certificateholders shall not be personally liable for
obligations of the Trust, that the beneficial ownership interests represented
by the Certificates shall be nonassessable for any losses or expenses of the
Trust or for any reason whatsoever, and that the Certificates upon execution,
authentication and delivery thereof by the Trustee pursuant to Section 2.07 or
6.02 are and shall be deemed fully paid.
Section 12.09. Third-Party Beneficiaries. This Agreement will inure to
-------------------------
the benefit of and be binding upon the parties hereto, the Certificateholders,
the Certificate Owners, the Credit Enhancer and their respective successors and
permitted assigns. Except as otherwise provided in this Agreement, no other
Person will have any right or obligation hereunder.
Section 12.10. Counterparts. This instrument may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 12.11. Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Sponsor, the Master Servicer
and the Trustee have caused this Agreement to be duly executed by their
respective officers all as of the day and year first above written.
CWABS, INC.,
as Depositor
By: ________________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Sponsor and Master Servicer
By: ________________________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: ________________________________________
Name:
Title:
<PAGE>
State of ________________ )
) ss.:
County of________________ )
On the __th day of November, 1999 before me, a notary public in and
for the State of ____________, personally appeared ____________, known to me
who, being by me duly sworn, did depose and say that he resides at
_________________________________, __________; that he is the ______________ of
CWABS, Inc. a Delaware corporation, one of the parties that executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his
name thereto by like order.
_________________________________
Notary Public
[Notarial Seal]
<PAGE>
State of ________________ )
) ss.:
County of________________ )
On the __th day of November, 1999 before me, a notary public in and
for the State of ________, personally appeared _____________________, known to
me who, being by me duly sworn, did depose and say that he resides at
_________________, ____________, ________ _____; that he is the ______________
of Bank One, National Association, a national banking association, one of the
parties that executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.
_________________________________
Notary Public
[Notarial Seal]
<PAGE>
State of ________________ )
) ss.:
County of________________ )
On the __th day of November, 1999 before me, a notary public in and
for the State of New York, personally appeared ____________, known to me who,
being by me duly sworn, did depose and say that he resides at
______________________________ _____________; that he is the
________________________ of Countrywide Home Loans, Inc., a New York
corporation, one of the parties that executed the foregoing instrument; and
that he signed his name thereto by order of the Board of Directors of said
corporation.
_________________________________
Notary Public
[Notarial Seal]
<PAGE>
Exhibit A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Investor Certificate Class: Class A-[o]
Original Investor $[o]
Certificate Principal Balance
Principal Balance of this Investor
Certificate : $[o]
Certificate Rate : Variable
Initial Aggregate Investor
Certificate Principal Balance
of all Class [o] Investor Certificates $[o]
CUSIP No. : [o]
Date of Pooling
and Servicing
Agreement : November 29, 1999
Certificate No. : [o]
Cut-off Date : November 29, 1999
First Distribution
Date: : January 18, 2000
Maturity Date [ ]
<PAGE>
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 1999-D
INVESTOR CERTIFICATE
CLASS A-[o]
evidencing a percentage interest in the distributions
allocable to the Class A-[o] Investor Certificates evidencing
an undivided interest in Loan Group [o] of a Trust consisting
primarily of a pool of adjustable rate home equity revolving
credit line mortgage loans sold by
CWABS, INC.
This Certificate does not represent an obligation of or interest in
CWABS, Inc. (the "Depositor"), Countrywide Home Loans, Inc. or the Trustee
referred to below or any of their affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Original Investor Certificate Principal Balance of this Certificate by the
aggregate Original Investor Certificate Principal Balance of all Investor
Certificates in this Class) in certain monthly distributions with respect to
Loan Group [o] in a Trust consisting primarily of a pool of mortgage loans (the
"Mortgage Loans"), transferred by the Depositor to the Trustee and serviced by
Countrywide Home Loans, Inc. (in such capacity, the "Master Servicer",
including any successor Master Servicer under the Agreement referred to below).
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Depositor, the Master Servicer,
Countrywide Home Loans, Inc., as sponsor (in such capacity, the "Sponsor"), and
Bank One, National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
This Certificate is one of the Class A-[o] Investor Certificates from
a duly authorized issue of Certificates designated as Revolving Home Equity
Loan Asset Backed Certificates, Series 1999-D, representing, to the extent
specified in the Agreement, an undivided interest in: (i) each Mortgage Loan in
Loan Group [o] including its Asset Balance (including all Additional Balances)
and all collections in respect thereof received after the Cut-off Date
(excluding payments in respect of accrued interest due on or prior to the
Cut-off Date), (ii) property that secured a Mortgage Loan in Loan Group [o]
that is acquired by foreclosure or deed in lieu of foreclosure, (iii) an
irrevocable and unconditional limited financial guarantee insurance policy (the
"Policy"), (iv) the Depositor's rights under the hazard insurance policies in
respect of the Mortgage Loans in Loan Group [o], (v) an assignment of the
Depositor's rights under the purchase agreement dated as of November 29, 1999
between the Sponsor, as seller, and the Depositor, as purchaser (collectively,
the "Trust Assets") and (vi) certain other property described in the Agreement.
Distributions on this Certificate will be made by the Trustee, or by
the Paying Agent, if any, appointed pursuant to the Agreement, by check mailed
to the Person entitled thereto as such name and address shall appear on the
Certificate Register or, upon written request by such Person delivered to the
Trustee at least five Business Days prior to the related Record Date, by wire
transfer (but only if such Person owns of record one or more Class A-[o]
Investor Certificates having principal denominations aggregating at least
$1,000,000), or by such other means of payment as such Person and the Trustee
shall agree. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee or the Paying Agent,
if one has been appointed, of the pendency of such distribution, and only upon
presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month or if such day is not a Business Day, then on the
next succeeding Business Day (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day preceding such
Distribution Date (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate in the Class A-[o] Investor
Certificates and the amount required to be distributed to Holders of Class
A-[o] Investor Certificates on such Distribution Date under the terms of the
Agreement. Notwithstanding the foregoing, if Definitive Certificates have
become available pursuant to the Agreement, the Record Date shall be the last
day of the calendar month preceding the month of such Distribution Date.
The Certificates are limited in right of payment to certain payments
on and collections in respect of the Mortgage Loans in the related Loan Group,
all as more specifically set forth in the Agreement. The Certificateholder, by
its acceptance of this Certificate, agrees that it will look solely to the
funds on deposit in the Collection Account received with respect to Loan Group
[o] for payment hereunder, and that the Trustee in its individual capacity is
not personally liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
As provided in the Agreement, withdrawals from the Collection Account
may be made from time to time for purposes other than distributions to the
Investor Certificateholders and, subject to certain conditions in the
Agreement, Mortgage Loans may, at the election of the Transferor, be removed
from the Trust and transferred to the Transferor (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
It is the intention of the Transferor, the Depositor and the Investor
Certificateholders that the Investor Certificates will be indebtedness for
federal, state and local income and franchise tax purposes and for purposes of
any other tax imposed on or measured by income. The Depositor, the Trustee and
the Holder of this Certificate for Certificate Owner) by acceptance of this
Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest herein) agrees to
treat the Investor Certificates (or beneficial interest therein), for purposes
of federal, state and local income or franchise taxes and any other tax imposed
on or measured by income, as indebtedness secured by the Trust Assets and to
report the transactions contemplated by the Agreement on all applicable tax
returns in a manner consistent with such treatment. Each Holder of this
Certificate agrees that it will cause any Certificate Owner acquiring an
interest in this Certificate through it to comply with the Agreement as to
treatment as indebtedness for federal, state and local income and franchise tax
purposes and for purposes of any other tax imposed on or measured by income.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Sponsor, the Master Servicer, the Depositor and the Trustee, and the rights of
the Certificateholders under the Agreement, at any time by the Sponsor, the
Master Servicer, the Depositor and the Trustee with the consent (i) of the
Holders of Investor Certificates evidencing Percentage Interests aggregating
not less than 51% and (ii) of the Credit Enhancer. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Investor Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Certificate Registrar for such purpose, accompanied by a written instrument
of transfer in form satisfactory to the Master Servicer, the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Class A-[o]
Certificates of authorized denominations, if applicable, and evidencing the
same aggregate Percentage Interest of the Class A-[o] Investor Certificates
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates in the same Class of Investor
Certificates of a like tenor in authorized denominations (in the case of the
Investor Certificates) and evidencing the same aggregate Percentage Interest,
as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Sponsor, the Master Servicer, the Depositor, the
Credit Enhancer and the Certificate Registrar and any agent of the foregoing
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Trustee, the Sponsor, the Master
Servicer, the Depositor, the Credit Enhancer, the Certificate Registrar nor any
such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (i) payment in
full of all amounts owing to the Credit Enhancer and (ii) the earliest of (a)
the transfer, under the conditions specified in the Agreement, to the
Transferor (as defined in the Agreement) of the interest of the Holders of the
Investor Certificates in each Mortgage Loan in the related Loan Group and all
property acquired in respect of any Mortgage Loan remaining in the Trust, (b)
the day following the Distribution Date on which distributions reduce the
Investor Certificate Principal Balance to zero, (c) the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust and (d) the
Distribution Date in February 2026. The Transferor may effect an early
retirement of the Certificates by paying the retransfer price and accepting
retransfer of the Trust Assets pursuant to the terms of the Agreement on any
Distribution Date after the Investor Certificate Principal Balance of each
Class of Investor Certificates is less than or equal to 10% of the Original
Investor Certificate Principal Balance of such Class; provided, however, that
in no event shall the Trust continue beyond the expiration of 21 years from the
death of certain person named in the Agreement. Upon retirement of the
Certificates in accordance with Section 10.01 of the Agreement, the Trustee
shall execute such documents and instruments of transfer presented by the
Transferor and take such other actions as the Transferor may reasonably request
to effect the retransfer of the Mortgage Loans to the Transferor.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual or facsimile signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee on behalf of the Trust
By: _______________________________________
Certificate of Authentication:
This is one of the Class A-[o] Investor
Certificates referenced in the
within-mentioned Agreement.
By: _________________________________
Authorized Officer
<PAGE>
Exhibit B
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 6.05 OF THE AGREEMENT REFERRED TO HEREIN. NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, A PLAN SUBJECT TO SECTION
4975 OF THE CODE AS AMENDED, OR A PERSON ACTING ON BEHALF OF OR USING THE
ASSETS OF ANY SUCH PLAN, OR THAT IF SUCH TRANSFEREE IS AN INSURANCE COMPANY,
THAT THE TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING THIS
CERTIFICATE WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS
SUCH TERM IS DEFINED IN SECTION V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
COVERED UNDER SECTIONS I AND III OF PTCE 95-60; OR AN OPINION OF COUNSEL IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.05(d) OF THE AGREEMENT REFERRED TO
HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN
SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
<PAGE>
Date of Pooling and Servicing
Agreement : November 29, 1999
Cut-off Date : November 29, 1999
Percentage Interest : 100%
Certificate No. : [o]
First Distribution Date : [ ]
<PAGE>
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 1999-D
TRANSFEROR CERTIFICATE
evidencing a percentage interest in the distributions
allocable to the Transferor Certificates evidencing an
undivided interest in a Trust consisting primarily of a pool
of adjustable rate home equity revolving credit line mortgage
loans sold by
CWABS, INC.
This Certificate does not represent an obligation of or interest in
CWABS, Inc. (the "Depositor"), Countrywide Home Loans, Inc. or the Trustee
referred to below or any of their affiliates. Neither this Certificate nor the
underlying Assets are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ____________________________ is the registered
owner of the Percentage Interest evidenced by this Certificate in the entire
interest not allocated to the Investor Certificates in certain monthly
distributions with respect to a Trust consisting primarily of a pool of
mortgage loans (the "Mortgage Loans"), transferred by the Depositor and
serviced by Countrywide Home Loans, Inc. (in such capacity, the "Master
Servicer", including any successor Master Servicer under the Agreement referred
to below). The Trust was created pursuant to a Pooling and Servicing Agreement
dated as specified above (the "Agreement") among the Depositor, the Master
Servicer, as sponsor and as Master Servicer (the "Sponsor" or the "Master
Servicer," as appropriate), and Bank One, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate is one of the Transferor Certificates from a duly
authorized issue of Certificates designated as Revolving Home Equity Loan Asset
Backed Certificates, Series 1999-D, representing, to the extent specified in
the Agreement, an undivided interest in: (i) each Mortgage Loan including its
Asset Balance (including all Additional Balances) and all collections in
respect thereof received after the Cut-off Date (excluding payments in respect
of accrued interest due on or prior to the Cut-off Date), (ii) property that
secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of
foreclosure, (iii) the Depositor's rights under the hazard insurance policies
in respect of the Mortgage Loans, (iv) an assignment of the Depositor's rights
under the purchase agreement dated as of November 29, 1999 between the Sponsor,
as seller, and the Depositor, as purchaser, and (v) certain other property
described in the Agreement (collectively, the "Trust Assets").
The certificates are limited in right of payment to certain payments
on and collections in respect of the Trust Assets, all as more specifically set
forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds available in
accordance with the terms of the Agreement for payment hereunder and that the
Trustee in its individual capacity is not personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Sponsor, the Master Servicer, the Depositor and the Trustee, and the rights of
the Certificateholders under the Agreement, at any time by the Sponsor, the
Master Servicer, the Depositor and the Trustee with the consent (i) of the
Holders of Investor Certificates evidencing Percentage Interests aggregating
not less than 51% and (ii) of the Credit Enhancer. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Investor Certificates.
No transfer of this Transferor Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. There shall be delivered to the Trustee
either (i) an investment letter acceptable to and in form and substance
satisfactory to the Trustee certifying to the Trustee the facts surrounding
such transfer, which investment letter shall not be an expense of the Trustee,
or (ii) if such letter is not delivered, an Opinion of Counsel acceptable to
and in form and substance satisfactory to the Trustee and the Depositor that
such transfer is exempt (describing the applicable exemption and the basis
therefor) from or is being made pursuant to the registration requirements of
the Securities Act of 1933, as amended, which Opinion of Counsel shall not be
an expense of the Trustee. The Holder hereof desiring to effect such Transfer
shall, and does hereby agree to, indemnify the Transferor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
As provided in the Agreement and subject to certain limitations set
forth therein, and subject to the restrictions set forth on the first page
hereof, neither this Certificate nor any legal or beneficial interest herein
may be, directly or indirectly, purchased, transferred, sold, pledged, assigned
or otherwise disposed of, and any proposed transferee hereof shall not become
the registered Holder hereof, without the satisfaction of the conditions set
forth in Section 6.05 of the Agreement.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Trustee, the Master Servicer, the Depositor, the Credit Enhancer
and the Certificate Registrar and any agent of the foregoing may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Master Servicer, the Depositor, the
Credit Enhancer, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (i) payment in
full of all amounts owing to the Credit Enhancer and (ii) the earliest of (a)
the transfer, under the conditions specified in the Agreement, to the
Transferor (as defined in the Agreement) of the interest of the Holders of the
Investor Certificates in each Mortgage Loan and all property acquired in
respect of any Mortgage Loan remaining in the Trust, (b) the day following the
Distribution Date on which distributions reduce the Investor Certificate
Principal Balance to zero, (c) the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or (d) the Distribution Date in
February 2026. The Transferor may effect an early retirement of the
Certificates by paying the retransfer price and accepting retransfer of the
Trust Assets pursuant to the terms of the Agreement on any Distribution Date
after the Investor Certificate Principal Balance is less than or equal to 10%
of the Original Investor Certificate Principal Balance; provided, however, that
in no event shall the Trust continue beyond the expiration of 21 years from the
death of certain person named in the Agreement. Upon retirement of the
Certificates in accordance with Section 10.01 of the Agreement, the Trustee
shall execute such documents and instruments of transfer presented by the
Transferor and take such other actions as the Transferor may reasonably request
to effect the retransfer of the Mortgage Loans to the Transferor.
<PAGE>
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual or facsimile signature this Certificate
shall not be to be duly executed.
Dated:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee on behalf of the Trust
By: __________________________________________
Certificate of Authentication:
This is one of the Investor Certificates referenced in the within-mentioned
Agreement.
By: _________________________________
Authorized Officer
<PAGE>
EXHIBIT C
MORTGAGE LOAN SCHEDULE
[Delivered to Trustee Only]
<PAGE>
Exhibit D
FORM OF CREDIT LINE AGREEMENT
<PAGE>
Exhibit E
FORM OF LETTER OF REPRESENTATIONS
<PAGE>
Exhibit F
FORM OF INVESTMENT LETTER [NON-RULE 144A]
FOR TRANSFEROR CERTIFICATES
Date:
CWABS, Inc.
as Depositor
4500 Park Granada
Calabasas, California 91302
Attention: ________________
Bank One, National Association
as Trustee
1 Bank One Plaza
Suite IL1-0126
Chicago Illinois 60670-126
Attn: Corporate Trust Services Division
Re:______CWABS, Inc.;
Countrywide Home Equity Loan Trust 1999-D,
Revolving Home Equity Loan Asset Backed Certificates,
Series 1999-D, Transferor Certificates
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of Transferor Certificates in the
Denomination of ____________________________, we certify that (a) we understand
that the Transferor Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Regulation D under the Act, and have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of investments in the Transferor Certificates, (c) we have
had the opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Transferor Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Transferor Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, nor a plan subject to Section 4975 of the Internal Revenue
Code of 1986, as amended, nor are we acting on behalf of any such employee
benefit plan, or (ii) if we are an insurance company, a representation that we
are an insurance company which is purchasing such Certificates with funds
contained in an "insurance company general account" (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and that the purchase and holding of such Certificates are covered under PTCE
95-60, (e) we are acquiring the Transferor Certificates for investment for our
own account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Transferor Certificates in accordance with clause (g) below), (f) we have not
offered or sold any Transferor Certificates to, or solicited offers to buy any
Transferor Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, or taken any other action which would
result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Transferor Certificates unless (1) such
sale, transfer or other disposition is made pursuant to an effective
registration statement under the Act or is exempt from such registration
requirements, and if requested, we will at our expense provide an opinion of
counsel satisfactory to the addressees of this Transferor Certificate that such
sale, transfer or other disposition) may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Transferor Certificate has
executed and delivered to you a certificate to substantially the same effect as
this certificate, and (3) the purchaser or transferee has otherwise complied
with any conditions for transfer set forth in the Pooling and Servicing
Agreement dated as of November 29, 1999 (the "Agreement"), among CWABS, Inc. as
Depositor, Countrywide Home Loans, Inc., as Master Servicer, and Bank One,
National Association, as Trustee. All capitalized terms used herein but not
defined herein shall have the meanings assigned to them in the Agreement.
Very truly yours,
________________________________
Name of Transferee
By: ____________________________
Name:
Title:
<PAGE>
FORM OF INVESTMENT LETTER RULE 144A LETTER
FOR TRANSFEROR CERTIFICATES
Date:
CWABS, Inc.
as Depositor
4500 Park Granada
Calabasas, California 91302
Attention: ________________
Bank One, National Association
as Trustee
1 Bank One Plaza
Suite IL1-0126
Chicago Illinois 60670-126
Attn: Corporate Trust Services Division
Re:______CWABS, Inc.;
Countrywide Home Equity Loan Trust 1999-D,
Revolving Home Equity Loan Asset Backed Certificates,
Series 1999-D, Transferor Certificates
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of the Transferor
Certificates, we certify that (a) we understand that the Transferor
Certificates are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the
Act and any such laws, (b) we have such knowledge and experience in financial
and business matters that we are capable of evaluating the merits and risks of
investments in the Transferor Certificates, (c) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Transferor Certificates and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the
Transferor Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, nor a plan subject to Section 4975 of the Internal Revenue Code of
1986, nor are we acting on behalf of any such employee benefit plan, or (ii) if
we are an insurance company, a representation that we are an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under PTCE 95-60, (e) we have not, nor
has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Transferor Certificates, any interest in the
Transferor Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Transferor Certificates, any interest in the Transferor Certificates or any
other similar security from, or otherwise approached or negotiated with respect
to the Transferor Certificates, any interest in the Transferor Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Transferor
Certificates under the Act or that would render the disposition of the
Transferor Certificates a violation of Section 5 of the Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Transferor
Certificates and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Transferor Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Transferor Certificates
may be resold, pledged or transferred only (i) to a person reasonably believed
to be a qualified institutional buyer that purchases for its own account or for
the account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Act. All capitalized
terms used herein but not defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement dated as of November 29, 1999 among
CWABS, Inc. as Depositor, Countrywide Home Loans, Inc., as Sponsor Master
Servicer, and Bank One, National Association, as Trustee.
Name of Buyer
By: _____________________________
Name:
Title:
<PAGE>
ANNEX 1 TO Exhibit F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Transferor Certificates described
therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $ 1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
__________ Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
__________ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the state or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
__________ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution,
which is supervised and examined by a State or Federal
authority having supervision over any such institutions
or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is
attached hereto.
- --------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that
case, Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
<PAGE>
__________ Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
__________ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or
a similar official or agency of a State, territory or
the District of Columbia.
_________ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its
political subdivisions for the benefit of its
employees.
__________ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
__________ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
__________ Small Business Investment Company. The Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958.
__________ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940.
__________ Trust Fund. The Buyer is a trust fund whose trustee is
a bank or trust company and whose participants are
exclusively State or Local Plans or ERISA Plans as
defined above, and no participant of the Buyer is an
individual retirement account or an H.R. 10 (Keogh)
plan.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities Exchange Act
of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Transferor
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Transferor Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan as provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
___________________________________
Name of Buyer
By: ______________________________
Name:
Title:
Date: ____________________________
<PAGE>
ANNEX 2 TO Exhibit F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees that are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Transferor Certificates described
therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
qualified institutional buyer as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
With respect to the cost of those securities has been published. If clause (ii)
in the preceding sentence applies, the securities may be valued at market.
__________ The Buyer owned $ in securities (other than the
excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance With Rule 144A).
__________ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $ in securities (other than
the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Transferor Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Transferor Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
________________________________________
Name of Buyer
By: ___________________________________
Name:
Title:
IF AN ADVISOR:
________________________________________
Name of Advisor
Date:
<PAGE>
Exhibit G
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
[DATE]
Bank One, National Association
as Trustee
1 Bank One Plaza
Suite IL1-0126
Chicago Illinois 60670-126
Attn: Corporate Trust Services Division
Re: CWABS, Inc. Revolving Home Equity Loan
Asset Backed Certificates, Series 1999-D
Gentlemen:
In connection with the administration of the Mortgage Loans held by
you as Trustee under the Pooling and Servicing Agreement dated as of November
29, 1999, among CWABS, Inc. as Depositor, Countrywide Home Loans, Inc., as
Sponsor and Master Servicer, and you, as Trustee (the "Agreement"), we hereby
request a release of the Mortgage File held by you as Trustee with respect to
the following described Mortgage Loan for the reason indicated below.
Loan No.:
Reason for requesting file:
__________ 1. Mortgage Loan paid in full. (The Master Servicer
hereby certifies that all amounts received in
connection with the payment in full of the
Mortgage Loan which are required to be deposited
in the Collection Account pursuant to Section
3.02 of the Agreement have been so deposited).
__________ 2. Retransfer of Mortgage Loan. (The Master Servicer
hereby certifies that the Transfer Deposit Amount
has been deposited in the Collection Account
pursuant to the Agreement).
__________ 3. The Mortgage Loan is being foreclosed.
__________ 4. The Mortgage Loan is being re-financed by another
depository institution. (The Master Servicer
hereby certifies that all amounts received in
connection with the payment in full of the
Mortgage Loan which are required to be deposited
in the Collection Account pursuant to Section
3.02 of the Agreement have been so deposited).
__________ 5. Other (Describe).
The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Agreement and will
promptly be returned to the Trustee when the need therefor by the Master
Servicer no longer exists unless the Mortgage Loan has been liquidated or
retransferred.
Capitalized terms used herein shall have the meanings ascribed to them
in the Agreement.
COUNTRYWIDE HOME LOANS, INC.
By:______________________________
Name:
Title: Servicing Officer
<PAGE>
EXHIBIT H-1
FORM OF INITIAL CERTIFICATION
[date]
[Depositor]
[Master Servicer]
[Sponsor]
___________________________
___________________________
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Sponsor and Master
Servicer, and Bank One, National Association,
as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 1999-D
---------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan listed on the attached Document Exception Report) it has
received, among other things:
(i) the original Mortgage Note endorsed in blank; and
(ii) an original Assignment of Mortgage in blank in recordable form.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
Bank One, National Association,
as Trustee
By:___________________________________
Name:
Title:
<PAGE>
EXHIBIT H-2
FORM OF DELAY DELIVERY CERTIFICATION
[date]
[Depositor]
[Master Servicer]
[Sponsor]
_______________________
_______________________
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Sponsor and Master
Servicer, and Bank One, National Association,
as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 1999-D
---------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan listed on the attached Document Exception Report) it has
received, among other things:
(i) the original Mortgage Note endorsed in blank; and
(ii) an original Assignment of Mortgage in blank in recordable form.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
Bank One, National Association,
as Trustee
By:_________________________________
Name:
Title:
<PAGE>
EXHIBIT I
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Sponsor]
_______________________
_______________________
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Sponsor and Master
Servicer, and Bank One, National Association,
as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 1999-D
---------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached Document Exception Report) it has received:
(i) the original Mortgage Note endorsed in blank;
(ii) an original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage or, if, in connection with any
Mortgage Loan, the original recorded Mortgage with evidence of recording thereon
cannot be delivered on or prior to the Closing Date because of a delay caused by
the public recording office where such original Mortgage has been delivered for
recordation or because such original Mortgage has been lost, the Sponsor, at
the direction of the Depositor, shall deliver or cause to be delivered to the
Custodian, as agent for the Trustee, a true and correct copy of such Mortgage,
together with (i) in the case of a delay caused by the public recording office,
an Officer's Certificate which may be in the form of a blanket certificate
covering more than one Mortgage of the Depositor stating that such original
Mortgage has been dispatched to the appropriate public recording official or
(ii) in the case of an original Mortgage that has been lost, a certificate by
the appropriate county recording office where such Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if any
("Intervening Assignments"), with evidence of recording thereon, showing a
complete chain of title to the Mortgage from the originator to the Depositor or,
if any such original Intervening Assignment has not been returned from the
applicable recording office or has been lost, a true and correct copy thereof,
together with (i) in the case of a delay caused by the public recording office,
an Officer's Certificate [same addition as iii]of the Sponsor stating that such
original Intervening Assignment has been dispatched to the appropriate public
recording official for recordation or (ii) in the case of an original
Intervening Assignment that has been lost, a certificate by the appropriate
county recording office where such Mortgage is recorded;
(v) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(vi) the original of any guaranty executed in connection with the
Mortgage Note;
(vii) the original of each assumption, modification, consolidation or
substitution agreement, if any, relating to the Mortgage Loan; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (ii), (iii), (iv) and
(v) of the definition of the "Mortgage Loan Schedule" in Section 1.01 of the
Pooling and Servicing Agreement accurately reflects information set forth in
the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
Bank One, National Association,
as Trustee
By:_______________________________
Name:
Title:
EXHIBIT 99.2
- ------------
- --------------------------------------------------------------------------------
CWABS, INC.
as Purchaser,
and
COUNTRYWIDE HOME LOANS, INC.
as Seller,
------------------------------------
PURCHASE AGREEMENT
Dated as of November 29, 1999
------------------------------------
Revolving Home Equity Loan Asset Backed Certificates
Series 1999-D
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.................................................1
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.1. Sale of the Mortgage Loans..................................1
Section 2.2. Obligations of Seller Upon Sale.............................2
Section 2.3. Payment of Purchase Price for the Mortgage Loans............3
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties.......................4
Section 3.2. Seller Representations and Warranties Relating to the
Mortgage Loans..............................................5
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller....................................10
ARTICLE V
SERVICING
Section 5.1. Servicing..................................................10
ARTICLE VI
TERMINATION
Section 6.1. Termination................................................10
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Amendment..................................................11
Section 7.2. Governing Law..............................................11
Section 7.3. Notices....................................................11
Section 7.4. Severability of Provisions.................................11
Section 7.5. Counterparts...............................................11
Section 7.6. Further Agreements.........................................12
Section 7.7. Successors and Assigns: Assignment of Purchase Agreement...12
Section 7.8. Survival...................................................12
<PAGE>
PURCHASE AGREEMENT, dated as of November 29, 1999 (this "Agreement"),
between Countrywide Home Loans, Inc., a New York corporation (the "Seller"),
and CWABS, Inc., a Delaware corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Seller is the owner of the notes or other evidence of
indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto, and
Related Documentation (as defined below) (collectively, the "Mortgage Loans");
and
WHEREAS, the Seller owns the mortgages (the "Mortgages") on the
properties (the "Mortgaged Properties") securing such Mortgage Loans, including
rights to (a) any property acquired by foreclosure or deed in lieu of
foreclosure or otherwise and (b) the proceeds of any hazard insurance policies
in respect of the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of November 29, 1999 (the "Pooling and Servicing Agreement") among the
Purchaser, as depositor, the Seller, as sponsor and master servicer, and Bank
One, National Association, as trustee (the "Trustee"), the Purchaser will
convey the Mortgage Loans to the Trust.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Capitalized terms used but not defined
herein shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.1. Sale of the Mortgage Loans. The Seller, concurrently with
the execution and delivery of this Agreement, does hereby sell, assign, set
over, and otherwise convey to the Purchaser, without recourse, all of its
right, title and interest in, to and under the following, whether now existing
or hereafter created: (i) each Mortgage Loan, including its Asset Balance
(including all Additional Balances) and all collections in respect thereof
received after the Cut-off Date (excluding payments in respect of accrued
interest due on or prior to the Cut-off Date); (ii) property that secured a
Mortgage Loan that is acquired by foreclosure or deed in lieu of foreclosure;
(iii) the interest of the Seller in any hazard insurance policies in respect of
the Mortgage Loans; (iv) all rights under any guaranty executed in connection
with a Mortgage Loan; and (v) all proceeds of the foregoing.
Section 2.2. Obligations of Seller Upon Sale. In connection with any
transfer pursuant to Section 2.1 hereof, the Seller further agrees, at its own
expense, on or prior to the Closing Date, (a) to indicate in its books and
records that the Mortgage Loans have been sold to the Trustee, as assignee of
the Purchaser, pursuant to this Agreement and (b) to deliver to the Purchaser a
Mortgage Loan Schedule containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, among other things, as of the
Cut-off Date (i) its account number and (ii) the related Cut-off Date Asset
Balance. Such Mortgage Loan Schedule forms a part of Exhibit C to the Pooling
and Servicing Agreement and shall also be marked as Schedule I to this
Agreement and is hereby incorporated into and made a part of this Agreement.
The Seller agrees to prepare, execute and file a UCC-1 financing
statement with the Secretary of State in the State of California (which shall
have been filed on or before the Closing Date with respect to the Mortgage
Loans) describing the applicable Mortgage Loans and naming the Seller as debtor
and the Purchaser as secured party (and indicating that such loans have been
assigned to the Trustee) and all necessary continuation statements and any
amendments to the UCC-1 financing statements required to reflect a change in
the name or corporate structure of the Seller or the filing of any additional
UCC-1 financing statements due to the change in the principal offices of the
Seller, as are necessary to perfect and protect the Trustee's interest in each
Mortgage Loan and the proceeds thereof.
In connection with any conveyance by the Seller, the Seller shall
deliver to the Depositor, or at the Depositor's direction, to the Trustee (a)
on the Closing Date, with respect to not less than 50% of the Mortgage Loans,
and (b) within 30 days following the Closing Date, with respect to the
remaining the Mortgage Loans, the following documents or instruments with
respect to each Mortgage Loan (the "Related Documentation"):
(i) the original Mortgage Note endorsed in blank;
(ii) an original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage or, if, in connection with any
Mortgage Loan, the original recorded Mortgage with evidence of recording
thereon cannot be delivered on or prior to the Closing Date because of a delay
caused by the public recording office where such original Mortgage has been
delivered for recordation or because such original Mortgage has been lost, the
Seller, at the direction of the Purchaser, shall deliver or cause to be
delivered to the Trustee, a true and correct copy of such Mortgage, together
with (i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Purchaser stating that such original Mortgage has
been dispatched to the appropriate public recording official or (ii) in the
case of an original Mortgage that has been lost, a certificate by the
appropriate county recording office where such Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if any
("Intervening Assignments"), with evidence of recording thereon, showing a
complete chain of title to the Mortgage from the originator to the Purchaser
or, if any such original Intervening Assignment has not been returned from the
applicable recording office or has been lost, a true and correct copy thereof,
together with (i) in the case of a delay caused by the public recording office,
an Officer's Certificate of the Seller stating that such original Intervening
Assignment has been dispatched to the appropriate public recording official for
recordation or (ii) in the case of an original Intervening Assignment that has
been lost, a certificate by the appropriate county recording office where such
Mortgage is recorded;
(v) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(vi) the original of any guaranty executed in connection with the
Mortgage Note;
(vii) the original of each assumption, modification, consolidation or
substitution agreement, if any, relating to the Mortgage Loan; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage.
The Seller further hereby confirms to the Purchaser that, as of the
Closing Date, it has caused the portions of the Electronic Ledger relating to
the Mortgage Loans maintained by the Seller to be clearly and unambiguously
marked to indicate that the Mortgage Loans have been sold to the Trustee, as
assignee of the Purchaser.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to this Section 2.2.
Notwithstanding the characterization of the Investor Certificates as
debt for Federal, state and local income and franchise tax purposes, the
parties hereto intend to treat the transfer of the Mortgage Loans as provided
herein as a sale for accounting and other purposes, by the Seller to the
Purchaser of all the Seller's right, title and interest in and to the Mortgage
Loans and other property described above. In the event such transfer is deemed
not to be a sale, the Seller hereby grants to the Purchaser a security interest
in all of the Seller's right, title and interest in, to and under the Mortgage
Loans and other property described above, whether now existing or hereafter
created, to secure all of the Seller's obligations hereunder; and this
Agreement shall constitute a security agreement under applicable law.
Section 2.3. Payment of Purchase Price for the Mortgage Loans. In
consideration of the sale of the Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on the
Closing Date by transfer of immediately available funds, an amount equal to
$440,000,108.52 (the "Purchase Price"), and to transfer to the Seller on the
Closing Date the Transferor Certificates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties. The Seller
represents and warrants to the Purchaser as of the Closing Date:
(i) The Seller is a New York corporation, validly existing and in
good standing under the laws of the State of New York, and has the corporate
power to own its assets and to transact the business in which it is currently
engaged. The Seller is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the character of the
business transacted by it or any properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
other) of the Seller;
(ii) The Seller has the power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated under the
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of the Seller enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies;
(iii) The Seller is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be, prior to the Closing Date;
(iv) The execution, delivery and performance of this Agreement by the
Seller will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Seller or any provision of the
Certificate of Incorporation or Bylaws of the Seller, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which the
Seller is a party or by which the Seller may be bound; and
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the knowledge
of the Seller threatened, against the Seller or any of its properties or with
respect to this Agreement or the Investor Certificates which in the opinion of
the Seller has a reasonable likelihood of resulting in a material adverse effect
on the transactions contemplated by this Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.1 shall survive the sale and assignment of the
Mortgage Loans to the Purchaser. The Seller shall cure a breach of any
representations and warranties in accordance with the Pooling and Servicing
Agreement. It is understood and agreed that the remedy specified in the Pooling
and Servicing Agreement shall constitute the sole remedy against the Seller
respecting such breach.
Section 3.2. Seller Representations and Warranties Relating to the
Mortgage Loans. The Seller represents and warrants to the Purchaser as of the
Cut-off Date, unless otherwise specifically set forth herein:
(i) As of the Closing Date, this Agreement constitutes a legal,
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as enforcement of such terms may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect affecting the enforcement of creditors' rights generally
and by the availability of equitable remedies;
(ii) As of the Closing Date with respect to the Mortgage Loans and as
of the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, either (A) this Agreement constitutes a valid transfer and
assignment to the Purchaser of all right, title and interest of the Seller in
and to the Cut-off Date Asset Balances with respect to the applicable Mortgage
Loans, all monies due or to become due with respect thereto (excluding payments
in respect of accrued interest due on or prior to the Cut-off Date), and all
proceeds of such Cut-off Date Asset Balances with respect to the Mortgage Loans
and such funds as are from time to time deposited in the Collection Account
(excluding any investment earnings thereon) and all other property specified in
the first paragraph of Section 2.01(a) of the Pooling and Servicing Agreement
as being part of the corpus of the Trust conveyed to the Trust by the
Purchaser, and upon payment for the Additional Balances, will constitute a
valid transfer and assignment to the Purchaser of all right, title and interest
of the Seller in and to the Additional Balances, all monies due or to become
due with respect thereto, and all proceeds of such Additional Balances and all
other property specified in the first paragraph of Section 2.01(a) of the
Pooling and Servicing Agreement relating to the Additional Balances or (B) this
Agreement, as appropriate, constitutes a grant of a security interest (as
defined in the UCC as in effect in California) in such property to the
Purchaser. If this Agreement constitutes the grant of a security interest to
the Purchaser in such property, the Purchaser shall have a first priority
perfected security interest in such property, subject to the effect of Section
9-306 of the UCC with respect to collections on the Mortgage Loans that are
deposited in the Collection Account in accordance with the next to last
paragraph of Section 3.02(b) of the Pooling and Servicing Agreement;
(iii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan and as of the date any Additional Balance is created, the
information set forth in the Mortgage Loan Schedule for such Mortgage Loans is
true and correct in all material respects;
(iv) The applicable Cut-off Date Asset Balance has not been assigned
or pledged, and the Seller is the sole owner and holder of such Cut-off Date
Asset Balance free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges or security interests of
any nature, and has full right and authority, under all governmental and
regulatory bodies having jurisdiction over the ownership of the applicable
Mortgage Loan, to sell, assign or transfer the same pursuant to this Agreement;
(v) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, the related Mortgage Note and the Mortgage with respect to each
Mortgage Loan have not been assigned or pledged, and immediately prior to the
sale of the Mortgage Loans to the Purchaser, the Seller was the sole owner and
holder of the Mortgage Loan free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or security
interests of any nature, and has full right and authority, under all
governmental and regulatory bodies having jurisdiction over the ownership of
the applicable Mortgage Loans, to sell and assign the same pursuant to this
Agreement;
(vi) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, the related Mortgage is a valid and subsisting first or second
lien, as set forth on the Mortgage Loan Schedule with respect to each related
Mortgage Loan, on the property therein described, and as of the Cut-off Date
and the applicable date of substitution the related Mortgaged Property is free
and clear of all encumbrances and liens having priority over the first or
second lien, as applicable, of such Mortgage except for liens for (i) real
estate taxes and special assessments not yet delinquent; (ii) any first
mortgage loan secured by such Mortgaged Property and specified on the Mortgage
Loan Schedule; (iii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording that
are acceptable to mortgage lending institutions generally; and (iv) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage;
(vii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, there is no valid offset, defense or counterclaim of any obligor
under any Credit Line Agreement or Mortgage;
(viii) To the best knowledge of the Seller, as of the Closing Date
with respect to the Mortgage Loans and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, there is no delinquent
recording or other tax or fee or assessment lien against any related Mortgaged
Property;
(ix) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, there is no proceeding pending or, to the best knowledge of the
Seller, threatened for the total or partial condemnation of the related
Mortgaged Property, and such property is free of material damage;
(x) To the best knowledge of the Seller, as of the Closing Date with
respect to the Mortgage Loans and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, there are no mechanics' or
similar liens or claims which have been filed for work, labor or material
affecting the related Mortgaged Property which are, or may be, liens prior or
equal to the lien of the related Mortgage, except liens which are fully insured
against by the title insurance policy referred to in clause (xiv);
(xi) No Minimum Monthly Payment is more than 59 days delinquent
(measured on a contractual basis) and no more than 0.00% of the Mortgage Loans
in Loan Group 1 and no more than 0.00% of the Mortgage Loans in Loan Group 2
(by Cut-off Date Loan Group Balance) were 30-59 days delinquent (measured on a
contractual basis);
(xii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, for each Mortgage Loan, the related Mortgage File contains each
of the documents and instruments specified to be included therein;
(xiii) The related Mortgage Note and the related Mortgage at
origination complied in all material respects with applicable state and federal
laws, including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the Mortgage Loan;
(xiv) Either a lender's title insurance policy or binder was issued on
the date of origination of the Mortgage Loan and each such policy is valid and
remains in full force and effect, or a title search or guaranty of title
customary in the relevant jurisdiction was obtained with respect to a Mortgage
Loan as to which no title insurance policy or binder was issued;
(xv) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, none of the Mortgaged Properties is a mobile home or a
manufactured housing unit that is not considered or classified as part of the
real estate under the laws of the jurisdiction in which it is located;
(xvi) As of the Cut-off Date for the Mortgage Loans in Loan Group 1
and for the Mortgage Loans in Loan Group 2 no more than 0.36% and 0.94%,
respectively, of such Mortgage Loans, by aggregate principal balance, are
secured by Mortgaged Properties located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Mortgage Loan was not
in excess of 100%;
(xviii) No selection procedure reasonably believed by the Seller to be
adverse to the interests of the Certificateholders or the Credit Enhancer was
utilized in selecting the Mortgage Loans;
(xix) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
(xx) The Minimum Monthly Payment with respect to any Mortgage Loan is
not less than the interest accrued at the applicable Loan Rate on the average
daily Asset Balance during the interest period relating to the date on which
such Minimum Monthly Payment is due;
(xxi) Within 90 days of the Closing Date with respect to the Mortgage
Loans and, to the extent not already included in such filing with respect to
the Mortgage Loans, the applicable date of substitution with respect to any
Eligible Substitute Mortgage Loan, the Seller will file UCC-1 financing
statements with respect to the Mortgage Loans;
(xxii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, each Credit Line Agreement and each Mortgage Loan is an
enforceable obligation of the related Mortgagor, except as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, the Seller has not received a notice of default of any senior
mortgage loan related to a Mortgaged Property that has not been cured by a
party other than the Master Servicer;
(xxiv) The definition of "prime rate" in each Credit Line Agreement
relating to a Mortgage Loan does not differ materially from the definition in
the form of Credit Line Agreement in Exhibit D of the Pooling and Servicing
Agreement;
(xxv) The weighted average remaining term to maturity of the Mortgage
Loans in Loan Group 1 and the Mortgage Loans in Loan Group 2 on a contractual
basis as of the Cut-off Date for the Mortgage Loans is approximately 279 months
and 284 months, respectively. On each date that the Loan Rates have been
adjusted, interest rate adjustments on the Mortgage Loans were made in
compliance with the related Mortgage and Mortgage Note and applicable law. Over
the term of each Mortgage Loan, the Loan Rate may not exceed the related Loan
Rate Cap, if any. The Loan Rate Caps for the Mortgage Loans in Loan Group 1
range between 12.00% and 18.00% and the weighted average Loan Rate Cap for Loan
Group 1 is approximately 17.84%. The Loan Rate Caps for the Mortgage Loans in
Loan Group 2 range between 12.00% and 18.00% and the weighted average Loan Rate
Cap for Loan Group 2 is approximately 17.93%. The Gross Margins for the
Mortgage Loans in Loan Group 1 range between -1.75% and 7.63% and the weighted
average Gross Margin is approximately 2.33% as of the Cut-off Date for the
Mortgage Loans in Loan Group 1. The Gross Margins for the Mortgage Loans in
Loan Group 2 range between 0.00% and 7.25% and the weighted average Gross
Margin is approximately 2.26% as of the Cut-off Date for the Mortgage Loans in
Loan Group 2. The Loan Rates on the Mortgage Loans in Loan Group 1 range
between 5.88% and 13.70% and the weighted average Loan Rate on the Mortgage
Loans in Loan Group 1 is approximately 7.33%. The Loan Rates on the Mortgage
Loans in Loan Group 2 range between 5.85% and 13.5% and the weighted average
Loan Rate on the Mortgage Loans in Loan Group 2 is approximately 7.30%.
(xxvi) As of the Closing Date with respect to the Mortgage Loans and
the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, each Mortgaged Property consists of a single parcel of real
property with a one-to-four unit single family residence erected thereon, or an
individual condominium unit, planned unit development unit or townhouse;
(xxvii) No more than 18.79% (by Cut-off Date Loan Group Balance) of
the Mortgage Loans in Loan Group 1 and no more than 20.15% (by Cut-off Date
Loan Group Balance) of the Mortgage Loans in Loan Group 2 are secured by real
property improved by individual condominium units, units in planned unit
developments, townhouses or two-to-four family residences erected thereon, and
at least 81.21% (by Cut-off Date Loan Group Balance) of the Mortgage Loans in
Loan Group 1 and 79.85% (by Cut-off Date Loan Group Balance) of the Mortgage
Loans in Loan Group 2 are secured by real property with a detached one-family
residence erected thereon;
(xxviii) The Credit Limits on the Mortgage Loans in Loan Group 1 range
between approximately $7,000 and $700,000 with an average of approximately
$34,414.81. The Credit Limits on the Mortgage Loans in Loan Group 2 range
between approximately $7,300 and $800,000 with an average of approximately
$44,708.75. As of the Cut-off Date for the Mortgage Loans, no Mortgage Loan in
Loan Group 1 had a principal balance in excess of approximately $700,000 and no
Mortgage Loan in Loan Group 2 had a principal balance in excess of
approximately $800,000 and the average principal balance of the Mortgage Loans
in Loan Group 1 and Loan Group 2 is equal to approximately $22,785.53 and
$34,502.62, respectively;
(xxix) Approximately 2.78% and 97.22% of the Mortgage Loans in Loan
Group 1, by aggregate principal balance as of the Cut-off Date for the Mortgage
Loans, are first and second liens, respectively. Approximately 2.17% and 97.83%
of the Mortgage Loans in Loan Group 2, by aggregate principal balance as of the
Cut-off Date for the Mortgage Loans, are first and second liens, respectively;
and
(xxx) No more than approximately 2.38% of the Mortgage Loans in Loan
Group 1 and approximately 1.57% of the Mortgage Loans in Loan Group 2, each by
Cut-off Date Loan Group balance, were appraised electronically.
In the event of a breach of representation or warranty under the
Pooling and Servicing Agreement, and with respect to the representations and
warranties set forth in this Section 3.2 that are made to the best of the
Seller's knowledge or as to which the Seller has no knowledge, if it is
discovered by the Purchaser, the Seller, the Master Servicer, the Credit
Enhancer or a Responsible Officer of the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the interest of the Purchaser or its assignee in the related
Mortgage Loan then notwithstanding the Seller's lack of knowledge with respect
to the substance of such representation and warranty being inaccurate at the
time the representation or warranty was made, such inaccuracy shall be deemed a
breach of the applicable representation or warranty and with respect to any
breach of such representation or warranty or of any other representation or
warranty that materially and adversely affects the interest of the Purchaser or
its assignee in the related Mortgage Loan, the Seller shall cure, repurchase or
substitute in accordance with the Pooling and Servicing Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.2 shall survive the transfer and assignment of the
Mortgage Loans to the Purchaser. It is understood and agreed that the
obligation of the Seller to accept a transfer of a Mortgage Loan as to which a
breach has occurred and is continuing and has not been cured and to make any
required deposit in the Collection Account or to substitute an Eligible
Substitute Mortgage Loan, as the case may be, under Section 2.04 of the Pooling
and Servicing Agreement, shall constitute the sole remedy against the Seller
respecting such breach available to the Purchaser, Investor Certificateholders,
the Trustee on behalf of Investor Certificateholders and the Credit Enhancer.
The Purchaser acknowledges that the Seller, as Master Servicer, in its
sole discretion, shall have the right to purchase for its own account from the
Trust any Mortgage Loan which is 91 days or more delinquent at a price equal to
the purchase price described below. The price for any Mortgage Loan purchased
hereunder (which shall be calculated in the same manner set forth in Section
2.02 of the Pooling and Servicing Agreement) shall be deposited in the
Collection Account and the Trustee, upon receipt of a certificate from the
Master Servicer in the form of Exhibit G of the Pooling and Servicing
Agreement, shall release or cause to be released to the purchaser of such
Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such
Mortgage Loan, in each case without recourse, as shall be necessary to vest in
the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto
and the purchaser of such Mortgage Loan shall succeed to all the Trustee's
right, title and interest in and to such Mortgage Loan and all security and
documents related thereto. Such assignment shall be an assignment outright and
not for security. The purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation
to the Trustee, the Credit Enhancer or the Certificateholders with respect
thereto.
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to
exist any Lien on any Mortgage Loan, or any interest therein; the Seller will
notify the Trustee, as assignee of the Purchaser, of the existence of any Lien
on any Mortgage Loan immediately upon discovery thereof; and the Seller will
defend the right, title and interest of the Trustee, as assignee of the
Purchaser, in, to and under the Mortgage Loans, against all claims of third
parties claiming through or under the Seller; provided, however, that nothing
in this Section 4.1 shall prevent or be deemed to prohibit the Seller from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Seller shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with
respect thereto.
ARTICLE V
SERVICING
Section 5.1. Servicing. The Seller will be the Master Servicer of the
Mortgage Loans pursuant to the terms and conditions of the Pooling and
Servicing Agreement.
ARTICLE VI
TERMINATION
Section 6.1. Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate
upon the termination of the Trust as provided in Article X of the Pooling and
Servicing Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Amendment. This Agreement may be amended from time to
time by the Seller and the Purchaser, with the written consent of the Credit
Enhancer, by written agreement signed by the Seller and the Purchaser.
Section 7.2. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
Section 7.3. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid,
addressed as follows:
(i) if to the Seller:
Countrywide Home Loans, Inc.
4500 Park Granada
Calabasas, CA 91302
Attention: David Walker
or, such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
(ii) if to the Purchaser:
CWABS, Inc.
4500 Park Granada
Calabasas, CA 91302
Attention: David Walker
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
Section 7.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
Section 7.5. Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.6. Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents,
instruments or agreements as may be necessary or reasonable and appropriate to
effectuate the purposes of this Agreement or in connection with the issuance of
Investor Certificates representing interests in the Mortgage Loans.
Section 7.7. Successors and Assigns: Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser, the Trustee and the Credit Enhancer. The obligations of
the Seller under this Agreement cannot be assigned or delegated to a third
party without the consent of the Purchaser, except that the Purchaser
acknowledges and agrees that the Seller may assign its obligations hereunder to
any Person into which the Seller is merged or any corporation resulting from
any merger, conversion or consolidation to which the Seller is a party or any
Person succeeding to the business of the Seller. The parties hereto acknowledge
that the Purchaser is acquiring the Mortgage Loans for the purpose of
contributing them to a trust that will issue a series of Investor Certificates
representing undivided interests in such Mortgage Loans. As an inducement to
the Purchaser to purchase the Mortgage Loans, the Seller acknowledges and
consents to the assignment by the Purchaser to the Trustee of all of the
Purchaser's rights against the Seller pursuant to this Agreement insofar as
such rights relate to Mortgage Loans transferred to such Trustee and to the
enforcement or exercise of any right or remedy against the Seller pursuant to
this Agreement by the Trustee or the Credit Enhancer under the Pooling and
Servicing Agreement. Such enforcement of a right or remedy by the Trustee or
the Credit Enhancer shall have the same force and effect as if the right or
remedy had been enforced or exercised by the Purchaser directly.
Section 7.8. Survival. The representations and warranties set forth in
Article III shall survive the purchase of the Mortgage Loans hereunder.
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Purchase Agreement by their respective officers
thereunto duly authorized as of the day and year first above written.
CWABS, INC.,
as Purchaser
By:____________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By:____________________________________
Name:
Title:
<PAGE>
Schedule I
SCHEDULE OF
MORTGAGE LOANS
--------------
[Delivered to the Trustee only]
<PAGE>
STATE OF ______________)
) ss.:
COUNTY OF _____________)
On the ____ day of November 1999 before me, a Notary Public in and for
said State, personally appeared ______________, known to me to be a
_________________ of CWABS, Inc., the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said 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.
_________________________________
Notary Public
<PAGE>
STATE OF ______________)
) ss.:
COUNTY OF _____________)
On the ____ day of November 1999 before me, _______________ of
Countrywide Home Loans, Inc., personally appeared, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the 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.
_________________________________
Notary Public
