_______________________________________________________________________________
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) May 30, 2000
CWABS, INC. (as depositor under the Pooling and
Servicing Agreement, dated as of May 25, 2000,
providing for the issuance of the Countrywide Home Equity
Loan Trust 2000-B, Revolving Home Equity Loan Asset Backed
Certificates, Series 2000-B).
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
_______________________________________________________________________________
<PAGE>
Item 5. Other Events.
---- ------------
Description of the Certificates and the Mortgage Pool*
-----------------------------------------------------
On May 30, 2000, CWABS, Inc. (the "Company") entered into a Pooling and
Servicing Agreement dated as of May 25, 2000 (the "Pooling and Servicing
Agreement"), by and among the Company, as depositor, Countrywide Home Loans,
Inc. ("CHL"), as sponsor and as master servicer, The First National Bank of
Chicago, as trustee (the "Trustee") and Fannie Mae, providing for the issuance
of the Company's Revolving Home Equity Loan Asset Backed Certificates, Series
2000-B. 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 May 25, 2000 (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 February 18, 2000 and
the Prospectus Supplement dated May 22, 2000, of CWABS, Inc., relating to
its Asset- Backed Certificates, Series 2000-B.
<PAGE>
Mortgage Loan Statistics
The following tables describe characteristics of the mortgage loans
included in the trust fund as of the cut-off date (as defined in the
Prospectus). All percentages set forth below have been calculated based on the
principal balance of the Mortgage Loans as of the cut-off date. The sum of the
columns may not equal the respective totals due to rounding.
LOAN GROUP 1
Description
DESCRIPTION AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
10 Yr Draw, 10 Yr Repay $4,052,989 202 1.25
10 Yr Draw, 15 Yr Repay $309,389,623 12,944 95.59
15 Yr Draw, 0 Yr Repay $2,412,949 58 0.75
15 Yr Draw, 10 Yr Repay $1,379,058 38 0.43
3 Yr Draw, 10 Yr Repay $4,343,668 118 1.34
5 Yr Draw, 10 Yr Repay $1,839,497 44 0.57
5 Yr Draw, 5 Yr Repay $235,388 19 0.07
TOTAL $323,653,173 13,423 100.00
Principal Balances
RANGE OF PRINCIPAL AGGREGATE NUMBER OF PERCENTAGE OF
BALANCES UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
$ 0.00 to $ 10,000 $23,468,609 3,695 7.25
$ 10,000.01 to $ 20,000 $61,109,712 3,912 18.88
$ 20,000.01 to $ 30,000 $65,485,193 2,573 20.23
$ 30,000.01 to $ 40,000 $44,720,682 1,257 13.82
$ 40,000.01 to $ 50,000 $33,678,219 732 10.41
$ 50,000.01 to $ 60,000 $22,210,650 398 6.86
$ 60,000.01 to $ 70,000 $14,589,216 223 4.51
$ 70,000.01 to $ 80,000 $15,054,482 199 4.65
$ 80,000.01 to $ 90,000 $10,264,796 120 3.17
$ 90,000.01 to $100,000 $21,991,358 224 6.79
$100,000.01 to $125,000 $7,854,798 69 2.43
$125,000.01 to $150,000 $2,273,600 16 0.70
$150,000.01 to $175,000 $167,658 1 0.05
$175,000.01 to $200,000 $575,000 3 0.18
$200,000.01 to $225,000 $209,200 1 0.06
TOTAL $323,653,173 13,423 100.00
<PAGE>
Geographic Distribution
STATE AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
AK $1,183,991 47 0.37
AL $4,047,412 197 1.25
AZ $10,443,903 445 3.23
CA $88,426,882 2,776 27.32
CO $21,298,979 787 6.58
CT $1,993,606 91 0.62
DC $392,018 14 0.12
DE $547,790 27 0.17
FL $11,808,792 562 3.65
GA $7,631,034 344 2.36
HI $2,666,236 77 0.82
IA $648,567 36 0.20
ID $2,798,483 153 0.86
IL $13,722,656 601 4.24
IN $3,897,584 219 1.20
KS $3,755,410 192 1.16
KY $2,074,773 110 0.64
LA $2,711,505 135 0.84
MA $9,755,584 410 3.01
MD $4,311,037 200 1.33
ME $756,935 38 0.23
MI $24,231,095 1,097 7.49
MN $3,058,660 161 0.95
MO $5,090,096 242 1.57
MS $847,531 45 0.26
MT $1,887,369 102 0.58
NC $5,206,916 302 1.61
ND $139,189 7 0.04
NE $1,009,197 66 0.31
NH $1,882,424 96 0.58
NJ $11,078,756 444 3.42
NM $2,365,683 107 0.73
NV $4,046,989 167 1.25
NY $7,573,949 306 2.34
OH $8,859,932 455 2.74
OK $3,512,316 177 1.09
OR $6,058,817 265 1.87
PA $7,266,412 367 2.25
RI $513,868 28 0.16
SC $1,937,577 103 0.60
SD $99,416 8 0.03
TN $4,052,989 202 1.25
UT $4,815,881 222 1.49
VA $4,964,067 237 1.53
VT $187,914 10 0.06
WA $13,049,658 500 4.03
WI $3,384,936 167 1.05
WV $235,388 19 0.07
WY $1,422,969 60 0.44
TOTAL $323,653,173 13,423 100.00
<PAGE>
Combined Loan-to-Value Ratio
RANGE OF COMBINED AGGREGATE NUMBER OF PERCENTAGE OF
LOAN-TO-VALUE UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
RATIOS PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
<=10.00 $343,489 17 0.11
10.01-20.00 $1,838,468 72 0.57
20.01-30.00 $2,710,813 105 0.84
30.01-40.00 $4,987,175 188 1.54
40.01-50.00 $8,719,069 349 2.69
50.01-60.00 $15,573,835 630 4.81
60.01-70.00 $39,287,036 1,770 12.14
70.01-80.00 $63,948,976 2,710 19.76
80.01-90.00 $105,578,566 4,461 32.62
90.01-100.00 $80,665,745 3,121 24.92
TOTAL $323,653,173 13,423 100.00
Loan Rates
RANGE OF AGGREGATE NUMBER OF PERCENTAGE OF
LOAN RATES UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
5.501 - 6.000 $7,114,600 197 2.20
6.501 - 7.000 $2,628,001 60 0.81
7.001 - 7.500 $33,647,615 1,503 10.40
7.501 - 8.000 $258,317,700 10,968 79.81
8.001 - 8.500 $523,142 15 0.16
8.501 - 9.000 $10,000 3 0.00
9.001 - 9.500 $850,364 30 0.26
9.501 - 10.000 $3,527,680 92 1.09
10.001 - 10.500 $3,744,150 118 1.16
10.501 - 11.000 $3,321,479 102 1.03
11.001 - 11.500 $2,972,532 92 0.92
11.501 - 12.000 $2,947,003 101 0.91
12.001 - 12.500 $2,817,163 96 0.87
12.501 - 13.000 $999,625 34 0.31
13.001 - 13.500 $216,192 11 0.07
13.501 - 14.000 $15,928 1 0.00
TOTAL $323,653,173 13,423 100.00
Property Type
PROPERTY AGGREGATE NUMBER OF PERCENTAGE OF
TYPE UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
SINGLE FAMILY $255,551,381 10,812 78.96
PUD $47,949,209 1,781 14.81
CONDO $17,634,002 737 5.45
2-4 UNITS $2,518,580 93 0.78
TOTAL $323,653,173 13,423 100.00
Lien Priority
LIEN AGGREGATE NUMBER OF PERCENTAGE OF
PRIORITY UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
1st Liens $10,982,316 245 3.39
2nd Liens $312,670,857 13,178 96.61
TOTAL $323,653,173 13,423 100.00
Margins
RANGE OF AGGREGATE NUMBER OF PERCENTAGE OF
MARGINS UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
0.000 $14,903,726 567 4.60
0.001 - 0.250 $4,034,005 134 1.25
0.251 - 0.500 $21,896,506 663 6.77
0.501 - 0.750 $27,314,758 1,394 8.44
0.751 - 1.000 $16,915,396 628 5.23
1.001 - 1.250 $39,455,594 1,820 12.19
1.251 - 1.500 $4,417,313 188 1.36
1.501 - 1.750 $6,090,111 191 1.88
1.751 - 2.000 $37,749,492 1,701 11.66
2.001 - 2.250 $9,801,731 407 3.03
2.251 - 2.500 $20,672,511 648 6.39
2.501 - 2.750 $18,316,349 852 5.66
2.751 - 3.000 $24,966,155 987 7.71
3.001 - 3.250 $19,952,407 881 6.16
3.251 - 3.500 $21,495,351 763 6.64
3.501 - 3.750 $16,185,107 725 5.00
3.751 - 4.000 $2,046,825 126 0.63
4.001 - 4.250 $13,211,905 553 4.08
4.251 - 4.500 $3,765,303 181 1.16
4.501 - 4.750 $120,462 4 0.04
4.751 - 5.000 $197,974 5 0.06
5.251 - 5.500 $35,000 1 0.01
5.751 - 6.000 $39,200 3 0.01
6.751 - 7.000 $69,990 1 0.02
TOTAL $323,653,173 13,423 100.00
<PAGE>
Credit Limit Utilization Rates
RANGE OF CREDIT AGGREGATE NUMBER OF PERCENTAGE OF
LIMIT UTILIZATION RATES UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
0.00% $0 712 0.00
0.01% - 10.00% $774,566 202 0.24
10.01% - 20.00% $3,569,486 395 1.10
20.01% - 30.00% $6,199,963 592 1.92
30.01% - 40.00% $8,424,429 682 2.60
40.01% - 50.00% $13,879,631 1,065 4.29
50.01% - 60.00% $13,432,735 775 4.15
60.01% - 70.00% $19,843,817 964 6.13
70.01% - 80.00% $22,184,425 918 6.85
80.01% - 90.00% $20,974,791 709 6.48
90.01% - 100.00% $214,369,329 6,409 66.23
TOTAL $323,653,173 13,423 100.00
Maximum Rates
MAXIMUM RATES AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
11.750 $2,387 1 0.00
12.500 $69,873 4 0.02
12.750 $1,650,886 89 0.51
13.000 $2,227,629 104 0.69
13.500 $13,500 1 0.00
15.000 $1,679,380 94 0.52
16.000 $5,322,816 304 1.64
17.000 $13,023,791 589 4.02
18.000 $299,409,509 12,232 92.51
24.000 $163,150 2 0.05
25.000 $43,600 1 0.01
25.500 $36,650 1 0.01
26.000 $10,000 1 0.00
TOTAL $323,653,173 13,423 100.00
Months Remaining to Scheduled Maturity
RANGE OF MONTHS AGGREGATE NUMBER OF PERCENTAGE OF
REMAINING TO UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
SCHEDULED MATURITY PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
109 - 120 $235,388 19 0.07
145 - 156 $4,343,668 118 1.34
169 - 180 $4,252,446 102 1.31
229 - 240 $4,052,989 202 1.25
289 - 300 $303,133,792 12,613 93.66
301 - 312 $7,634,889 369 2.36
TOTAL $323,653,173 13,423 100.00
<PAGE>
Origination Year
ORIGINATION YEAR AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
1999 $59,043 3 0.02
2000 $323,594,130 13,420 99.98
TOTAL $323,653,173 13,423 100.00
Delinquency Status
NUMBER OF DAYS AGGREGATE NUMBER OF PERCENTAGE OF
DELINQUENT UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
CURRENT $309,157,700 12,906 95.52
30-59 Days $14,495,473 517 4.48
TOTAL $323,653,173 13,423 100.00
Credit Limits
RANGE OF CREDIT AGGREGATE NUMBER OF PERCENTAGE OF
LIMITS UNPAID MORTGAGE LOAN GROUP 1 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
$ 0.00 to $ 10,000 $2,511,787 354 0.78
$ 10,000.01 to $ 20,000 $51,185,428 4,293 15.81
$ 20,000.01 to $ 30,000 $66,822,332 3,572 20.65
$ 30,000.01 to $ 40,000 $47,328,400 1,769 14.62
$ 40,000.01 to $ 50,000 $38,725,957 1,246 11.97
$ 50,000.01 to $ 60,000 $25,375,296 612 7.84
$ 60,000.01 to $ 70,000 $16,843,402 371 5.20
$ 70,000.01 to $ 80,000 $15,849,710 315 4.90
$ 80,000.01 to $ 90,000 $11,484,578 198 3.55
$ 90,000.01 to $100,000 $33,390,876 534 10.32
$100,000.01 to $125,000 $9,212,563 110 2.85
$125,000.01 to $150,000 $3,560,610 36 1.10
$150,000.01 to $175,000 $243,224 5 0.08
$175,000.01 to $200,000 $842,658 5 0.26
$200,000.01 to $225,000 $254,353 2 0.08
$275,000.01 to $300,000 $22,000 1 0.01
TOTAL $323,653,173 13,423 100.00
<PAGE>
LOAN GROUP 2
Description
DESCRIPTION AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
10 Yr Draw, 10 Yr Repay $487,108 10 0.30
10 Yr Draw, 15 Yr Repay $159,355,383 3,647 98.15
15 Yr Draw, 0 Yr Repay $662,017 10 0.41
15 Yr Draw, 10 Yr Repay $818,733 8 0.50
3 Yr Draw, 10 Yr Repay $862,191 13 0.53
5 Yr Draw, 10 Yr Repay $144,600 3 0.09
5 Yr Draw, 5 Yr Repay $35,000 1 0.02
TOTAL $162,365,031 3,692 100.00
Principal Balances
RANGE OF PRINCIPAL AGGREGATE NUMBER OF PERCENTAGE OF
BALANCES UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
$ 0.00 to $ 10,000 $4,494,417 679 2.77
$ 10,000.01 to $ 20,000 $13,968,908 909 8.60
$ 20,000.01 to $ 30,000 $16,202,194 631 9.98
$ 30,000.01 to $ 40,000 $12,672,466 357 7.80
$ 40,000.01 to $ 50,000 $11,711,174 255 7.21
$ 50,000.01 to $ 60,000 $8,988,051 162 5.54
$ 60,000.01 to $ 70,000 $6,680,851 102 4.11
$ 70,000.01 to $ 80,000 $5,463,227 72 3.36
$ 80,000.01 to $ 90,000 $5,688,831 66 3.50
$ 90,000.01 to $100,000 $11,052,891 113 6.81
$100,000.01 to $125,000 $6,500,426 58 4.00
$125,000.01 to $150,000 $19,115,579 134 11.77
$150,000.01 to $175,000 $4,304,573 26 2.65
$175,000.01 to $200,000 $7,930,946 41 4.88
$200,000.01 to $225,000 $3,474,202 16 2.14
$225,000.01 to $250,000 $5,590,336 23 3.44
$250,000.01 to $275,000 $2,132,350 8 1.31
$275,000.01 to $300,000 $4,394,745 15 2.71
$300,000.01 to $325,000 $645,000 2 0.40
$325,000.01 to $350,000 $1,359,235 4 0.84
$350,000.01 to $375,000 $722,500 2 0.44
$375,000.01 to $400,000 $1,186,014 3 0.73
$400,000.01 to $425,000 $812,000 2 0.50
$450,000.01 to $475,000 $942,205 2 0.58
$475,000.01 to $500,000 $2,480,000 5 1.53
$575,000.01 to $600,000 $600,000 1 0.37
$675,000.01 to $700,000 $700,000 1 0.43
$725,000.01 to $750,000 $750,000 1 0.46
$800,000.01 to $825,000 $801,911 1 0.49
$825,000.01 to $1,000,000 $1,000,000 1 0.62
TOTAL $162,365,031 3,692 100.00
<PAGE>
Geographic Distribution
STATE AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
AK $216,900 6 0.13
AL $1,188,104 56 0.73
AZ $5,280,079 129 3.25
CA $70,009,628 981 43.12
CO $10,804,346 207 6.65
CT $1,209,386 23 0.74
DC $67,500 3 0.04
DE $231,063 5 0.14
FL $5,035,676 199 3.10
GA $3,625,330 108 2.23
HI $616,789 17 0.38
IA $310,550 9 0.19
ID $1,262,762 36 0.78
IL $5,277,120 144 3.25
IN $1,223,127 57 0.75
KS $1,533,133 53 0.94
KY $831,164 36 0.51
LA $848,434 29 0.52
MA $4,513,977 99 2.78
MD $1,272,602 42 0.78
ME $228,205 10 0.14
MI $6,718,109 219 4.14
MN $786,111 26 0.48
MO $1,884,876 70 1.16
MS $334,132 12 0.21
MT $261,426 14 0.16
NC $2,172,452 81 1.34
NE $292,357 17 0.18
NH $611,890 17 0.38
NJ $4,983,310 115 3.07
NM $694,719 29 0.43
NV $993,999 40 0.61
NY $2,976,523 83 1.83
OH $3,298,201 126 2.03
OK $1,163,271 61 0.72
OR $1,959,594 53 1.21
PA $2,239,725 86 1.38
RI $173,211 7 0.11
SC $815,995 22 0.50
SD $8,000 1 0.00
TN $487,108 10 0.30
TX $747,595 25 0.46
UT $2,080,440 61 1.28
VA $1,768,762 72 1.09
VT $62,209 5 0.04
WA $8,070,524 151 4.97
WI $585,938 26 0.36
WV $49,898 2 0.03
WY $558,781 12 0.34
TOTAL $162,365,031 3,692 100.00
<PAGE>
Combined Loan-to-Value Ratio
RANGE OF COMBINED AGGREGATE NUMBER OF PERCENTAGE OF
LOAN-TO-VALUE RATIOS UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
<=10.00 $7,500 2 0.00
10.01-20.00 $1,101,718 10 0.68
20.01-30.00 $1,431,786 16 0.88
30.01-40.00 $2,546,505 28 1.57
40.01-50.00 $6,577,732 45 4.05
50.01-60.00 $6,222,908 84 3.83
60.01-70.00 $18,087,439 339 11.14
70.01-80.00 $36,776,418 503 22.65
80.01-90.00 $46,465,566 1,214 28.62
90.01-100.00 $43,147,458 1,451 26.57
TOTAL $162,365,031 3,692 100.00
Loan Rates
RANGE OF LOAN AGGREGATE NUMBER OF PERCENTAGE OF
RATES UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
5.501 - 6.000 $3,373,900 38 2.08
6.501 - 7.000 $1,062,691 15 0.65
7.001 - 7.500 $13,793,457 387 8.50
7.501 - 8.000 $131,014,661 2,945 80.69
8.001 - 8.500 $105,635 4 0.07
8.501 - 9.000 $192,000 1 0.12
9.001 - 9.500 $1,875,700 12 1.16
9.501 - 10.000 $1,986,333 18 1.22
10.001 - 10.500 $884,651 22 0.54
10.501 - 11.000 $1,603,669 35 0.99
11.001 - 11.500 $1,921,313 63 1.18
11.501 - 12.000 $2,241,168 73 1.38
12.001 - 12.500 $1,558,369 45 0.96
12.501 - 13.000 $358,042 19 0.22
13.001 - 13.500 $148,527 8 0.09
13.501 - 14.000 $53,700 2 0.03
14.001 - 14.500 $191,216 5 0.12
TOTAL $162,365,031 3,692 100.00
Property Type
PROPERTY TYPE AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
SINGLE FAMILY $127,325,499 2,918 78.42
PUD $27,832,730 563 17.14
CONDO $5,400,954 166 3.33
2-4 UNITS $1,805,848 45 1.11
$162,365,031 3,692 100.00
Lien Priority
LIEN PRIOROTY AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
1st Liens $5,800,876 48 3.57
2nd Liens $156,564,155 3,644 96.43
TOTAL $162,365,031 3,692 100.00
Margins
RANGE OF MARGINS AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
-2.000 - -1.000 $90,000 1 0.06
0.000 $18,118,733 144 11.16
0.001 - 0.250 $2,915,107 28 1.80
0.251 - 0.500 $21,344,696 183 13.15
0.501 - 0.750 $6,855,386 120 4.22
0.751 - 1.000 $6,353,088 84 3.91
1.001 - 1.250 $12,681,552 170 7.81
1.251 - 1.500 $597,100 17 0.37
1.501 - 1.750 $1,757,341 49 1.08
1.751 - 2.000 $13,678,941 305 8.42
2.001 - 2.250 $8,173,687 232 5.03
2.251 - 2.500 $13,750,063 364 8.47
2.501 - 2.750 $10,416,479 402 6.42
2.751 - 3.000 $11,294,172 335 6.96
3.001 - 3.250 $2,520,604 59 1.55
3.251 - 3.500 $3,776,082 101 2.33
3.501 - 3.750 $3,983,864 116 2.45
3.751 - 4.000 $306,657 15 0.19
4.001 - 4.250 $2,495,799 86 1.54
4.251 - 4.500 $10,696,401 352 6.59
4.501 - 4.750 $367,129 16 0.23
4.751 - 5.000 $1,004,897 81 0.62
5.001 - 5.250 $6,783,412 297 4.18
5.251 - 5.500 $1,169,561 43 0.72
5.751 - 6.000 $547,320 52 0.34
6.001 - 6.250 $171,529 16 0.11
6.751 - 7.000 $18,450 2 0.01
7.001 - 7.250 $95,922 2 0.06
7.501 - 7.750 $179,755 10 0.11
7.751 - 8.000 $153,807 7 0.09
8.251 - 8.500 $10,000 1 0.01
8.501 - 8.750 $57,500 2 0.04
TOTAL $162,365,031 3,692 100.00
<PAGE>
Credit Limit Utilization Rates
RANGE OF CREDIT LIMIT AGGREGATE NUMBER OF PERCENTAGE OF
UTILIZATION RATES UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
0.00% $0 113 0.00
0.01% - 10.00% $362,637 58 0.22
10.01% - 20.00% $1,406,546 83 0.87
20.01% - 30.00% $1,817,860 107 1.12
30.01% - 40.00% $3,147,435 145 1.94
40.01% - 50.00% $4,826,920 196 2.97
50.01% - 60.00% $4,416,047 161 2.72
60.01% - 70.00% $6,666,826 217 4.11
70.01% - 80.00% $7,525,419 218 4.63
80.01% - 90.00% $9,337,108 183 5.75
90.01% - 100.00% $122,858,232 2,211 75.67
TOTAL $162,365,031 3,692 100.00
Maximum Rates
MAXIMUM RATES AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
12.750 $215,058 5 0.13
13.000 $214,250 4 0.13
13.500 $57,800 1 0.04
15.000 $261,426 14 0.16
16.000 $2,211,152 83 1.36
17.000 $6,482,096 231 3.99
18.000 $152,923,249 3,354 94.18
TOTAL $162,365,031 3,692 100.00
Months Remaining to Scheduled Maturity
RANGE OF MONTHS AGGREGATE NUMBER OF PERCENTAGE OF
REMAINING TO UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
SCHEDULED MATURITY PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
109 - 120 $35,000 1 0.02
145 - 156 $862,191 13 0.53
169 - 180 $806,617 13 0.50
229 - 240 $487,108 10 0.30
289 - 300 $157,205,382 3,576 96.82
301 - 312 $2,968,733 79 1.83
TOTAL $162,365,031 3,692 100.00
<PAGE>
Origination Year
ORIGINATION YEAR AGGREGATE NUMBER OF PERCENTAGE OF
UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
2000 $162,365,031 3,692 100.00
TOTAL $162,365,031 3,692 100.00
Delinquency Status
NUMBER OF DAYS AGGREGATE NUMBER OF PERCENTAGE OF
DELINQUENT UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
CURRENT $155,620,005 3,536 95.85
30 - 59 DAYS $6,745,026 156 4.15
TOTAL $162,365,031 3,692 100.00
Credit Limits
RANGE OF CREDIT AGGREGATE NUMBER OF PERCENTAGE OF
LIMITS UNPAID MORTGAGE LOAN GROUP 2 AGGREGATE
PRINCIPAL LOANS PRINCIPAL BALANCE
BALANCE
$ 0.00 to $ 10,000 $697,639 88 0.43
$ 10,000.01 to $ 20,000 $12,277,675 966 7.56
$ 20,000.01 to $ 30,000 $15,627,578 771 9.62
$ 30,000.01 to $ 40,000 $11,863,123 404 7.31
$ 40,000.01 to $ 50,000 $11,322,075 319 6.97
$ 50,000.01 to $ 60,000 $8,644,310 185 5.32
$ 60,000.01 to $ 70,000 $6,722,242 124 4.14
$ 70,000.01 to $ 80,000 $5,690,775 102 3.50
$ 80,000.01 to $ 90,000 $5,254,512 75 3.24
$ 90,000.01 to $100,000 $12,424,228 172 7.65
$100,000.01 to $125,000 $4,182,361 43 2.58
$125,000.01 to $150,000 $22,271,506 198 13.72
$150,000.01 to $175,000 $5,277,780 44 3.25
$175,000.01 to $200,000 $7,861,533 65 4.84
$200,000.01 to $225,000 $3,266,410 19 2.01
$225,000.01 to $250,000 $6,717,486 33 4.14
$250,000.01 to $275,000 $2,206,848 12 1.36
$275,000.01 to $300,000 $5,656,796 28 3.48
$300,000.01 to $325,000 $920,000 3 0.57
$325,000.01 to $350,000 $2,410,770 11 1.48
$350,000.01 to $375,000 $352,500 1 0.22
$375,000.01 to $400,000 $1,216,014 5 0.75
$400,000.01 to $425,000 $892,000 4 0.55
$450,000.01 to $475,000 $942,205 2 0.58
$475,000.01 to $500,000 $3,444,755 12 2.12
$575,000.01 to $600,000 $600,000 1 0.37
$675,000.01 to $700,000 $700,000 1 0.43
$725,000.01 to $750,000 $1,120,000 2 0.69
$975,000.01 to $1,000,000 $1,801,911 2 1.11
TOTAL $162,365,031 3,692 100.00
<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 May 25, 2000,
by and among the Company, CHL, the Trustee and Fannie Mae.
99.2. The Purchase Agreement, dated as of May 25, 2000, 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/ Michael Muir
--------------------------
Michael Muir
Vice President
Dated: June 14, 2000
<PAGE>
Exhibit Index
Exhibit
99.1. Pooling and Servicing Agreement, dated as of May 25, 2000, by and
among, the Company, CHL, the Trustee and Fannie Mae.
99.2. Purchase Agreement, dated as of May 25, 2000, between the Company and
CHL.
<PAGE>
EXHIBIT 99.1
==============================================================================
CWABS, INC.,
as Depositor,
COUNTRYWIDE HOME LOANS, INC.,
as Sponsor and Master Servicer,
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
and
FANNIE MAE
-----------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 25, 2000
----------------------
Revolving Home Equity Loan Asset Backed Certificates
Series 2000-B
==============================================================================
<PAGE>
Table of Contents
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions...................................................I-1
Section 1.02. Interest Calculations........................................I-24
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-5
Section 2.03. Representations and Warranties Regarding the
Master Servicer..............................................II-8
Section 2.04. Representations and Warranties of the Sponsor
Regarding the Mortgage Loans; Retransfer of
Certain Mortgage Loans......................................II-10
Section 2.05. Covenants of the Depositor..................................II-17
Section 2.06. Transfers of Mortgage Loans at Election of
Transferor..................................................II-17
Section 2.07. Execution and Authentication of Certificates................II-19
Section 2.08. Tax Treatment...............................................II-19
Section 2.09. Representations and Warranties of the Depositor.............II-20
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-3
Section 3.03. Withdrawals from the Collection Account and the
Additional Loan Accounts....................................III-5
Section 3.04. Maintenance of Hazard Insurance; Property
Protection Expenses.........................................III-8
Section 3.05. Assumption and Modification Agreements......................III-8
Section 3.06. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans........................III-9
Section 3.07. Trustee to Cooperate.......................................III-10
Section 3.08. Servicing Compensation; Payment of Certain
Expenses by Master Servicer................................III-11
Section 3.09. Annual Statement as to Compliance..........................III-11
Section 3.10. Annual Servicing Report....................................III-12
Section 3.11. Access to Certain Documentation and Information
Regarding the Mortgage Loans...............................III-12
Section 3.12. Maintenance of Certain Servicing Insurance Policies........III-12
Section 3.13. Reports to the Securities and Exchange Commission..........III-13
Section 3.14. Tax Returns................................................III-13
Section 3.15. Information Required by the Internal Revenue
Service Generally and Reports of Foreclosures
and Abandonments of Mortgaged Property.....................III-13
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-6
Section 4.04. Effect of Payments by the Credit Enhancer;
Subrogation..................................................IV-7
Section 4.05. Optional Advances of the Master Servicer.....................IV-7
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-6
Section 5.03. Statements to Certificateholders..............................V-6
Section 5.04. Rights of Certificateholders..................................V-8
Section 5.05. Fannie Mae Guaranty...........................................V-8
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-4
Section 6.05. Restrictions on Transfer of Transferor Certificates..........VI-4
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-3
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-3
Section 8.03. Notification to Certificateholders.........................VIII-4
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-4
Section 9.04. Trustee May Own Certificates.................................IX-5
Section 9.05. Master Servicer to Pay Trustee's Fees and
Expenses; Master Servicer to Indemnify.......................IX-5
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-7
Section 9.10. Appointment of Co-Trustee or Separate Trustee................IX-7
Section 9.11. Limitation of Liability......................................IX-8
Section 9.12. Trustee May Enforce Claims Without Possession
of Certificates..............................................IX-9
Section 9.13. Suits for Enforcement........................................IX-9
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-4
Section 12.05. Notices....................................................XII-4
Section 12.06. Severability of Provisions.................................XII-5
Section 12.07. Assignment.................................................XII-5
Section 12.08. Certificates Nonassessable and Fully Paid..................XII-5
Section 12.09. Third-Party Beneficiaries..................................XII-5
Section 12.10. Counterparts...............................................XII-5
Section 12.11. Effect of Headings and Table of Contents...................XII-5
EXHIBIT A - FORM OF INVESTOR CERTIFICATE....................................A-1
EXHIBIT B - FORM OF TRANSFEROR CERTIFICATE..................................B-1
EXHIBIT C - MORTGAGE LOAN SCHEDULE..........................................C-1
EXHIBIT D - FORM OF CREDIT LINE AGREEMENT...................................D-1
EXHIBIT E - LETTER OF REPRESENTATIONS.......................................E-1
EXHIBIT F - FORM OF INVESTMENT LETTER.......................................F-1
EXHIBIT G - FORM OF REQUEST FOR RELEASE.....................................G-1
EXHIBIT H-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
EXHIBIT J - FORM OF TRANSFER DOCUMENT.......................................J-1
<PAGE>
This Pooling and Servicing Agreement, dated as of May 25, 2000, 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), Bank One, National Association, as Trustee (the
"Trustee"), and Fannie Mae,
WITNESSETH THAT:
---------------
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 Transferor
Subordinated 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.
Additional Home Equity Loans: The Mortgage Loans funded after the Cut-off
Date acquired by the Trust on a Subsequent Closing Date pursuant to Section
2.01(b).
Additional Loan Accounts: For Loan Group 1, an account into which is
deposited on the Closing Date $41,350,000, and for Loan Group 2, an account
into which is deposited on the Closing Date $22,640,000. Each of the accounts
will be maintained separately, will be Eligible Accounts, and will be
available only for purchases of Additional Home Equity Loans for its related
Loan Group.
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 related 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). As of the Closing Date, the Class A-2 Investor
Certificates will be Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the 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, 6.69125%, 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) 0.08%, (ii) the Maximum Rate for the Class A-1
Investor Certificates for such Interest Period and (iii) 16.00%.
Class A-2 Investor Certificate Rate: A per annum rate equal to, with
respect to the first Interest Period, 6.84125%, 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) 0.23%, (ii) the Maximum Rate for the Class A-2
Investor Certificates for such Interest Period and (iii) 16.00%.
Closing Date: May 30, 2000.
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, the Credit
Enhancer and Fannie Mae 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 the Cut-off Date
through June 30, 2000).
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 (A) the amount to be distributed on such Class
of Investor Certificates pursuant to Section 5.01(a)(iii) exceeds
(B) the sum of the following amounts, but in each case only to the
extent such amounts will be available to be applied to make payments
on such Class pursuant to Section 5.01(a)(iii):
(i) the amount of Investor Interest Collections related to such
Class on deposit in the Collection Account as of the close of
business on the third Business Day preceding such Distribution
Date,
(ii) the funds, if any, to be deposited into the Collection Account
as a single deposit on the Business Day preceding such
Distribution Date in accordance with Section 3.02(b), as such
amount is reported by the Master Servicer to the Insurer in the
Servicing Certificate delivered on the preceding Determination
Date,
(iii) the amount, if any, on deposit in the Collection Account in
respect of the related Loan Group for such Distribution Date as
of the close of business on the preceding Determination Date in
respect of optional advances by the Master Servicer made
pursuant to Section 4.05,
(iv) the amount, if any, of the related Subordinated Transferor
Collections in respect of the related Loan Group on deposit in
the Collection Account on the third Business Day preceding such
Distribution Date,
(v) any Crossover Amounts for such Distribution Date and Class
(payable from the other Loan Group) on deposit in the
Collection Account on the third Business Day preceding such
Distribution Date, and
(vi) any withdrawals from the Reserve Fund for such Distribution
Date, plus
(y) the related Guaranteed Principal Distribution Amount, plus
(z) any Preference Amount (as defined in the Policy) related to such
Class to be paid pursuant to the terms of the Policy on such
Distribution Date.
Credit Enhancer: Financial Guaranty Insurance Company, a New York stock
insurance corporation, any successor thereto or any replacement credit
enhancer substituted pursuant to Section 4.03.
Credit Enhancer Condition: A Credit Enhancer Condition shall exist during
the period immediately following a Credit Enhancer Default and ending with the
assumption by a replacement credit enhancer of its duties in connection with a
replacement credit enhancement 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)(ix) and 5.01(c)(ii).
Cumulative Loss Test Violation: As defined in the Insurance Agreement,
and that definition shall remain in effect notwithstanding the existence of a
Credit Enhancer Condition.
Cut-off Date: May 25, 2000.
Cut-off Date Asset Balance: For any Initial Mortgage Loan, its unpaid
principal balance as of the Cut-off Date, and for any Additional Home Equity
Loan, its unpaid principal balance as of the relevant Subsequent 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.
Defective Mortgage Loan: A Mortgage Loan subject to retransfer pursuant
to Section 2.02 or 2.04.
Deficiency Notice: As defined in Section 4.02(a).
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 $185,000,000
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 fifth
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 July 17, 2000.
Draw: With respect to any Mortgage Loan, an additional borrowing by the
Mortgagor subsequent to the Cut-off Date or Subsequent Cut-Off-Date, as
applicable, 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 (or if a Credit
Enhancer Condition is then existing, to Fannie Mae in lieu of 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 or the Fannie Mae Guaranty and (b) from the Credit Enhancer (or if a
Credit Enhancer Condition is then existing, from Fannie Mae in lieu of 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 or the Fannie Mae Guaranty; (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 or the Fannie Mae Guaranty;
(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 or the Fannie Mae Guaranty; (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 or the Fannie Mae Guaranty;
(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 or the Fannie
Mae Guaranty; (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 or the Fannie Mae Guaranty, 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 or the Fannie Mae Guaranty; (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 or the
Fannie Mae Guaranty; 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 or the Fannie Mae Guaranty, 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) in the case of a Mortgage Loan included in Loan Group 1,
have an outstanding Asset Balance that complies with applicable Fannie Mae
conforming loan balance requirements, (ii) 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; (iii) 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; (iv) 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; (v) 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;
(vi) 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; (vii) 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; (viii) comply with each
representation and warranty set forth in Section 2.04 (deemed to be made as of
the date of substitution); and (ix) 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 (or if the Defective Mortgage Loan is in Loan Group 1 and
a Credit Enhancer Condition is then existing, by Fannie Mae in lieu of the
Credit Enhancer).
ERISA: Employee Retirement Income Security Act of 1974, as amended.
Event of Servicing Termination: As defined in Section 8.01.
Fannie Mae Guaranty: The obligation of Fannie Mae specified in Section
5.05.
Fannie Mae Guaranty Fee: For any Distribution Date, an amount equal to
the product of (x) the Investor Certificate Principal Balance of the Class A-1
Investor Certificates (after giving effect to the distributions on the
applicable Distribution Date) multiplied by (y) 1/12 of the Fannie Mae
Guaranty Fee Rate.
Fannie Mae Guaranty Fee Rate: The per annum rate specified in the Side
Letter Agreement.
Fannie Mae Guaranty Payment Amount: For any Distribution Date, the
excess, if any, of (x) the portion of any Credit Enhancement Draw Amount
distributable to Holders of the Class A-1 Investor Certificates on that date
over (y) the amount available on deposit in the Policy Payments Account at
12:00 NOON on that date for distribution to Holders of the Class A-1 Investor
Certificates as determined by the Trustee in accordance with Section 4.03.
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 August 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 August 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.
Initial Mortgage File: For each of the Mortgage Loans the following
documents:
(i) the original Mortgage Note endorsed in blank or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original lost
note affidavit from the Sponsor stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the related Mortgage
Note;
(ii) unless the Mortgage Loan is registered on the MERS(R)System, an
original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage, noting the presence of the MIN of
the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan
if the Mortgage Loan is a MOM Loan, 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 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, with
evidence of recording thereon, 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 (or if a Credit Enhancer Condition is then
existing, to Fannie Mae in lieu of the Credit Enhancer), (x) an optical image
or other representation of the related documents specified in clauses (iii)
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 or the
Fannie Mae Guaranty, such optical image or other representation of a document
specified in clauses (iii) through (vii) above may be held by the Trustee or
assignee in lieu of the physical documents specified above. A copy of any such
Opinion of Counsel shall in each case be addressed and delivered to Fannie Mae
and the Credit Enhancer.
Initial Mortgage Loans: The Mortgage Loans acquired by the Trust on the
Closing Date.
Insurance Agreement: The insurance and indemnity agreement dated as of
May 30, 2000 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 under the Policy or Fannie Mae under the Fannie Mae Guaranty)
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 Investor Certificate Rate and Class A-2 Investor 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: For any Mortgage Loan, each of the intervening
assignments needed for a complete chain of title for the Mortgage Loan from
the Originator to the Depositor or, if the Mortgage Loan is registered on the
MERS(R) System, to MERS and noting the presence of a MIN.
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 (including amounts treated as Investor
Principal Collections pursuant to Section 3.03 (d)) 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 before the
Distribution Date.
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 Transferor 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, plus
the amount of funds in the related Additional Loan Account 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, plus
the amount of funds in the related Additional Loan Account.
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, whether paid by the Credit
Enhancer or Fannie Mae.
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 the
Rapid Amortization Commencement Date.
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).
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor to it.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R)System.
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.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of the Mortgage Loan and its successors
and assigns.
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 Initial Mortgage File 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(a) and (b), 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 account number, (ii) the Credit Limit, (iii) the Gross Margin, (iv)
the Lifetime Rate Cap, (v) the Cut-off Date Asset Balance, (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, (x) a code
specifying lien position, and (xi) a code specifying whether the Mortgage Loan
is a MOM Loan. The Depositor shall deliver to the Trustee an updated Mortgage
Loan Schedule within 15 days after each Subsequent Closing Date that includes
all of the Mortgage Loans then in the Trust Fund. 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, (iv) for any Loan Group 1 Mortgage Loans, the Fannie Mae
Guaranty Fee Rate and (v) commencing with the Distribution Date in June 2001,
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, $365,000,000 and, with respect to the Class A-2 Investor
Certificates, $185,000,000.
Original Investor Certificate Principal Balance: With respect to the
Class A-1 Investor Certificates, $365,000,000 and, with respect to the Class
A-2 Investor Certificates, $185,000,000.
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 Available Transferor Subordinated
Amount over the related Required Transferor Subordinated 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 00010351, 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 June 2005 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 beginning on the Rapid Amortization
Commencement Date 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 (with
respect to the Class A-2 Investor Certificates) or the Credit Enhancer (with
respect to the Class A-1 Investor Certificates) 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 Transferor Subordinated Amount: As defined in the Insurance
Agreement, and that definition shall remain in effect notwithstanding the
existence of a Credit Enhancer Condition.
Reserve Fund: The Eligible Account established and maintained for the
benefit of the Holders of the Investor Certificates, the Credit Enhancer and
Fannie Mae in accordance with Section 3.02(c) hereof.
Reserve Fund Deposit: As to any Distribution Date after the date on which
the Required Transferor Subordinated 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.
Side Letter Agreement: The agreement dated May 30, 2000 among Fannie Mae,
the Sponsor, and the Depositor.
Specified Reserve Fund Requirement: As to any Distribution Date, an
amount equal to the excess of (i) the sum of the Required Transferor
Subordinated Amounts for both Loan Groups over (ii) the sum of the Available
Transferor Subordinated 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 Ratings Services, 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 Transferor Collections up to the related
Available Transferor Subordinated Amount for such Loan Group and Distribution
Date.
Subsequent Closing Date: Any date designated by the Depositor on which
the Trust acquires Additional Home Equity Loans pursuant to Section 2.01(b).
Subsequent Cut-off Date: The cut-off date designated by the Depositor in
a Transfer Document in connection with the acquisition of Additional Home
Equity Loans by the Trust pursuant to Section 2.01(b).
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 Document: A document substantially in the form of Exhibit J.
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) Initial Transfer. 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 due on or before 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,
the Credit Enhancer and Fannie Mae; and (vi) all proceeds of the foregoing.
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. 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.
(b) Additional Transfers. The Depositor may sell to the Trust Additional
Home Equity Loans for the related Loan Group on any Subsequent Closing Date
designated by the Depositor on or before June 8, 2000. The Depositor shall
notify the Trustee, the Credit Enhancer, Fannie Mae, and each Rating Agency of
its designation of a Subsequent Closing Date at least one Business Day in
advance. On each Subsequent Closing Date the Depositor shall deliver a
Transfer Document and the Officer's Certificate referred to in Section
2.01(c)(ix) to the Trustee, and the Trustee shall pay to the order of the
Depositor from the relevant Additional Loan Account and set aside in an
account under its control for the benefit of the Depositor for later delivery
to the Depositor the purchase price in an amount equal to the Cut-off Date
Asset Balance specified in the Transfer Document, up to the amount of funds
remaining in the relevant Additional Loan Account. Upon delivery of the
Transfer Document and payment of the purchase price, the Depositor hereby
transfers, assigns, sets over and otherwise conveys to the Trust without
recourse (subject to Sections 2.02 and 2.04) all of its right, title and
interest in and to each Additional Home Equity Loan identified in the Transfer
Document, including its Asset Balance (including all Additional Balances) and
all collections in respect thereof received after the relevant Subsequent
Cut-off Date (excluding payments due on or before the Subsequent Cut-off Date)
and all proceeds of the foregoing. 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 shall also deliver to the Trustee, the Credit Enhancer and
Fannie Mae by June 22, 2000 an opinion of counsel relating to each Subsequent
Closing Date to the effect that a court in a bankruptcy context addressing the
transfer of the Additional Home Equity Loans would characterize the transfer
as a sale rather than as a secured lending. On the day the revised Mortgage
Loan Schedule and that opinion of counsel are delivered, the Trustee shall
deliver to the order of the Depositor the funds for the purchase price for the
related Additional Home Equity Loans set aside on the relevant Subsequent
Closing Date, and any earnings on those funds since the relevant Subsequent
Closing Date.
(c) Conditions Precedent to Subsequent Additions. The obligation of the
Trustee on behalf of the Trust to pay the purchase price from the relevant
Additional Loan Account for the benefit of the Depositor and accept transfer
of the Additional Home Equity Loans and the other property and rights relating
to them on the related Subsequent Closing Date is subject to the satisfaction
of each of the following conditions by the Subsequent Closing Date:
(i) the Depositor shall have delivered to the Trustee a properly
completed and executed Transfer Document;
(ii) as of the related Subsequent Closing Date, neither the Sponsor
nor the Depositor is insolvent nor shall either of them be made insolvent
by the transfer of the Additional Home Equity Loans nor is either of them
aware of any pending insolvency;
(iii) the addition shall not result in a material adverse federal
tax consequence to the Trust or the Certificateholders;
(iv) the Subsequent Closing Date is not after June 8, 2000;
(v) neither the Depositor nor the Trust shall have been advised in
writing by any Rating Agency that the transfer of the Additional Home
Equity Loans would result in a reduction or withdrawal of the Rating
Agency's then current rating of the Certificates (without regard to the
Policy and, in the case of the Class A-1 Investor Certificates, the
Fannie Mae Guaranty);
(vi) on the Subsequent Closing Date each of the representations and
warranties in Section 2.04(a) (excluding clauses (xvi), (xxv), (xxvii),
(xxviii), and (xxix)) are true with respect to the Subsequent Mortgage
Loans;
(vii) the addition of the Additional Home Equity Loans will not
result in a significant variance as of the Subsequent Closing Date from
the Mortgage Loan pool characteristics covered by the representations and
warranties in Section 2.04(a) (xvi), (xxv), (xxvii), (xxviii), and (xxix)
after taking into account the addition of the Additional Home Equity
Loans;
(viii)as of the relevant Subsequent Closing Date, the Sponsor is not
aware of any mechanics' or similar liens or claims that have been filed
for work, labor, or material affecting the related Mortgaged Property
that are, or may be, liens prior or equal to the lien of the related
Mortgage, except liens that are fully insured against by the title
insurance policy referred to in Section 2.04(xiv); and
(ix) the Depositor shall have delivered or caused the Sponsor to
deliver to the Trustee an Officer's Certificate confirming the
satisfaction of each of these conditions precedent.
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(d) Additional Balances; Future Fundings. Additional Balances shall be
part of the related Asset Balance and are hereby transferred to the Trust on
the Closing Date for the Initial Mortgage Loans and on the relevant Subsequent
Closing Date for the Additional Home Equity Loans pursuant to this Section
2.01, and therefore are part of the Trust property. 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.
(e) Delayed Delivery. In connection with the transfer and assignment
under Section 2.01(a) 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 Initial Mortgage Loans, and (b) within thirty days following
the Closing Date, with respect to the remaining Initial Mortgage Loans, the
Initial Mortgage Files. In connection with the transfers and assignments by
the Depositor under Section 2.01(b), the Depositor shall deliver or cause the
Sponsor to deliver to the Trustee a revised Mortgage Loan Schedule reflecting
the addition of the Additional Home Equity Loans within 15 days following the
relevant Subsequent Closing Date and the relevant Initial Mortgage Files
within thirty days following the relevant Subsequent Closing Date.
(f) Substitution and Repurchase. 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 Section 2.01(e) 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).
(g) Mark Records. The Sponsor hereby confirms to the Trustee that it has
caused the portions of the Electronic Ledgers relating to the Initial Mortgage
Loans to be clearly and unambiguously marked, and has made the appropriate
entries in its general accounting records, to indicate that the Initial
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.
By the relevant Subsequent Closing Date, the Sponsor shall cause the
portions of the Electronic Ledgers relating to the Additional Home Equity
Loans to be clearly and unambiguously marked, and shall make 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. By
the relevant Subsequent Closing Date, the Master Servicer shall clearly and
unambiguously make 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.
(h) UCC Filings. The Depositor agrees (subject to paragraph (i) 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 by 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 30 days of any
event necessitating such filing), as are necessary to perfect and protect the
Certificateholders', the Credit Enhancer's and Fannie Mae's interests in each
Cut-off Date Asset Balance and Additional Balances and the proceeds thereof.
(i) Sponsor Rating Downgrade. 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 Section 2.01(e) 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, (y) deliver to the Trustee an Opinion of Counsel addressed to the
Trustee, the Credit Enhancer and Fannie Mae 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), the Credit Enhancer (or if a Credit Enhancer
Condition is then existing, to Fannie Mae in lieu of the Credit Enhancer), or
(z) cause the MERS(R) System to indicate (and provide evidence to the Trustee
that it has done so) that the Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders, the Credit Enhancer, and, for Mortgages related to
Loan Group 1, Fannie Mae by including (or deleting, in the case of Mortgage
Loans that are repurchased in accordance with this Agreement) in the MERS
computer files (a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field
"[IDENTIFY THE FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b)
the code "[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field"
which identifies the series of the Certificates issued in connection with the
Mortgage Loans.
(j) Sale Treatment. 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.
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, the Credit Enhancer and, to the extent
applicable to the Class A-1 Investor Certificates, Fannie Mae.
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(e), 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 and Fannie Mae) 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,
the Credit Enhancer or Fannie Mae, in respect of any Mortgage Loan as a result
of a defect in any document constituting a part of its Mortgage File, or (ii)
when the Mortgage Loan is not registered on the MERS(R) System and an
Assignment of Mortgage to the Trustee has not been recorded if, as and when
required by Section 2.01(i), 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, the Credit Enhancer and Fannie
Mae 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, the Credit Enhancer or
Fannie Mae.
(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, the
Credit Enhancer and Fannie Mae 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;
(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; and
(vi) If any Mortgage Loan has been registered on the MERS(R) System,
the Master Servicer is a member of MERS in good standing.
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, the Credit Enhancer or Fannie
Mae, the person discovering such breach shall give prompt written notice to
the other parties and to the Credit Enhancer and Fannie Mae. Within 90 days of
its discovery or its receipt of notice of breach, or, with the prior written
consent of a Responsible Officer of the Trustee, such longer period specified
in such consent, the Master Servicer shall cure such breach in all material
respects.
Section 2.04. Representations and Warranties of the Sponsor Regarding
the Mortgage Loans; Retransfer of Certain Mortgage Loans. (a) The Sponsor
hereby represents and warrants to the Trustee, the Credit Enhancer and, with
respect to the Mortgage Loans in Loan Group 1 only, Fannie Mae that as of the
Cut-off Date, unless otherwise specifically set forth herein:
(i) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and 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
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 or Subsequent Cut-off Date, as applicable), and
all proceeds of the applicable 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 Section
2.01(a) or (b), as applicable, and this Agreement constitutes a valid
transfer and assignment to the Trustee of the foregoing property such
that, upon execution of this Agreement, it is owned by the Trustee free
of all liens and other encumbrances, and is part of the corpus of the
Trust conveyed to the Trust by the Sponsor, and upon payment for the
Additional Balances, the Purchase Agreement and this Agreement 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 free of
all liens and other encumbrances 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Mortgage Loan has not been assigned or pledged,
and the Sponsor is its sole owner and holder 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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, relevant
Subsequent Cut-off Date, or date of substitution, as applicable, 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity 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 on an Initial Mortgage Loan is more
than 59 days delinquent (measured on a contractual basis) and no Minimum
Monthly Payment on any other Mortgage Loan being transferred on the
relevant date is more than 30 days delinquent (measured on a contractual
basis) and no more than 2.98% of the Initial Mortgage Loans in Loan Group
1 being transferred on the relevant date and no more than 1.39% of the
Initial Mortgage Loans in Loan Group 2 being transferred on the relevant
date (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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, 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, and the servicing
practices used by the Master Servicer with respect to each Mortgage Loan
have been consistent with the practices and the degree of skill and care
the Master Servicer exercises in servicing for itself loans that it owns
that are comparable to the Mortgage Loans;
(xiv) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, either a lender's
title insurance policy or binder was issued on the date of origination of
the Mortgage Loan being transferred on the relevant date 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage Loans in Loan
Group 1 and for the Initial Mortgage Loans in Loan Group 2 no more than
0.30% and 0.31%, respectively, of such Mortgage Loans, by aggregate
principal balance, are secured by Mortgaged Properties located in one
United States postal zip code;
(xvii) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the Combined
Loan-to-Value Ratio for each Mortgage Loan was not in excess of 100%;
(xviii) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, no selection
procedure reasonably believed by the Sponsor to be adverse to the
interests of the Certificateholders, the Credit Enhancer or Fannie Mae
was utilized in selecting the Mortgage Loans;
(xix) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the Sponsor has
not transferred the Mortgage Loans to the Trust with any intent to
hinder, delay or defraud any of its creditors;
(xx) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, 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) By the Closing Date with respect to the Initial Mortgage Loans
and, to the extent not already included in such filing with respect to
the Mortgage Loans, within 30 days of the relevant Subsequent Closing
Date with respect to any Additional Home Equity Loans, and within 30 days
of 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 relevant Mortgage Loans;
(xxii) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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)As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, 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 Initial
Mortgage Loans in Loan Group 1 and the Initial Mortgage Loans in Loan
Group 2 on a contractual basis as of the Cut-off Date for the Initial
Mortgage Loans is approximately 294.53 months and 297.31 months,
respectively. On each date that the Loan Rates have been adjusted,
interest rate adjustments on the Initial Mortgage Loans were made in
compliance with the related Mortgage and Mortgage Note and applicable
law. Over the term of each Initial Mortgage Loan, the Loan Rate may not
exceed the related Loan Rate Cap, if any. The Loan Rate Caps for the
Initial Mortgage Loans in Loan Group 1 range between 11.750% and 26.000%
and the weighted average Loan Rate Cap for Loan Group 1 is approximately
17.854%. The Loan Rate Caps for the Initial Mortgage Loans in Loan Group
2 range between 12.750% and 18.000% and the weighted average Loan Rate
Cap for Loan Group 2 is approximately 17.913%. The Gross Margins for the
Initial Mortgage Loans in Loan Group 1 range between 0.000% and 7.000%
and the weighted average Gross Margin is approximately 2.039% as of the
Cut-off Date for the Initial Mortgage Loans in Loan Group 1. The Gross
Margins for the Initial Mortgage Loans in Loan Group 2 range between
-1.750% and 8.650% and the weighted average Gross Margin is approximately
2.046% as of the Cut-off Date for the Initial Mortgage Loans in Loan
Group 2. The Loan Rates on the Initial Mortgage Loans in Loan Group 1
range between 5.875% and 14.000% and the weighted average Loan Rate on
the Initial Mortgage Loans in Loan Group 1 is approximately 8.002%. The
Loan Rates on the Initial Mortgage Loans in Loan Group 2 range between
5.990% and 14.500% and the weighted average Loan Rate on the Initial
Mortgage Loans in Loan Group 2 is approximately 8.058%.
(xxvi) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 21.04% (by Cut-off Date Loan Group Balance) of
the Initial Mortgage Loans in Loan Group 1 and no more than 21.58% (by
Cut-off Date Loan Group Balance) of the Initial 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 78.96% (by Cut-off Date
Loan Group Balance) of the Initial Mortgage Loans in Loan Group 1 and
78.42% (by Cut-off Date Loan Group Balance) of the Initial 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 Initial Mortgage Loans in Loan
Group 1 range between approximately $6,100.00 and $219,160.00 with an
average of approximately $34,216.34. The Credit Limits on the Initial
Mortgage Loans in Loan Group 2 range between approximately $7,000.00 and
$1,000,000.00 with an average of approximately $57,318.88. As of the
Cut-off Date for the Initial Mortgage Loans, no Initial Mortgage Loan in
Loan Group 1 had a principal balance in excess of approximately
$209,200.00 and no Initial Mortgage Loan in Loan Group 2 had a principal
balance in excess of approximately $1,000,000.00 and the average
principal balance of the Initial Mortgage Loans in Loan Group 1 and Loan
Group 2 is equal to approximately $24,111.84 and $43,977.53,
respectively;
(xxix) Approximately 3.39% and 96.61% of the Initial Mortgage Loans
in Loan Group 1, by aggregate principal balance as of the Cut-off Date
for the Initial Mortgage Loans, are first and second liens, respectively.
Approximately 3.57% and 96.43% of the Initial Mortgage Loans in Loan
Group 2, by aggregate principal balance as of the Cut-off Date for the
Initial Mortgage Loans, are first and second liens, respectively;
(xxx) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, 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, Fannie Mae 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 Trust and the Investor Certificateholders in 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, Fannie Mae 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 or Fannie Mae in the related Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties,
the Credit Enhancer and Fannie Mae. 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 (or if a Credit
Enhancer Condition is then existing, to Fannie Mae in lieu of the Credit
Enhancer) as evidenced by their written consents), either (1) accept a
transfer of such Mortgage Loan from the Trust or (2) 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, the Credit Enhancer and Fannie Mae; provided, however,
that the Sponsor shall defend and indemnify the Trustee, the Credit Enhancer,
Fannie Mae 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, the Credit
Enhancer or Fannie Mae 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 without regard to
the Policy or the Fannie Mae Guaranty.
(e) Amendment to Certificate of Incorporation. The Depositor will not
amend its Certificate of Incorporation without prior written notice to the
Rating Agencies, the Credit Enhancer and Fannie Mae.
(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, the Credit
Enhancer and Fannie Mae.
Section 2.06. Transfers of Mortgage Loans at Election of Transferor.
Subject to the conditions set forth below, the Transferor may, but shall not
be obligated to, require the transfer of Mortgage Loans from the Trust to the
Transferor as of the close of business on a Distribution Date (the "Transfer
Date"). In connection with any transfer, the Transferor Interest shall be
reduced by the aggregate Asset Balances as of their Transfer Date of the
Mortgage Loans transferred. 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, the Credit Enhancer and, if the
affected Mortgage Loans are in Loan Group 1, Fannie Mae 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, the Credit Enhancer or
Fannie Mae 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, the Credit Enhancer and, if the
affected Mortgage Loans are in Loan Group 1, Fannie Mae 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, the Credit Enhancer and,
if applicable, Fannie Mae 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 or the Fannie
Mae Guaranty;
(vii) The Transferor shall have delivered to the Trustee, the Credit
Enhancer and, if the affected Mortgage Loans are in Loan Group 1, Fannie
Mae an Officer's Certificate certifying that the items set forth in
subparagraphs (i) through (vi), inclusive, have been performed or are
true and correct, as the case may be. The Trustee may conclusively rely
on such Officer's Certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability in
so relying; and
(viii) The Transferor shall have satisfied all requirements with
respect to such retransfer which may be imposed by the U.S. Department of
Labor after the Closing Date and prior to the date of such retransfer in
order to ensure that any administrative exemption from the prohibited
transaction rules of ERISA and the related excise tax provisions of
Section 4975 of the Code granted by such Department to any underwriter of
the Certificates shall continue to apply to the purchase, holding and
resale of Certificates by Plans and to the servicing, management or
operation of the Trust; provided, however, that the Transferor shall not
be required to satisfy such requirements if it obtains an Opinion of
Counsel to the effect that such retransfer would not result in a
non-exempt prohibited transaction.
Upon receiving the requisite information from the Transferor, the Master
Servicer shall perform in a timely manner those acts required of it, as
specified above. Upon satisfaction of the above conditions, on the Transfer
Date the Trustee shall deliver, or cause to be delivered, to the Transferor
the Mortgage File for each Mortgage Loan being so transferred, and the Trustee
shall execute and deliver to the Transferor such other documents prepared by
the Transferor as shall be reasonably necessary to transfer such Mortgage
Loans to the Transferor. Any such transfer of the Trust's right, title and
interest in and to Mortgage Loans shall be without recourse, representation or
warranty by or of the Trustee or the Trust to the Transferor.
Section 2.07. Execution and Authentication of Certificates. The Trustee,
on behalf of the Trust, has caused to be executed, authenticated and delivered
to or upon the order of the Depositor, in exchange for the Trust, concurrently
with the sale, assignment and conveyance to the Trustee of the Trust, Investor
Certificates in authorized denominations and the Transferor Certificates,
together evidencing the ownership of the entire Trust.
Section 2.08. Tax Treatment. It is the intention of the Depositor, the
Transferor and the Investor Certificateholders that the Investor Certificates
will be indebtedness of the Transferor for federal, state and local income and
franchise tax purposes and for purposes of any other tax imposed on or
measured by income. The Transferor, the Depositor, the Trustee and each
Investor Certificateholder (or Certificate Owner) by acceptance of its
Investor Certificate (or, in the case of a Certificate Owner, by virtue of
such Certificate Owner's acquisition of a beneficial interest therein) agrees
to treat the Investor Certificates (or beneficial interest therein), for
purposes of federal, state and local income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness of the Transferor
secured by the assets of the Trust and to report the transactions contemplated
by this Agreement on all applicable tax returns in a manner consistent with
such treatment. Each Investor Certificateholder agrees that it will cause any
Certificate Owner acquiring an interest in an Investor Certificate through it
to comply with this Agreement as to treatment of the Investor Certificates as
indebtedness for federal, state and local income and franchise tax purposes
and for purposes of any other tax imposed on or measured by income. The
Trustee will prepare and file all tax reports required hereunder.
Section 2.09. Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Trustee on behalf of the
Certificateholders, the Credit Enhancer and Fannie Mae 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 Initial Mortgage Loans to the Trustee,
as of each Subsequent Closing Date, the Depositor has transferred all
right, title and interest in the related Additional Home Equity Loans to
the Trustee and, as of each applicable date of substitution, the
Depositor has transferred all right, title and interest in the related
Eligible Substitute Mortgage 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,
the Credit Enhancer and Fannie Mae 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 the relevant Subsequent Cut-off Date, as applicable, 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 Original Invested Amount and clause (ii)(B) shall not
exceed 40% of the related Original Invested Amount; 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
Original Invested Amount (such 50% herein referred to as the "Increased Senior
Lien Limitation").
The Master Servicer may also, without prior approval from the Rating
Agencies, the Credit Enhancer or Fannie Mae, 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 increase the Credit Limits on
the Mortgage Loans having aggregate Asset Balances of up to an additional 2.5%
of the Original Invested Amount, 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, without prior approval from the Rating
Agencies, the Credit Enhancer or Fannie Mae, may 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 Original Invested
Amount. 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, the Credit Enhancer or Fannie Mae and (ii) are consistent
with prudent and customary business practice as evidenced by a certificate
signed by a Servicing Officer delivered to the Trustee, the Credit Enhancer
and Fannie Mae.
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, the Credit Enhancer or Fannie Mae and (ii) are
consistent with prudent and customary business practice as evidenced by a
certificate signed by a Servicing Officer delivered to the Trustee, the Credit
Enhancer and Fannie Mae. 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 Master Servicer may also register any Mortgage Loan on the MERS(R)
System, or cause the removal from registration of any Mortgage Loan on the
MERS(R) System, and execute and deliver, on behalf of the Trustee and the
Certificateholders, any instruments of assignment and other comparable
instruments with respect to the assignment or re-recording of a Mortgage in
the name of MERS, solely as nominee for the Trustee and its successors and
assigns.
For so long as any Mortgage Loan is registered on the MERS(R) System, the
Master Servicer shall maintain in good standing its membership in MERS and
shall comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS. If any Mortgage Loans are registered on the MERS(R) System, the Master
Servicer may cause MERS to execute and deliver an assignment of mortgage in
recordable form to transfer any of the Mortgage Loans registered on the
MERS(R) System from MERS to the Trustee. The Master Servicer shall promptly
notify MERS of any transfer of beneficial ownership or release of any security
interest in any MOM Loan.
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,
Collection Account in trust for the registered holders of Revolving Home
Equity Loan Asset Backed Certificates, Series 2000-B, Financial Guaranty
Insurance Company and Fannie Mae." 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 (A) an amount equal to the excess of the aggregate amount
payable pursuant to Section 5.01(a)(i), (ii), and (iii) on the first
Distribution Date over what the aggregate Investor Interest Collections would
be if the Minimum Monthly Payments due during the first Collection Period were
made on each Mortgage Loan and (B) 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, the Credit Enhancer and Fannie Mae. 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, Reserve
Fund in trust for the registered holders of Revolving Home Equity Loan Asset
Backed Certificates, Series 2000-B, Financial Guaranty Insurance Company and
Fannie Mae." The Reserve Fund shall be an Eligible Account. The Reserve Fund
shall be maintained in accordance with Section 5.01(e) hereof.
(d) The Trustee shall establish and maintain two trust accounts (the
"Additional Loan Accounts") titled "Bank One, National Association, as
Trustee, Group 1 Additional Loan Account in trust for the registered holders
of Revolving Home Equity Loan Asset Backed Certificates, Series 2000-B,
Financial Guaranty Insurance Company and Fannie Mae" and "Bank One, National
Association, as Trustee, Group 2 Additional Loan Account in trust for the
registered holders of Revolving Home Equity Loan Asset Backed Certificates,
Series 2000-B, Financial Guaranty Insurance Company and Fannie Mae." The
Additional Loan Accounts shall be Eligible Accounts. The Additional Loan
Accounts shall be maintained in accordance with Section 3.03(b).
Section 3.03. Withdrawals from the Collection Account and the Additional
Loan Accounts. (a) 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 to the extent that it has not been retained pursuant to
Section 3.02(b);
(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);
(iii) To pay from Principal Collections for the relevant Loan Group
the amounts provided for the purchase of Draws pursuant to Section
2.01(a); and
(iv) 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 clauses (iii) and
(iv)), 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.
(b) Upon satisfaction of the conditions precedent to subsequent additions
in Section 2.01(c) on a Subsequent Closing Date designated by the Depositor,
the Trustee shall withdraw from the appropriate Additional Loan Account and
set aside for the benefit of the Depositor for later delivery pursuant to
Section 3.03(c) an amount equal to the Cut-off Date Asset Balance in the
Transfer Document to purchase the Additional Home Equity Loans covered by the
Transfer Document. A separate Transfer Document shall be used for Loan Group 1
Mortgage Loans and Loan Group 2 Mortgage Loans.
The Additional Home Equity Loans transferred by a Transfer Document on
any Subsequent Closing Date shall be determined as follows. If Transfer
Documents for both Loan Group 1 and Loan Group 2 Mortgage Loans are both
delivered on one Subsequent Closing Date, then the Additional Home Equity
Loans transferred by the Loan Group 1 Transfer Document shall be determined
first. The Sponsor shall list all funded Mortgage Loans then owned by it for
securitization that qualify for inclusion in Loan Group 1 by the date on which
they were funded, and for each date, the mortgagors shall be listed
alphabetically. Beginning with the earliest date, sequentially by date and
within a date alphabetically, the listed loans shall become Loan Group 1
Additional Home Equity Loans until either their aggregate Cut-off Date Asset
Balance is as close as possible to equal to the Cut-off Date Asset Balance
indicated on the Loan Group 1 Transfer Document without exceeding it or all of
the loans through the Subsequent Cut-off Date have been transferred.
Once the potential Additional Home Equity Loans are identified in this
manner, the total potential Loan Group 1 loan pool shall be tested for
compliance with the pool characteristics covered by the representations and
warranties in Section 2.04(a)(xvi), (xxv), (xxvii), (xxviii), and (xxix) after
taking into account the addition of the potential Additional Home Equity
Loans. If any pool characteristic is outside any permitted parameter by more
than 10% of the parameter, then beginning with the last Mortgage Loan
initially added as a potential Additional Home Equity Loan and progressing in
reverse order, any potential Additional Home Equity Loan having a
characteristic that is outside of the permitted parameters of a parameter
violated by the total potential Loan Group 1 loan pool shall be removed. Then
additional Mortgage Loans shall be added as provided in the preceding
paragraph except that no Mortgage Loan shall be added if it has a
characteristic that is outside of the permitted parameters of a parameter
violated by the total potential Loan Group 1 loan pool. This procedure shall
be repeated until the pool characteristics covered by the representations and
warranties in Section 2.04(a)(xvi), (xxv), (xxvii), (xxviii), and (xxix) are
satisfied within 10% of each parameter specified in those representations and
warranties after taking into account the addition of the potential Additional
Home Equity Loans.
After the Loan Group 1 Additional Home Equity Loans to be transferred on
the Subsequent Closing Date have been determined, the Sponsor shall list all
funded Mortgage Loans then owned by it for securitization that qualify for
inclusion in Loan Group 2 by the date on which they were funded, and for each
date, the mortgagors shall be listed alphabetically. Beginning with the
earliest date, sequentially by date and within a date alphabetically, the
listed loans shall become Loan Group 2 Additional Home Equity Loans until
either their aggregate Cut-off Date Asset Balance is as close as possible to
equal to the Cut-off Date Asset Balance indicated on the Loan Group 2 Transfer
Document without exceeding it or all of the loans through the Subsequent
Cut-off Date have been transferred. The testing procedures of the previous
paragraph shall then be applied to the total potential Loan Group 2 loan pool.
If only one Transfer Document is delivered for a Subsequent Closing Date, then
the above procedure for either Loan Group 1 or Loan Group 2, as appropriate
for the Transfer Document, shall be followed.
(c) On the date on which the revised Mortgage Loan Schedule reflecting
the addition of the Additional Home Equity Loans covered by a Transfer
Document are delivered to the Trustee along with an opinion of counsel to the
effect that a court in a bankruptcy context addressing the transfer of the
Additional Home Equity Loans would characterize the transfer as a sale rather
than as a secured lending, the Trustee shall deliver to the order of the
Depositor an amount in cash equal to the actual Cut-off Date Asset Balance of
the relevant Additional Home Equity Loans, and to the Master Servicer any
earnings on those funds since the relevant Subsequent Closing Date. If after
that payment any funds remain from the original set aside with respect to the
Transfer Document pursuant to Section 2.01(b), then they shall be returned to
the appropriate Additional Loan Account. If on July 8, 2000 any funds remain
in the Trustee's possession from any set aside under Section 2.01(b), then
they shall be returned to the appropriate Additional Loan Account.
(d) All earnings on funds in the Additional Loan Accounts and on funds
held in a set aside under Section 2.01(b) are for the account of the Master
Servicer. The Additional Loan Accounts and the set asides shall be invested in
Eligible Investments. If any funds remain in the Additional Loan Accounts on
July 8, 2000, to the extent that they represent earnings on the amounts
originally deposited into the Additional Loan Accounts, the Trustee shall
distribute them to the order of the Master Servicer. The remaining funds shall
be transferred to the Collection Account and treated as though they were
Investor Principal Collections from the related Loan Group and they shall
increase the Scheduled Principal Collections Distribution Amount (above the
amount calculated without regard to this provision) for purposes of
calculating amounts distributable on the following Distribution Date.
(e) If at any time the Depositor becomes aware that the Cut-off Date
Asset Balance of Additional Home Equity Loans reflected on any Transfer
Document exceeds the actual Cut-off Date Asset Balance of the relevant
Additional Home Equity Loans, the Depositor may so notify the Trustee and the
Trustee shall redeposit into the relevant Additional Loan Account the excess
reported to it by the Depositor.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Master Servicer shall cause to be maintained for each Mortgage
Loan hazard insurance naming the Master Servicer or the related subservicer as
loss payee thereunder providing extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan from time to time or (ii) the
combined principal balance owing on such Mortgage Loan and any mortgage loan
senior to such Mortgage Loan from time to time. The Master Servicer shall also
maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, hazard insurance with extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value from time to time
of the improvements which are a part of such property or (ii) the combined
principal balance owing on such Mortgage Loan and any mortgage loan senior to
such Mortgage Loan at the time of such foreclosure or deed in lieu of
foreclosure plus accrued interest and the good-faith estimate of the Master
Servicer of related Liquidation Expenses to be incurred in connection
therewith. Amounts collected by the Master Servicer under any such policies
shall be deposited in the Collection Account to the extent called for by
Section 3.02. In cases in which any Mortgaged Property is located in a
federally designated flood area, the hazard insurance to be maintained for the
related Mortgage Loan shall include flood insurance. All such flood insurance
shall be in such amounts as are required under applicable guidelines of the
Federal Flood Emergency Act. The Master Servicer shall be under no obligation
to require that any Mortgagor maintain earthquake or other additional
insurance and shall be under no obligation itself to maintain any such
additional insurance on property acquired in respect of a Mortgage Loan, other
than pursuant to such applicable laws and regulations as shall at any time be
in force and as shall require such additional insurance. If the Master
Servicer shall obtain and maintain a blanket policy consistent with prudent
industry standards insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry standards, it shall conclusively
be deemed to have satisfied its obligations as set forth in the first sentence
of this Section 3.04, it being understood and agreed that such policy may
contain a deductible clause on terms substantially equivalent to those
commercially available and maintained by comparable servicers. If such policy
contains a deductible clause, the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section, and there shall have
been a loss which would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause.
Section 3.05. Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall exercise its right to accelerate the
maturity of such Mortgage Loan consistent with the then current practice of
the Master Servicer and without regard to the inclusion of such Mortgage Loan
in the Trust. If it elects not to enforce its right to accelerate or if it is
prevented from doing so by applicable law, the Master Servicer (so long as
such action conforms with the underwriting standards generally acceptable in
the industry at the time for new origination) is authorized to take or enter
into an assumption and modification agreement from or with the Person to whom
such Mortgaged Property has been or is about to be conveyed, pursuant to which
such Person becomes liable under the Credit Line Agreement and, to the extent
permitted by applicable law, the Mortgagor remains liable thereon. The Master
Servicer shall notify the Trustee that any assumption and modification
agreement has been completed by delivering to the Trustee an Officer's
Certificate certifying that such agreement is in compliance with this Section
3.05 and by forwarding the original copy of such assumption and modification
agreement to the Trustee. Any such assumption and modification agreement
shall, for all purposes, be considered a part of the related Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. No change in the terms of the related Credit Line Agreement may be
made by the Master Servicer in connection with any such assumption to the
extent that such change would not be permitted to be made in respect of the
original Credit Line Agreement pursuant to the fourth paragraph of Section
3.01(a). Any fee collected by the Master Servicer for entering into any such
agreement will be retained by the Master Servicer as additional servicing
compensation.
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans. The Master Servicer shall foreclose upon or otherwise
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default when, in the opinion of
the Master Servicer based upon the practices and procedures referred to in the
following sentence, no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 3.02; provided that if the Master
Servicer has actual knowledge or reasonably believes that any Mortgaged
Property is affected by hazardous or toxic wastes or substances and that the
acquisition of such Mortgaged Property would not be commercially reasonable,
then the Master Servicer will not cause the Trust to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. In connection with
such foreclosure or other conversion, the Master Servicer shall follow such
practices (including, in the case of any default on a related senior mortgage
loan, the advancing of funds to correct such default) and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities. The foregoing is subject to the proviso
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the correction of any default on a
related senior mortgage loan or restoration of any property unless it shall
determine that such expenditure will increase Net Liquidation Proceeds.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders.
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust any Mortgage Loan which is 91 days
or more delinquent at a price equal to the purchase price described below. The
price for any Mortgage Loan purchased hereunder (which shall be an amount
equal to 100% of the Asset Balance of such Mortgage Loan plus accrued interest
thereon at the applicable Loan Rate from the date through which interest was
last paid by the related Mortgagor to the first day of the month in which such
amount is to be distributed to 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, Fannie Mae 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. If the
Mortgage has been registered on the MERS(R) System, the Master Servicer shall
cause the removal of the Mortgage from registration on the MERS(R) System and
execute and deliver, on behalf of the Trustee and the Certificateholders, any
instruments of satisfaction or cancellation or of partial or full release. It
is understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. From time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, or in connection with the
payment in full of the Asset Balance of any Mortgage Loan, the Trustee shall,
upon request of the Master Servicer and delivery to the Trustee of a Request
for Release substantially in the form attached hereto as Exhibit G signed by a
Servicing Officer, release the related Mortgage File to the Master Servicer
and the Trustee shall execute such documents, in the forms provided by the
Master Servicer, as shall be necessary to the prosecution of any such
proceedings or the taking of other servicing actions. Such trust receipt shall
obligate the Master Servicer to return the Mortgage File to the Trustee when
the need therefor by the Master Servicer no longer exists, unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of a certificate of a
Servicing Officer similar to that hereinabove specified, the trust receipt
shall be released by the Trustee to the Master Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the assignments of
Mortgage in accordance with the provisions hereof, the Trustee shall, if so
requested in writing by the Master Servicer, execute an appropriate assignment
in the form provided to the Trustee by the Master Servicer to assign such
Mortgage Loan for the purpose of collection to the Master Servicer or to the
related subservicer (any such assignment shall unambiguously indicate that the
assignment is for the purpose of collection only), and, upon such assignment,
the Master Servicer will thereupon bring all required actions in its own name
and otherwise enforce the terms of the Mortgage Loan and deposit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments
due under any such Mortgage Loan are paid by the Mortgagor and any other
defaults are cured, then the Master Servicer shall promptly reassign such
Mortgage Loan to the Trustee and return the related Mortgage File to the place
where it was being maintained.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Master Servicer. The Master Servicer shall be entitled to receive the
Servicing Fee pursuant to Section 3.03 as compensation for its services in
connection with servicing the Mortgage Loans. Moreover, additional servicing
compensation in the form of late payment charges or other receipts not
required to be deposited in the Collection Account (other than Foreclosure
Profits) shall be retained by the Master Servicer. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its
activities hereunder (including payment of all other fees and expenses not
expressly stated hereunder to be for the account of the Certificateholders)
and shall not be entitled to reimbursement therefor except as specifically
provided herein. Liquidation Expenses are reimbursable to the Master Servicer
first, from related Liquidation Proceeds and second, from the Collection
Account pursuant to Section 5.01(a)(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, Fannie Mae and the Rating
Agencies, on or before May 31st of each year, beginning May 31, 2001, 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, Fannie Mae 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, 2001, 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, Fannie Mae 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, Fannie Mae (with respect to Mortgage Loans in Loan Group 1
only), 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 or the Fannie Mae Guaranty.
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 Fannie Mae 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 for reports of foreclosures and abandonments of any
mortgaged property, 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, substance, and timing 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, Fannie Mae 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 Fannie Mae pursuant to Section
5.01(a)(vi) and 5.01(a)(viii);
(xxx) the Fannie Mae Guaranty Payment Amount, if any, for the
Distribution Date;
(xxxi) the amount to be distributed to the Transferor pursuant to
Section 5.01(a)(xxv);
(xxxii) the amount to be paid to the Master Servicer pursuant to
Section 5.01(a)(xi);
(xxxiii) 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;
(xxxiv) 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;
(xxxv) the related Available Subordinated Transferor Amount after
giving effect to the distribution to be made on such Distribution Date;
(xxxvi) the number and principal balances of any Mortgage Loans in
the related Loan Group transferred to the Transferor pursuant to Section
2.06;
(xxxvii) 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;
(xxxviii) the Rolling Six Month Delinquency Rate for such Loan Group
and Distribution Date;
(xxxix) the amount on deposit in the Reserve Fund on the preceding
Distribution Date after all distributions on that day, 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), and the amount on
deposit in the Reserve Fund after all distributions on the current
Distribution Date;
(xl) in the Servicing Certificates for the first and second
Distribution Dates, by Loan Group, the number and Cut-off- Date Asset
Balance of Mortgage Loans for which the Mortgage Loan File was not
delivered to the Trustee within 30 days of the Closing Date or Subsequent
Closing Date, as applicable; and
(xli) in the Servicing Certificate for the first Distribution Date,
for each Loan Group the aggregate Cut-off Asset Balance of Additional
Home Equity Loans acquired by the Trust.
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 (or if a Credit Enhancer Condition is then existing,
of Fannie Mae in lieu of the Credit Enhancer). The Master Servicer shall give
notice of any such change to the Rating Agencies.
Section 4.02. Claims upon the Policy; Policy Payments Account.
(a) If the Credit Enhancement Draw Amount for a Class and Distribution
Date, determined as of the close of business on the third Business Day prior
to such Distribution Date, is more than zero, then the Trustee shall give
notice to the Credit Enhancer and, if the shortfall relates to the Class A-1
Investor Certificates, to Fannie Mae also 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 (with a copy of it to
be simultaneously delivered to Fannie Mae) 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. If the Credit Enhancer
fails to pay the amount payable under the Policy with respect to any Class A-1
Investor Certificates when so due, then the Trustee shall immediately notify
Fannie Mae (a "Deficiency Notice") by telephone and by telecopy (such
notification in no event to occur later than 2:00 P.M. on that Distribution
Date) of the amount of the Credit Enhancement Draw Amount relating to the
Class A-1 Investor Certificates that has not been received from the Credit
Enhancer.
(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, the Credit Enhancer and Fannie Mae 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 or, after a Credit Enhancer Default has occurred, the
Fannie Mae Guaranty 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. If the Trustee has received a payment on the Fannie Mae Guaranty
and no Credit Enhancer Default occurs with respect to the Distribution Date to
which the Fannie Mae Guaranty payment relates, then the Trustee shall return
that payment to Fannie Mae. Amounts paid under the Policy or the Fannie Mae
Guaranty 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 (or the day on which a payment on the Policy or
the Fannie Mae Guaranty is received, if later) with respect to which a claim
has been made under the Policy or the Fannie Mae Guaranty, the amount of any
funds received by the Trustee as a result of any claim under the Policy or the
Fannie Mae Guaranty, 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. Unless a Credit
Enhancer Default has occurred, any funds remaining in the Policy Payments
Account on the first Business Day following the later of the Distribution Date
and the Business Day after the day on which a payment on the Policy has been
paid to the Holders of Class A-1 or Class A-2 Certificates shall be remitted
to the Credit Enhancer, pursuant to the instructions of the Credit Enhancer,
by the end of such Business Day. If a Credit Enhancer Default has occurred,
then any funds remaining in the Policy Payments Account on the first Business
Day following the later of the Distribution Date and the Business Day after
the day on which a payment on the Fannie Mae Guaranty has been paid to Holders
of Class A-1 Certificates shall be remitted to Fannie Mae by the end of that
day but only up to any amount paid by Fannie Mae under the Fannie Mae
Guaranty.
(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 or the Fannie Mae Guaranty. The Credit
Enhancer and Fannie Mae 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 and Fannie Mae
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 (or if a Credit
Enhancer Condition is then existing, that Fannie Mae in lieu of the Credit
Enhancer as to the Class A-1 Investor Certificates) 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 or Fannie Mae, as applicable, 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. If a Credit Enhancer Default occurs or
if the claims-paying ability rating of the Credit Enhancer is downgraded, 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 Credit Enhancer Default or downgrade (without regard to the
Fannie Mae Guaranty, in the case of the Class A-1 Investor Certificates) 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 Credit Enhancer Default or
downgrade, provided, however, that the Trustee receives an Opinion of Counsel
to the effect that such substitution will not be treated as a significant
modification within the meaning of Treas. Reg. Section 1.1001-3.
Section 4.04. Effect of Payments by the Credit Enhancer; Subrogation.
Anything herein to the contrary notwithstanding, any payment with respect to
principal of or interest on a Class of Investor Certificates which is made
with moneys received pursuant to the terms of the Policy or the Fannie Mae
Guaranty 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, Fannie Mae, the Depositor, the
Master Servicer, the Trustee or the Certificate Registrar (a) to the extent
the Credit Enhancer or Fannie Mae, as applicable, 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
or Fannie Mae, as applicable, will be fully subrogated to the rights of such
Holders to receive such principal and interest from the Trust and (b) the
Credit Enhancer or Fannie Mae, as applicable, 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 or Fannie Mae for action to
preserve or enforce the Credit Enhancer's or Fannie Mae's, as applicable,
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.
(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 deposit in lieu of capitalized interest by the Master Servicer
pursuant to Section 3.02(b)(ii)(A), 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) (x) the related Premium pursuant to the Insurance Agreement to
the Credit Enhancer and (y) from Investor Interest Collections relating
to the Class A-1 Investor Certificates, the Fannie Mae Guaranty Fee to
Fannie Mae;
(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 (x) the Credit Enhancer for previously
unreimbursed Credit Enhancement Draw Amounts together with interest
thereon at the applicable rate set forth in the Insurance Agreement and
(y) for Loan Group 1 only, Fannie Mae for previously unreimbursed Fannie
Mae Guaranty Payment Amounts together with interest thereon at the
applicable rate set forth in the Side Letter Agreement;
(vii) the related Accelerated Principal Distribution Amount, if any,
to the related Class of Investor Certificateholders;
(viii) to (x) the Credit Enhancer for any amounts owed to the Credit
Enhancer pursuant to the Insurance Agreement and (y) for Loan Group 1
only, Fannie Mae for any amounts owed to Fannie Mae pursuant to the Side
Letter 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 August 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 August
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 to the related Class of
Certificateholders from the Credit Enhancement Draw Amount (but not including
any portion thereof consisting of a Preference Claim) drawn under the Policy
for such Distribution Date and Class pursuant to Section 4.02 as follows:
(i) first, as an addition to the amount distributed pursuant to
Section 5.01(a)(iii); and
(ii) second, the portion, if any, of the Credit Enhancement Draw
Amount remaining after the application of the amounts referred to in
first above, as an addition to the amounts distributed pursuant to
Section 5.01(b).
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, whether
paid by the Credit Enhancer or Fannie Mae) 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 Required Amount for the
Class A-1 Investor Certificates 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 paid by
the Credit Enhancer) 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 Required Amount for the Class A-2 Investor
Certificates 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, Fannie Mae 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 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 make available
to each Investor Certificateholder, the Master Servicer, the Credit Enhancer,
Fannie Mae and each Rating Agency on its Internet website a statement (the
"Monthly 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) for the first and second Distribution Dates, by Loan Group,
the number and Cut-off- Date Asset Balance of Mortgage Loans for which
the Mortgage Loan File was not delivered to the Trustee within 30 days of
the Closing Date or Subsequent Closing Date, as applicable;
(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.
If the Monthly Statement is not accessible to any of the Investor
Certificateholders, the Master Servicer, the Credit Enhancer, Fannie Mae, or
either Rating Agency on the Trustee's internet website, the Trustee shall
forward a hard copy of it to each Investor Certificateholder, the Master
Servicer, the Credit Enhancer, Fannie Mae, and each Rating Agency immediately
after the Trustee becomes aware that the Monthly Statement is not accessible
to any of them via the Trustee's internet website. The address of the
Trustee's internet website where the Monthly Statement will be accessible is
https://www.abs.bankone.com. Assistance in using the Trustee's internet
website may be obtained by calling the Trustee's customer service desk at
(800) 524-9472. The Trustee shall notify each Investor Certificateholder, the
Master Servicer, the Credit Enhancer, Fannie Mae, and each Rating Agency in
writing of any change in the address or means of access to the internet
website where the Monthly Statement is accessible.
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.
Section 5.05. Fannie Mae Guaranty. On each Distribution Date following
receipt of a Deficiency Notice from the Trustee pursuant to Section 4.02(a),
Fannie Mae shall as promptly as practicable remit to the Trustee for deposit
into the Policy Payments Account by wire transfer of immediately available
funds an amount equal to the related Fannie Mae Guaranty Payment Amount for
distribution to Holders of the Class A-1 Investor Certificates.
<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)
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and the Trustee, the Depositor
and the Certificate Registrar receive such security or indemnity as may be
required by them to save each of them harmless or (ii) any mutilated
Certificate is surrendered to the Certificate Registrar, then, in the absence
of notice to the Trustee or the Certificate Registrar that such Certificate
has been acquired by a protected purchaser, and if the requirements of Section
8-406 of the UCC are met and subject to Section 8-405 of the UCC, 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 or the Fannie Mae Guaranty; (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 or a plan subject to
Section 4975 of the Code, nor a Person acting on behalf of, or investing plan
assets of, any such plan, which representation letter shall not be an expense
of the Trustee, or (ii) 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 a
prohibited transaction under ERISA or Section 4975 of the Code, 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 or the Fannie Mae Guaranty; and (c) such proposed
successor Master Servicer is reasonably acceptable to the Credit Enhancer in
its sole discretion, following consultation with Fannie Mae (or if a Credit
Enhancer Condition is then existing, to Fannie Mae in lieu of 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, the Credit Enhancer and Fannie Mae. The Master Servicer shall have no
claim (whether by subrogation or otherwise) or other action against any
Certificateholder, the Credit Enhancer or Fannie Mae 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 either beyond the relevant Distribution Date
or 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, Fannie
Mae 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, the Credit Enhancer or Fannie Mae 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, Fannie Mae 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, following consultation with Fannie
Mae (or if a Credit Enhancer Condition is then existing, Fannie Mae in lieu of
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 or Fannie Mae, as
applicable, by notice then given in writing to the Master Servicer (and to the
Trustee if given by the Credit Enhancer, Fannie Mae 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, the Credit Enhancer and
Fannie Mae. 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 five or more Business Days or under Section
8.01(ii) for a period of 60 or more 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, Fannie Mae 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.
In connection with the termination of the Master Servicer if any Mortgage
is registered on the MERS(R) System, then, either (i) the successor Master
Servicer, including the Trustee if the Trustee is acting as successor Master
Servicer, shall represent and warrant that it is a member of MERS in good
standing and shall agree to comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the Mortgage Loans that
are registered with MERS, or (ii) the predecessor Master Servicer shall
cooperate with the successor Master Servicer in causing MERS to execute and
deliver an assignment of Mortgage in recordable form to transfer all the
Mortgages registered on the MERS(R) System from MERS to the Trustee and to
execute and deliver any other notices and documents appropriate to effect a
transfer of those Mortgages or the servicing of the Mortgage Loan on the
MERS(R) System to the successor Master Servicer. The predecessor Master
Servicer shall file any such assignment in the appropriate recording office.
The successor Master Servicer shall deliver the assignment to the Trustee or
the Custodian promptly upon receipt of the original with evidence of recording
thereon or a copy certified by the public recording office in which the
assignment was recorded.
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 in its sole discretion, following
consultation with Fannie Mae (or if a Credit Enhancer Condition is then
existing, to Fannie Mae in lieu of the Credit Enhancer), as evidenced by the
Credit Enhancer's or Fannie Mae's prior written consent, as applicable, 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 or the Fannie
Mae Guaranty. 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, the Credit Enhancer and Fannie Mae 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, Fannie Mae 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 if a
Credit Enhancer Condition is then existing, of Fannie Mae in lieu 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 if a Credit Enhancer
Condition is then existing, from Fannie Mae in lieu of 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, the Credit
Enhancer or Fannie Mae, pursuant to the provisions of this Agreement,
unless such Certificateholders, the Credit Enhancer or Fannie Mae 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 willful 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, or the sufficiency or
validity of MERS or the MERS(R) System, 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, Fannie Mae 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, Fannie Mae 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 (or if a Credit Enhancer Condition
is then existing, by Fannie Mae in lieu of 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 a Credit Enhancer
Condition is then existing, by Fannie Mae in lieu of 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 (or if a Credit Enhancer Condition is then existing,
Fannie Mae in lieu of the Credit Enhancer) may remove the Trustee. If the
Transferor, the Credit Enhancer or Fannie Mae 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 or
Fannie Mae, as applicable, 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, the Credit
Enhancer (or if a Credit Enhancer Condition is then existing, Fannie Mae in
lieu of 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, Fannie
Mae 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 (or if a Credit Enhancer Condition is then
existing, by Fannie Mae in lieu of 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 Fannie Mae 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
August 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, 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), and all
amounts due and owing to Fannie Mae for unpaid Guaranty Fees and unreimbursed
payments under the Fannie Mae Guaranty have been paid (together with interest
thereon as provided under the Side Letter Agreement).
(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), and all amounts due and
owing to Fannie Mae for unpaid Guaranty Fees and unreimbursed payments under
on the Fannie Mae Guaranty (together with interest thereon as provided in the
Side Letter 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 2.01(h) or 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,
the Credit Enhancer or Fannie Mae and which, in the case of clause (iii),
continues unremedied and continues to affect materially and adversely the
interests of the Certificateholders, the Credit Enhancer or Fannie Mae
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(f) or the action
specified in Section 2.04(b)(2)) 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, Fannie Mae 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, the Credit Enhancer or Fannie Mae 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, the Credit Enhancer or Fannie Mae
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,
Fannie Mae 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 and the Fannie Mae
Guaranty exceeds 1% of the aggregate of the Original Invested Amounts.
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 if a Credit Enhancer Condition is then
existing, Fannie Mae in lieu of 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, Fannie Mae 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, Fannie Mae 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 (or if a Credit Enhancer Condition is then
existing, of Fannie Mae in lieu of the Credit Enhancer) and, in the case of
any amendment pursuant to this paragraph that affects Fannie's rights or
obligations, of Fannie Mae (which consents 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, the Credit Enhancer or Fannie
Mae; 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 or the Fannie Mae Guaranty.
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 or the Fannie Mae Guaranty.
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,
the Credit Enhancer and Fannie Mae, 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 and
Fannie Mae, 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 or the Fannie Mae Guaranty 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 or Fannie Mae.
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 or Fannie Mae 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 and Fannie Mae for the reasonable out-of-pocket
costs and expenses incurred by them 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 and Fannie Mae.
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 Condition 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, and if a Credit Enhancer Condition exists and Fannie Mae
has not defaulted in its payment obligations under the Fannie Mae Guaranty,
then Fannie Mae shall have the right to exercise all rights of the Investor
Certificateholders of Class A-1 Certificates 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, 115 Broadway, New York,
New York 10006, Attention: Research and Risk Management, CWABS, Inc. Series
2000-B (telecopy number 212-312-3225), (e) in the case of Fannie Mae, 4000
Wisconsin Avenue, Washington, D.C. 20016, Attention: Director of Securities
Administration (telecopy number (202) 752-6536), (f) in the case of Moody's,
Residential Loan Monitoring Group, 4th Floor, 99 Church Street, New York, New
York 10007, and (g) 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 or Fannie Mae
refers to an Event of Servicing Termination or a claim under the Policy (or
pursuant to the Fannie Mae Guaranty in the case of Fannie Mae) or with respect
to which failure on the part of the Credit Enhancer or Fannie Mae 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 of the Credit Enhancer or of Fannie Mae, as appropriate, 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, Fannie Mae 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 and 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,
Fannie Mae 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: /s/ Michael Muir
-----------------------------------
Name: Michael Muir
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Sponsor and Master Servicer
By: /s/ Michael Muir
-----------------------------------
Name: Michael Muir
Title: Senior Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Barbara G. Grosse
-----------------------------------
Name: Barbara G. Grosse
Title: Vice President
and Assistant Secretary
FANNIE MAE
By: /s/ Sharon L. Stieber
-----------------------------------
Name: Sharon L. Steiber
Title: Vice President
<PAGE>
State of California )
) ss.:
County of Los Angeles )
On the 30th day of May, 2000 before me, a notary public in and for the
State of California, personally appeared Michael Muir, known to me who,
being by me duly sworn, did depose and say that he resides at Calabasas, CA;
that he is the Vice President 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.
/s/ Yolanda L. Fletcher
-----------------------------------
Notary Public
[Notarial Seal]
<PAGE>
State of California )
) ss.:
County of Los Angeles )
On the 30th day of May, 2000 before me, a notary public in and for
the State of California, personally appeared Michael Muir, known to me who,
being by me duly sworn, did depose and say that he resides at Calabasas, CA;
that he is the Senior Vice President 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.
/s/ Yolanda L. Fletcher
------------------------
Notary Public
[Notarial Seal]
<PAGE>
State of Illinois )
) ss.:
County of Cook )
On the 30th day of May, 2000 before me, a notary public in and for
the State of Illinois, personally appeared Barbara G. Grosse, known to me who,
being by me duly sworn, did depose and say that she resides at 1516 N. State
Pkwy, Chicago, IL 60610; that she is the Vice President of Bank One, National
Association, a national banking association, one of the parties that executed
the foregoing instrument; and that she 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
she signed her name thereto by like order.
/s/ Maria C. Birrueta
-----------------------------------
Notary Public
[Notarial Seal]
<PAGE>
State of District of Columbia)
) ss.:
County of ___________________)
On the 25th day of May, 2000 before me, a notary public in and for
the State of D.C., personally appeared Sharon L. Stieber, known to me who,
being by me duly sworn, did depose and say that she resides at 4000 Wisc.
Ave., N.W., Wash., D.C.; that she is the Vice President of Fannie Mae, one of
the parties that executed the foregoing instrument; that she 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 she signed her name thereto by like order.
/s/ Cecilia D. Blacutt
------------------------
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 : May [ ], 2000
Certificate No. : [o]
Cut-off Date : May [25], 2000
First Distribution
Date: : July 17, 2000
Maturity Date [_______]
<PAGE>
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 2000-B
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.] [Fannie Mae, in its capacity as Trustee
of Fannie Mae Grantor Trust 2000 - T3,] 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"), Bank One, National Association, as trustee (the "Trustee") and
Fannie Mae, 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 2000-B, 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 Additional Home Equity Loans) and all collections in respect
thereof received after the Cut-off Date or the Subsequent Cut-off Date, as
applicable (excluding payments due on or before 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 Fannie Mae Guaranty, (v)] 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
May[ ], 2000 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 or Fannie Mae. 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, Fannie Mae 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, Fannie Mae, 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 Fannie Mae 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 August 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.
<PAGE>
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 : May [ ], 2000
Cut-off Date : May [25], 2000
Percentage Interest : 100%
Certificate No. : [o]
First Distribution Date : [_______]
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 2000-B
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), Fannie Mae, 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 2000-B, 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 Additional
Home Equity Loans) 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 May [ ], 2000 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 or Fannie Mae. 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,
Fannie Mae 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, Fannie Mae, 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 Fannie Mae 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
August 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 2000-B,
Revolving Home Equity Loan Asset Backed Certificates,
Series 2000-B, 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 May [ ], 2000 (the "Agreement"), among CWABS,
Inc. as Depositor, Countrywide Home Loans, Inc., as Master Servicer, Bank One,
National Association, as Trustee and Fannie Mae. 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 2000-B,
Revolving Home Equity Loan Asset Backed Certificates,
Series 2000-B, 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 May [ ], 2000 among CWABS, Inc. as Depositor, Countrywide Home Loans, Inc.,
as Sponsor Master Servicer, Bank One, National Association, as Trustee and
Fannie Mae.
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
______________
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>
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.
______ 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
One 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 2000-B
----------------------------------------
Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee under the Pooling and Servicing Agreement dated as of May [ ],
2000, among CWABS, Inc. as Depositor, Countrywide Home Loans, Inc., as Sponsor
and Master Servicer, Fannie Mae, 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.:
-------
[MIN 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, Fannie Mae, and Bank One, National
Association, as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 2000-B
---------------------------------------------------------
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 delivered pursuant to Section 2.01(e) (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 or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the Sponsor stating that the original Mortgage
Note was lost, misplaced or destroyed, together with a copy of the
related Mortgage Note; and
(ii) unless the Mortgage Loan is registered on the MERS(R) System,
an original Assignment of Mortgage in blank in recordable form.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
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, Fannie Mae, and Bank One, National
Association, as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 2000-B
---------------------------------------------------------
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 delivered pursuant to Section 2.01(e) (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 or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the Sponsor stating that the original Mortgage
Note was lost, misplaced or destroyed, together with a copy of the
related Mortgage Note; and
(ii) unless the Mortgage Loan is registered on the MERS(R) System,
an original Assignment of Mortgage in blank in recordable form.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
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, Fannie Mae, and Bank One, National
Association, as Trustee, Revolving Home Equity Loan Asset
Backed Certificates, Series 2000-B
---------------------------------------------------------
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 or, if the original
Mortgage Note has been lost or destroyed and not replaced, an
original lost note affidavit from the Sponsor stating that the
original Mortgage Note was lost, misplaced or destroyed, together
with a copy of the related Mortgage Note;
(ii) unless the Mortgage Loan is registered on the MERS(R)System, an
original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage, noting the presence of the MIN of
the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan
if the Mortgage Loan is a MOM Loan, 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
copy certified by the appropriate county recording office where such Mortgage
is recorded;
(iv) if applicable, the original Intervening Assignments, if any, with
evidence of recording thereon, 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
copy certified 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.
<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 J
FORM OF TRANSFER DOCUMENT
The Seller hereby transfers to the Depositor, and the Depositor hereby
transfers to the Trustee for the benefit of the Countrywide Home Equity Loan
Trust 2000-B the below identified Additional Home Equity Loans.
Loan Group number: _____ [1 or 2]
Subsequent Closing Date: _________________
Subsequent Cut-off Date: __________________
Cut-off Date Asset Balance: $ ______________
Additional Home Equity Loans:
[Each of the Sponsor's funded Mortgage Loans owned by it for
securitization on the above referenced Subsequent Cut-off Date that qualify
for inclusion in Loan Group [1 or 2] sequentially by date beginning with the
earliest date on which any of them were funded, and within a date
alphabetically, are hereby transferred to Loan Group [1 or 2] until either
their aggregate Cut-off Date Asset Balance is as close as possible to equal to
the Cut-off Date Asset Balance indicated above without exceeding it or all of
the loans through the Subsequent Cut-off Date have been transferred.] [If this
Transfer Document is for Loan Group 2 Additional Home Equity Loans and a
Transfer Document for Loan Group 1 Additional Home Equity Loans is also being
delivered on the above Subsequent Closing Date, then the determination of the
Additional Home Equity Loans transferred by the Transfer Document for Loan
Group 1 Additional Home Equity Loans has been made before the determination of
the Additional Home Equity Loans transferred by this Transfer Document.]
This Transfer Document is delivered pursuant to the Purchase Agreement
and the Pooling and Servicing Agreement, dated as of May [ ], 2000, among
CWABS, Inc., Countrywide Home Loans, Inc., Fannie Mae, and Bank One, National
Association, and the capitalized terms used in this document have the meanings
given to them in that agreement.
Dated: __________, 2000.
COUNTRYWIDE HOME LOANS, INC. CWABS, INC.
By:___________________ By: ________________________
Name: Name:
Title: Title:
<PAGE>
EXHIBIT 99.2
_______________________________________________________________________________
CWABS, INC.
as Purchaser,
and
COUNTRYWIDE HOME LOANS, INC.
as Seller,
_____________________________
PURCHASE AGREEMENT
Dated as of May 25, 2000
_____________________________
Revolving Home Equity Loan Asset Backed Certificates
Series 2000-B
_______________________________________________________________________________
<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...............4
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties..........................5
Section 3.2. Seller Representations and Warranties Relating
to the Mortgage Loans..........................................6
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller.......................................12
ARTICLE V
SERVICING
Section 5.1. Servicing.....................................................13
ARTICLE VI
TERMINATION
Section 6.1. Termination...................................................13
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Amendment.....................................................13
Section 7.2. Governing Law.................................................13
Section 7.3. Notices.......................................................13
Section 7.4. Severability of Provisions....................................14
Section 7.5. Counterparts..................................................14
Section 7.6. Further Agreements............................................14
Section 7.7. Successors and Assigns: Assignment of Purchase
Agreement.....................................................14
Section 7.8. Survival......................................................14
<PAGE>
PURCHASE AGREEMENT, dated as of May 25, 2000 (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
certain other notes or other evidence of indebtedness made or to be made in
the future, and Related Documentation (as defined below) (collectively, the
"Mortgage Loans"); and
WHEREAS, on or prior to the date of the transfer thereof, the Seller
shall own 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 May 25, 2000 (the "Pooling and Servicing Agreement") among the
Purchaser, as depositor, the Seller, as sponsor and master servicer, Bank One,
National Association, as trustee (the "Trustee"), and Fannie Mae, 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.
(a) The Initial 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 Initial Mortgage Loan, including its Asset Balance
(including all Additional Balances) and all collections in respect thereof
received after the Cut-off Date (excluding payments 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. By the sale of the Mortgage Loan and its
Additional Balances, the Seller has sold to the Purchaser, and the Purchaser
has purchased from the Seller, each Draw. The Purchaser shall pay the Seller
for each Draw in cash in an amount equal to the principal amount of the Draw
as it arises. The Trust, the Seller, and the Purchaser may agree to a netting
arrangement in connection with this transaction, when appropriate, rather than
actually moving cash.
(b) The Additional Home Equity Loans. The Purchaser may use the
funds in each Additional Loan Account to purchase Additional Home Equity Loans
for the related Loan Group on any Subsequent Closing Date designated by the
Purchaser on or before June 8, 2000. On each Subsequent Closing Date, the
Seller shall deliver a Transfer Document (properly completed and executed by
the Seller) to the Purchaser. Upon delivery of a Transfer Document, the Seller
hereby transfers, assigns, sets over and otherwise conveys to the Purchaser
without recourse, and the Purchaser purchases and shall effect payment for,
all of its right, title and interest in and to each Additional Home Equity
Loan identified in the Transfer Document, including its Asset Balance
(including all Additional Balances) and all collections in respect thereof
received after the relevant Subsequent Cut-off Date (excluding payments due on
or prior to the Subsequent Cut-off Date) and 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:
(a) by the Closing Date, to deliver to the Purchaser a Mortgage Loan
Schedule containing a true and complete list of all Initial Mortgage Loans
specifying for each Initial Mortgage Loan, among other things, as of the
Cut-off Date (i) its account number and (ii) the related Cut-off Date Asset
Balance;
(b) by the Closing Date for the Initial Mortgage Loans, and by each
Subsequent Closing Date for the related Additional Home Equity Loans, 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;
(c) by each Subsequent Closing Date, to deliver to the Purchaser, or
at the Purchaser's direction to the Trustee, an Officer's Certificate
confirming the satisfaction of each of the conditions precedent in Section
2.01(c) of the Pooling and Servicing Agreement; and
(d) within 15 days following each Subsequent Closing Date, to
deliver to the Purchaser, or at the Purchaser's direction to the Trustee, a
revised Mortgage Loan Schedule reflecting the addition of the Additional Home
Equity Loans.
The initial 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 Purchaser, or at the Purchaser's direction to the Trustee (a) on the
Closing Date, with respect to not less than 50% of the Initial Mortgage Loans,
(b) within 30 days following the Closing Date, with respect to the remaining
Initial Mortgage Loans, and (c) within 30 days following the related
Subsequent Closing Date, with respect to the Additional Home Equity Loans, the
following documents or instruments with respect to each Mortgage Loan (the
"Related Documentation"):
(i) the original Mortgage Note endorsed in blank or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original lost
note affidavit from the Seller stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the related Mortgage
Note;
(ii) unless the Mortgage Loan is registered on the MERS(R)System, an
original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage, noting the presence of the MIN
of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan, 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 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, with
evidence of recording thereon, 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 Initial Mortgage Loans maintained by the Seller to be clearly and
unambiguously marked to indicate that the Initial Mortgage Loans have been
sold to the Trustee, as assignee of the Purchaser. By the relevant Subsequent
Closing Date or applicable date of substitution, as applicable, the Seller
shall cause the portions of the Electronic Ledgers relating to the relevant
Additional Home Equity Loans or Eligible Substitute Mortgage Loans, as the
case may be, to be clearly and unambiguously marked, and shall make
appropriate entries in its general accounting records, to indicate that such
Mortgage Loans have been transferred to the Trust at the direction 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.
(a) In consideration of the sale of the Initial 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 $486,018,204.60, and to transfer to the Seller on the
Closing Date the Transferor Certificates.
(b) In consideration of the sale of the Additional Home Equity Loans
from the Seller to the Purchaser on each Subsequent Closing Date, the
Purchaser agrees to cause the Trustee to pay to the Seller when the conditions
to the release of the purchase price for the Additional Home Equity Loans
under the Pooling and Servicing Agreement have been met an amount equal to
their Cut-off Date Asset Balance.
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 with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, and the applicable date of substitution with respect to any
Eligible Substitute Mortgage Loan, 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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and 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 or Subsequent Cut-off Date, as applicable), 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 Section 2.01(a) or (b), as applicable, 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 or the Pooling and Servicing 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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Mortgage Loan has not been assigned or
pledged, and the Seller is its sole owner and holder 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 Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity 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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 relevant Subsequent Cut-off Date or
the date of substitution, as applicable, 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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity 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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage Loans, the relevant Subsequent Closing
Date with respect to any Additional Home Equity 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 on an Initial Mortgage Loan is
more than 59 days delinquent (measured on a contractual basis) and no Minimum
Monthly Payment on any other Mortgage Loan being transferred on the relevant
date is more than 30 days delinquent (measured on a contractual basis) and no
more than 2.98% of the Initial Mortgage Loans in Loan Group 1 being
transferred on the relevant date and no more than 1.39% of the Initial
Mortgage Loans in Loan Group 2 being transferred on the relevant date (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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, 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, and the servicing practices used by the Seller with respect to
each Mortgage Loan have been consistent with the practices and the degree of
skill and care the Seller exercises in servicing for itself loans that it owns
that are comparable to the Mortgage Loans;
(xiv) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, either a lender's title
insurance policy or binder was issued on the date of origination of the
Mortgage Loan being transferred on the relevant date 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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial Mortgage Loans in
Loan Group 1 and for the Initial Mortgage Loans in Loan Group 2 no more than
0.30% and 0.31%, respectively, of such Mortgage Loans, by aggregate principal
balance, are secured by Mortgaged Properties located in one United States
postal zip code;
(xvii) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the Combined Loan-to-Value
Ratio for each Mortgage Loan was not in excess of 100%;
(xviii) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no selection procedure
reasonably believed by the Seller to be adverse to the interests of the
Certificateholders, the Credit Enhancer or Fannie Mae was utilized in
selecting the Mortgage Loans;
(xix) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the Seller has not
transferred the Mortgage Loans to the Purchaser with any intent to hinder,
delay or defraud any of its creditors;
(xx) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, 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) By the Closing Date with respect to the Initial Mortgage
Loans and, to the extent not already included in such filing with respect to
the Mortgage Loans within 30 days of the relevant Subsequent Closing Date with
respect to any Additional Home Equity Loans, and within 30 days of 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 relevant Mortgage Loans;
(xxii) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, 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
Initial Mortgage Loans in Loan Group 1 and the Initial Mortgage Loans in Loan
Group 2 on a contractual basis as of the Cut-off Date for the Initial Mortgage
Loans is approximately 294.53 months and 297.31 months, respectively. On each
date that the Loan Rates have been adjusted, interest rate adjustments on the
Initial Mortgage Loans were made in compliance with the related Mortgage and
Mortgage Note and applicable law. Over the term of each Initial Mortgage Loan,
the Loan Rate may not exceed the related Loan Rate Cap, if any. The Loan Rate
Caps for the Initial Mortgage Loans in Loan Group 1 range between 11.750% and
26.000% and the weighted average Loan Rate Cap for Loan Group 1 is
approximately 17.854%. The Loan Rate Caps for the Initial Mortgage Loans in
Loan Group 2 range between 12.750% and 18.000% and the weighted average Loan
Rate Cap for Loan Group 2 is approximately 17.913%. The Gross Margins for the
Initial Mortgage Loans in Loan Group 1 range between 0.000% and 7.000% and the
weighted average Gross Margin is approximately 2.039% as of the Cut-off Date
for the Initial Mortgage Loans in Loan Group 1. The Gross Margins for the
Initial Mortgage Loans in Loan Group 2 range between -1.750% and 8.650% and
the weighted average Gross Margin is approximately 2.046% as of the Cut-off
Date for the Initial Mortgage Loans in Loan Group 2. The Loan Rates on the
Initial Mortgage Loans in Loan Group 1 range between 5.875% and 14.000% and
the weighted average Loan Rate on the Initial Mortgage Loans in Loan Group 1
is approximately 8.002%. The Loan Rates on the Initial Mortgage Loans in Loan
Group 2 range between 5.990% and 14.500% and the weighted average Loan Rate on
the Initial Mortgage Loans in Loan Group 2 is approximately 8.058%.
(xxvi) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity 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 21.04% (by Cut-off Date Loan Group
Balance) of the Initial Mortgage Loans in Loan Group 1 and no more than 21.58%
(by Cut-off Date Loan Group Balance) of the Initial 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 78.96% (by Cut-off Date Loan Group
Balance) of the Initial Mortgage Loans in Loan Group 1 and 78.42% (by Cut-off
Date Loan Group Balance) of the Initial 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 Initial Mortgage Loans in
Loan Group 1 range between approximately $6,100.00 and $219,160.00 with an
average of approximately $34,216.34. The Credit Limits on the Initial Mortgage
Loans in Loan Group 2 range between approximately $7,000.00 and $1,000,000.00
with an average of approximately $57,318.88. As of the Cut-off Date for the
Initial Mortgage Loans, no Initial Mortgage Loan in Loan Group 1 had a
principal balance in excess of approximately $209,200.00 and no Initial
Mortgage Loan in Loan Group 2 had a principal balance in excess of
approximately $1,000,000.00 and the average principal balance of the Initial
Mortgage Loans in Loan Group 1 and Loan Group 2 is equal to approximately
$24,111.84 and $43,977.53, respectively;
(xxix) Approximately 3.39% and 96.61% of the Initial Mortgage
Loans in Loan Group 1, by aggregate principal balance as of the Cut-off Date
for the Initial Mortgage Loans, are first and second liens, respectively.
Approximately 3.57% and 96.43% of the Initial Mortgage Loans in Loan Group 2,
by aggregate principal balance as of the Cut-off Date for the Initial Mortgage
Loans, are first and second liens, respectively;
(xxx) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, and the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, 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.
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, Fannie Mae 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, subject to the requirements of
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, the Credit Enhancer and Fannie Mae.
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, Fannie Mae 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 (or if a Credit Enhancer Condition is then existing, of Fannie Mae in
lieu of the Credit Enhancer) and, if its interests are materially affected,
Fannie Mae, 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, the Credit Enhancer and Fannie Mae.
The obligations of the Seller under this Agreement cannot be assigned or
delegated to a third party without the consent of the Purchaser and the Credit
Enhancer (or if a Credit Enhancer Condition is then existing, Fannie Mae in
lieu of the Credit Enhancer), 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, the Credit Enhancer or Fannie Mae under the Pooling and Servicing
Agreement. Such enforcement of a right or remedy by the Trustee or the Credit
Enhancer or Fannie Mae 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: /s/ Michael Muir
-------------------------------
Name: Michael Muir
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: /s/ Michael Muir
--------------------------------
Name: Michael Muir
Title: Senior Vice President
<PAGE>
Schedule I
SCHEDULE OF
MORTGAGE LOANS
--------------
[Delivered to the Trustee only]
<PAGE>
STATE OF California )
) ss.:
COUNTY OF Los Angeles )
On the 30th day of May 2000 before me, a Notary Public in and for said
State, personally appeared Michael Muir, known to me to be a Vice President
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.
/s/ Yolanda L. Fletcher
------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF California )
) ss.:
COUNTY OF Los Angeles )
On the 30th day of May 2000 before me, Michael Muir 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.
/s/ Yolanda L. Fletcher
-----------------------------------
Notary Public
[Notarial Seal]
