-----------------------------------------------------------------
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): June 29, 1998
CWABS, INC., (as depositor under the Pooling and Servicing Agreement, dated as
of June 1, 1998, providing for the issuance of the CWABS, INC. Mortgage
Pass-Through Certificates, Series 1998-13).
CWABS, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-37539 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.
- ---- ------------
On June 29, 1998, CWABS, Inc. (the "Company") entered into a Pooling
and Servicing Agreement dated as of June 1, 1998 (the "Pooling and Servicing
Agreement"), by and among the Company, as depositor, Countrywide Home Loans,
Inc. ("CHL"), as seller and as master servicer, and The Bank of New York, as
trustee (the "Trustee"), providing for the issuance of the Company's Mortgage
Pass-Through Certificates, Series 1998-13. The Pooling and Servicing Agreement
is annexed hereto as Exhibit 99.1.
<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 June 1,
1998, by and among the Company, CHL and the Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CWABS, INC.
By: /s/ David Walker
------------------------------
David Walker
Vice President
Dated: July 16, 1998
Exhibit Index
-------------
Exhibit Page
- ------- ----
99.1. Pooling and Servicing Agreement,
dated as of June 1, 1998, by
and among, the Company, CHL
and the Trustee. 6
4
<PAGE>
EXHIBIT 99.1
------------
==========================================================================
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller and Master Servicer
and
THE BANK OF NEW YORK,
Trustee
______________________
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1998
______________________
MORTGAGE PASS-THROUGH CERTIFICATES, Series 1998-13
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................I-1
Accretion Directed Certificates.................................I-1
Accrual Amount..................................................I-1
Accrual Components..............................................I-1
Adjusted Mortgage Rate..........................................I-1
Adjusted Net Mortgage Rate......................................I-1
Advance.........................................................I-1
Agreement.......................................................I-1
Allocable Share.................................................I-1
Amount Available for Senior Principal...........................I-2
Amount Held for Future Distribution.............................I-2
Applicable Credit Support Percentage............................I-2
Appraised Value.................................................I-2
Available Funds.................................................I-2
Bankruptcy Code.................................................I-3
Bankruptcy Coverage Termination Date............................I-3
Bankruptcy Loss.................................................I-3
Bankruptcy Loss Coverage Amount.................................I-3
Blanket Mortgage................................................I-3
Book-Entry Certificates.........................................I-3
Business Day....................................................I-3
Certificate.....................................................I-3
Certificate Account.............................................I-3
Certificate Balance.............................................I-4
Certificate Owner...............................................I-4
Certificate Register............................................I-4
Certificateholder or Holder.....................................I-4
Class...........................................................I-4
Class Certificate Balance.......................................I-4
Class Interest Shortfall........................................I-4
Class Optimal Interest Distribution Amount......................I-5
Class PO Deferred Amount........................................I-5
Class Subordination Percentage..................................I-5
Class Unpaid Interest Amounts...................................I-5
Closing Date....................................................I-5
Code............................................................I-5
COFI............................................................I-5
COFI Certificates...............................................I-5
Component.......................................................I-5
<PAGE>
Component Balance...............................................I-5
Component Certificates..........................................I-5
Cooperative Corporation.........................................I-6
Coop Shares.....................................................I-6
Cooperative Loan................................................I-6
Cooperative Property............................................I-6
Cooperative Unit................................................I-6
Corporate Trust Office..........................................I-6
Corresponding Classes of Certificates...........................I-6
Cut-off Date....................................................I-6
Cut-off Date Pool Principal Balance.............................I-6
Cut-off Date Principal Balance..................................I-6
Debt Service Reduction..........................................I-6
Defective Mortgage Loan.........................................I-6
Deficient Valuation.............................................I-7
Definitive Certificates.........................................I-7
Delay Certificates..............................................I-7
Delay Delivery Mortgage Loans...................................I-7
Deleted Mortgage Loan...........................................I-7
Denomination....................................................I-7
Depositor.......................................................I-7
Depository......................................................I-7
Depository Participant..........................................I-7
Determination Date..............................................I-7
Discount Mortgage Loan..........................................I-7
Distribution Account............................................I-8
Distribution Account Deposit Date...............................I-8
Distribution Date...............................................I-8
Due Date........................................................I-8
Duff & Phelps...................................................I-8
Eligible Account................................................I-8
ERISA...........................................................I-8
ERISA-Restricted Certificate....................................I-9
Escrow Account..................................................I-9
Event of Default................................................I-9
Excess Loss.....................................................I-9
Excess Proceeds.................................................I-9
Expense Rate....................................................I-9
FDIC............................................................I-9
FHLMC...........................................................I-9
FIRREA..........................................................I-9
Fitch...........................................................I-9
FNMA............................................................I-9
Fraud Loan......................................................I-10
ii
<PAGE>
Fraud Losses....................................................I-10
Fraud Loss Coverage Amount......................................I-10
Fraud Loss Coverage Termination Date............................I-10
Index...........................................................I-10
Indirect Participant............................................I-10
Initial Bankruptcy Coverage Amount..............................I-10
Initial Component Balance.......................................I-10
Insurance Policy................................................I-10
Insurance Proceeds..............................................I-10
Insured Expenses................................................I-10
Interest Accrual Period.........................................I-10
Interest Determination Date.....................................I-11
Latest Possible Maturity Date...................................I-11
Lender PMI Mortgage Loan........................................I-11
LIBOR...........................................................I-11
LIBOR Certificates..............................................I-11
Liquidated Mortgage Loan........................................I-11
Liquidation Proceeds............................................I-11
Loan-to-Value Ratio.............................................I-11
Lost Mortgage Note..............................................I-11
Maintenance.....................................................I-12
Majority in Interest............................................I-12
Master Servicer.................................................I-12
Master Servicer Advance Date....................................I-12
Master Servicing Fee............................................I-12
Master Servicing Fee Rate.......................................I-12
Monthly Statement...............................................I-12
Moody's.........................................................I-12
Mortgage........................................................I-12
Mortgage File...................................................I-12
Mortgage Loans..................................................I-12
Mortgage Loan Schedule..........................................I-13
Mortgage Note...................................................I-14
Mortgage Rate...................................................I-14
Mortgaged Property..............................................I-14
Mortgagor.......................................................I-14
National Cost of Funds Index....................................I-14
Net Prepayment Interest Shortfalls..............................I-14
Non-Delay Certificates..........................................I-14
Non-Discount Mortgage Loan......................................I-14
Non-PO Formula Principal Amount.................................I-14
Non-PO Percentage...............................................I-15
Nonrecoverable Advance..........................................I-15
Notice of Final Distribution....................................I-15
iii
<PAGE>
Notional Amount.................................................I-15
Notional Amount Certificates....................................I-15
Offered Certificates............................................I-15
Officer's Certificate...........................................I-15
Opinion of Counsel..............................................I-15
Optional Termination............................................I-16
Original Applicable Credit Support Percentage...................I-16
Original Mortgage Loan..........................................I-16
Original Subordinated Principal Balance.........................I-16
OTS.............................................................I-16
Outside Reference Date..........................................I-16
Outstanding.....................................................I-16
Outstanding Mortgage Loan.......................................I-16
Ownership Interest..............................................I-16
Pass-Through Rate...............................................I-17
Percentage Interest.............................................I-17
Permitted Investments...........................................I-17
Permitted Transferee............................................I-18
Person..........................................................I-19
Physical Certificate............................................I-19
Planned Balance.................................................I-19
Planned Principal Classes.......................................I-19
PO Formula Principal Amount.....................................I-19
PO Percentage...................................................I-19
Pool Stated Principal Balance...................................I-20
Prepayment Interest Excess......................................I-20
Prepayment Interest Shortfall...................................I-20
Prepayment Period...............................................I-20
Prepayment Shift Percentage.....................................I-20
Primary Insurance Policy........................................I-20
Primary Planned Principal Classes...............................I-20
Principal Prepayment............................................I-20
Principal Prepayment in Full....................................I-20
Priority Amount.................................................I-21
Priority Percentage.............................................I-21
Private Certificate.............................................I-21
Pro Rata Share..................................................I-21
Proprietary Lease...............................................I-21
Prospectus Supplement...........................................I-21
PUD.............................................................I-21
Purchase Price..................................................I-21
Qualified Insurer...............................................I-21
Rating Agency...................................................I-22
Realized Loss...................................................I-22
iv
<PAGE>
Recognition Agreement...........................................I-22
Record Date.....................................................I-22
Reference Bank..................................................I-22
Refinancing Mortgage Loan.......................................I-22
Regular Certificates............................................I-22
Relief Act......................................................I-23
Relief Act Reductions...........................................I-23
REMIC...........................................................I-23
REMIC Change of Law.............................................I-23
REMIC Provisions................................................I-23
REO Property....................................................I-23
Request for Release.............................................I-23
Required Coupon.................................................I-23
Required Insurance Policy.......................................I-23
Residual Certificates...........................................I-23
Responsible Officer.............................................I-23
Restricted Classes..............................................I-23
Scheduled Balances..............................................I-24
Scheduled Classes...............................................I-24
Scheduled Payment...............................................I-24
Scheduled Principal Distribution Amount.........................I-24
Secondary Planned Principal Clauses.............................I-24
Securities Act..................................................I-24
Seller..........................................................I-24
Senior Certificates.............................................I-24
Senior Credit Support Depletion Date............................I-24
Senior Percentage...............................................I-24
Senior Prepayment Percentage....................................I-24
Senior Principal Distribution Amount............................I-25
Senior Step Down Conditions.....................................I-25
Servicing Advances..............................................I-25
Servicing Officer...............................................I-26
Shift Percentage................................................I-26
Special Hazard Coverage Termination Date........................I-26
Special Hazard Loss.............................................I-26
Special Hazard Loss Coverage Amount.............................I-27
Special Hazard Mortgage Loan....................................I-27
S&P.............................................................I-27
Startup Day.....................................................I-27
Stated Principal Balance........................................I-27
Streamlined Documentation Mortgage Loan.........................I-28
Subordinated Certificates.......................................I-28
Subordinated Percentage.........................................I-28
Subordinated Prepayment Percentage..............................I-28
v
<PAGE>
Subordinated Principal Distribution Amount......................I-28
Subservicer.....................................................I-28
Substitute Mortgage Loan........................................I-28
Substitution Adjustment Amount..................................I-28
Support Classes.................................................I-29
Targeted Balances...............................................I-29
Targeted Principal Classes......................................I-29
Tax Matters Person..............................................I-29
Tax Matters Person Certificate..................................I-29
Transfer........................................................I-29
Trustee.........................................................I-29
Trustee Fee.....................................................I-29
Trustee Fee Rate................................................I-29
Trust Fund......................................................I-29
Unscheduled Principal Distribution Amount.......................I-29
Voting Rights...................................................I-30
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES.......................II-1
SECTION 2.01. Conveyance of Mortgage Loans.....................II-1
SECTION 2.02. Acceptance by Trustee of the Mortgage
Loans............................................II-4
SECTION 2.03. Representations, Warranties and Covenants
of the Seller and Master Servicer................II-6
SECTION 2.04. Representations and Warranties of the
Depositor as to the Mortgage Loans...............II-8
SECTION 2.05. Delivery of Opinion of Counsel in
Connection with Substitutions....................II-9
SECTION 2.06. Execution and Delivery of Certificates...........II-10
SECTION 2.07. REMIC Matters....................................II-10
SECTION 2.08. Covenants of the Master Servicer.................II-10
ARTICLE III ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS...................................III-1
SECTION 3.01. Master Servicer to Service Mortgage
Loans............................................III-1
SECTION 3.02. Subservicing; Enforcement of the
Obligations of Servicers.........................III-2
SECTION 3.03. Rights of the Depositor and the Trustee in
Respect of the Master Servicer...................III-2
SECTION 3.04. Trustee to Act as Master Servicer................III-3
vi
<PAGE>
SECTION 3.05. Collection of Mortgage Loan Payments;
Certificate Account; Distribution Account........III-3
SECTION 3.06. Collection of Taxes, Assessments and
Similar Items; Escrow Accounts...................III-6
SECTION 3.07. Access to Certain Documentation and
Information Regarding the Mortgage
Loans............................................III-7
SECTION 3.08. Permitted Withdrawals from the Certificate
Account and Distribution Account.................III-7
SECTION 3.09. Maintenance of Hazard Insurance;
Maintenance of Primary Insurance Policies........III-9
SECTION 3.10. Enforcement of Due-on-Sale Clauses;
Assumption Agreements............................III-11
SECTION 3.11. Realization Upon Defaulted Mortgage
Loans; Repurchase of Certain Mortgage
Loans............................................III-12
SECTION 3.12. Trustee to Cooperate; Release of Mortgage
Files............................................III-15
SECTION 3.13. Documents Records and Funds in
Possession of Master Servicer to be Held
for the Trustee..................................III-16
SECTION 3.14. Servicing Compensation...........................III-16
SECTION 3.15. Access to Certain Documentation..................III-17
SECTION 3.16. Annual Statement as to Compliance................III-17
SECTION 3.17. Annual Independent Public Accountants'
Servicing Statement; Financial Statements........III-17
SECTION 3.18. Errors and Omissions Insurance; Fidelity
Bonds............................................III-18
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY
THE MASTER SERVICER..............................IV-1
SECTION 4.01. Advances.........................................IV-1
SECTION 4.02. Priorities of Distribution.......................IV-1
SECTION 4.03. [Reserved].......................................IV-6
SECTION 4.04. Allocation of Realized Losses....................IV-6
SECTION 4.05. [Reserved].......................................IV-7
SECTION 4.06. Monthly Statements to Certificateholders.........IV-7
SECTION 4.07. Determination of Pass-Through Rates for
COFI Certificates................................IV-9
SECTION 4.08. Determination of Pass-Through Rates for
LIBOR Certificates...............................IV-11
vii
<PAGE>
ARTICLE V THE CERTIFICATES.................................V-1
SECTION 5.01. The Certificates.................................V-1
SECTION 5.02. Certificate Register; Registration of
Transfer and Exchange of Certificates............V-1
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.....................................V-6
SECTION 5.04. Persons Deemed Owners............................V-7
SECTION 5.05. Access to List of Certificateholders'
Names and Addresses..............................V-7
SECTION 5.06. Maintenance of Office or Agency..................V-7
ARTICLE VI THE DEPOSITOR AND THE
MASTER SERVICER..................................VI-1
SECTION 6.01. Respective Liabilities of the Depositor and
the Master Servicer..............................VI-1
SECTION 6.02. Merger or Consolidation of the Depositor
or the Master Servicer...........................VI-1
SECTION 6.03. Limitation on Liability of the Depositor,
the Seller, the Master Servicer and Others.......VI-1
SECTION 6.04. Limitation on Resignation of Master
Servicer.........................................VI-2
ARTICLE VII DEFAULT..........................................VII-1
SECTION 7.01. Events of Default................................VII-1
SECTION 7.02. Trustee to Act; Appointment of Successor.........VII-2
SECTION 7.03. Notification to Certificateholders...............VII-4
ARTICLE VIII CONCERNING THE TRUSTEE...........................VIII-1
SECTION 8.01. Duties of Trustee................................VIII-1
SECTION 8.02. Certain Matters Affecting the Trustee............VIII-2
SECTION 8.03. Trustee Not Liable for Certificates or
Mortgage Loans...................................VIII-3
SECTION 8.04. Trustee May Own Certificates.....................VIII-3
SECTION 8.05. Trustee's Fees and Expenses......................VIII-3
SECTION 8.06. Eligibility Requirements for Trustee.............VIII-4
SECTION 8.07. Resignation and Removal of Trustee...............VIII-4
SECTION 8.08. Successor Trustee................................VIII-5
SECTION 8.09. Merger or Consolidation of Trustee...............VIII-6
SECTION 8.10. Appointment of Co-Trustee or Separate
Trustee..........................................VIII-6
viii
<PAGE>
SECTION 8.11. Tax Matters......................................VIII-8
SECTION 8.12. Periodic Filings.................................VIII-10
ARTICLE IX TERMINATION......................................IX-1
SECTION 9.01. Termination upon Liquidation or Purchase
of all Mortgage Loans............................IX-1
SECTION 9.02. Final Distribution on the Certificates...........IX-1
SECTION 9.03. Additional Termination Requirements..............IX-2
ARTICLE X MISCELLANEOUS PROVISIONS.........................X-1
SECTION 10.01. Amendment........................................X-1
SECTION 10.02. Recordation of Agreement; Counterparts...........X-2
SECTION 10.03. Governing Law....................................X-3
SECTION 10.04. Intention of Parties.............................X-3
SECTION 10.05. Notices..........................................X-3
SECTION 10.06. Severability of Provisions.......................X-4
SECTION 10.07. Assignment.......................................X-5
SECTION 10.08. Limitation on Rights of Certificateholders.......X-5
SECTION 10.09. Inspection and Audit Rights......................X-6
SECTION 10.10. Certificates Nonassessable and Fully Paid........X-6
ix
<PAGE>
SCHEDULES
Schedule I: Mortgage Loan Schedule..............................S-I-1
Schedule II: Representations and Warranties
of the Seller/Master Servicer.......................S-II-1
Schedule III: Representations and Warranties as to the
Mortgage Loans......................................S-III-1
Schedule IV: Principal Balances Schedule [if applicable].........S-IV-1
Schedule V: Form of Monthly Master Servicer Report..............S-V-1
EXHIBITS
Exhibit A: Form of Senior Certificate
(excluding Notional Amount Certificates)............A-1
Exhibit B: Form of Subordinated Certificate....................B-1
Exhibit C: Form of Class A-R Certificate.......................C-1
Exhibit D: Form of Notional Amount Certificate.................D-1
Exhibit E: Form of Reverse of Certificates.....................E-1
Exhibit F: Form of Initial Certification.......................F-1
Exhibit G: Form of Delay Delivery Certification................G-1
Exhibit H: Form of Final Certification of Trustee..............H-1
Exhibit I: Transfer Affidavit..................................I-1
Exhibit J: Form of Transferor Certificate......................J-1
Exhibit K: Form of Investment Letter [Non-Rule 144A]...........K-1
Exhibit L: Form of Rule 144A Letter............................L-1
Exhibit M: Request for Release.................................M-1
Exhibit N: Request for Release (Mortgage Loan) Paid
in Full, Repurchased and Replaced)..................N-1
Exhibit O: Form of Financial Guaranty Insurance Policy.........O-1
x
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of June 1, 1998, among
CWABS, INC., a Delaware corporation, as depositor (the "Depositor"), COUNTRYWIDE
HOME LOANS, INC., a New York corporation, as seller (in such capacity, the
"Seller") and as master servicer (in such capacity, the "Master Servicer"), and
THE BANK OF NEW YORK, a banking corporation organized under the laws of the
State of New York, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of a single REMIC. The Certificates will represent the
entire beneficial ownership interest in the Trust Fund. The Regular Certificates
will represent the "regular interests" in the Trust Fund and the Residual
Certificates will represent the single "residual interest" in the Trust Fund.
The "latest possible maturity date" for federal income tax purposes of all
interests created hereby will be the Latest Possible Maturity Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a different amount and, in addition, one
Residual Certificate representing the Tax Matters Person Certificate may be
issued in a different amount):
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
Initial Class Pass-Through Minimum Integral
Certificate Rate Denomination Multiples
Balance in Excess of
Minimum
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A-1 $141,000,348 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class A-2 $28,329,000 6.75% $1,000 $1,000
- ---------------------------------------------------------------------------------------------
Class A-3 $20,305,588 (1) $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class A-4 $35,032,261 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class A-5 $52,070,000 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class A-6 $21,430,180 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class A-7 $29,999,900 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class A-8 $5,264,412 (1) $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class PO $250,498 (3) $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class X (2) (4) $25,000(5) $1,000(5)
- ---------------------------------------------------------------------------------------------
Class A-R $100.00 6.75% $100 N/A
- ---------------------------------------------------------------------------------------------
Class M $8,232,500 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class B-1 $3,678,400 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class B-2 $1,576,400 6.75% $25,000 $1,000
- ---------------------------------------------------------------------------------------------
Class B-3 $1,401,300 6.75% $100,000 $1,000
- ---------------------------------------------------------------------------------------------
Class B-4 $700,600 6.75% $100,000 $1,000
- ---------------------------------------------------------------------------------------------
Class B-5 $1,051,124.03 6.75% $100,000 $1,000
===============================================================================================
</TABLE>
--------------------
(1) The Class A-3 and Class A-8 Certificates will bear interest during
the initial Interest Accrual Period at the applicable Initial
Pass-Through Rate set forth below, and will bear interest during each
Interest Accrual Period thereafter, subject to the applicable Maximum
and Minimum Pass-Through Rates, at the per annum rate determined as
described below:
<TABLE>
<CAPTION>
====================================================================================================================
Initial Maximum/Minimum Formula for Calculation of
Class Pass-Through Pass-Through Rate Pass-Through Rate
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A-3 6.50625% 8.50%/0.85% LIBOR + 85 basis points
- --------------------------------------------------------------------------------------------------------------------
A-8 7.69018% 29.507143%/0.00% 29.507143% - (3.857143 x LIBOR)
====================================================================================================================
</TABLE>
(2) The Class X Certificates will be Notional Amount Certificates, will
have no principal balance and will bear interest on their Notional
Amount (initially $331,667,421).
<PAGE>
(3) The Class PO Certificates will be Principal Only Certificates and will
not bear interest.
(4) The Pass-Through Rate for the Class X Certificates for any Distribution
Date will be equal to the excess of (a) the average of the Adjusted Net
Mortgage Rates of the NonDiscount Mortgage Loans, weighted on the basis
of their respective Stated Principal Balances over (b) 6.75% per annum.
The Pass-Through Rate of the Class X Certificates for the first
Distribution Date is 0.545%.
(5) Minimum Denomination is based on the Notional Amount of such Class.
Set forth below are designations of Classes of Certificates to the categories
used herein:
Accretion Directed
Certificates......................... None.
Accrual Components................... None.
Book-Entry Certificates.............. All Classes of Certificates other than
the Physical Certificates.
Component Certificates............... None.
Components........................... For purposes of calculating
distributions, the Component Certificates
will be comprised of multiple payment
components having the designations,
Initial Component Balances and Pass-
Through Rates set forth below:
Initial
Component
Designation Balance Pass-Through Rate
----------- --------- -----------------
N/A N/A N/A
Delay Certificates................... All interest-bearing Classes of
Certificates other than the
Non-Delay Certificates, if any.
ERISA-Restricted
Certificates......................... Class PO and Class X Certificates,
Residual Certificates and
Subordinated Certificates.
Floating Rate Certificates........... Class A-3 Certificates.
Inverse Floating Rate
Certificates......................... Class A-8 Certificates.
COFI Certificates.................... None.
<PAGE>
LIBOR Certificates................... Class A-3 and Class A-8 Certificates.
Non-Delay Certificates............... None.
Notional Amount
Certificates......................... Class X Certificates.
Offered Certificates................. All Classes of Certificates other than
the Private Certificates.
Physical Certificates................ Class PO Certificates and the Private
Certificates and Residual Certificates.
Planned Principal Classes............ None.
Primary Planned Principal
Classes.............................. None.
Principal Only
Certificates......................... Class PO Certificates.
Private Certificates................. Class B-3, Class B-4 and Class B-5
Certificates.
Rating Agencies...................... S&P and Duff & Phelps.
Regular Certificates................. All Classes of Certificates, other than
the Residual Certificates.
Residual Certificates................ Class A-R Certificates.
Scheduled Principal
Classes.............................. None.
Secondary Planned Principal
Class................................ None.
Senior Certificates.................. Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class PO,
Class X and Class A-R Certificates.
Subordinated Certificates............ Class M, Class B-1, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates.
Support Classes...................... None.
<PAGE>
Targeted Principal
Classes.............................. None.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
<PAGE>
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: As specified in the Preliminary Statement.
-------------------------------
Accrual Amount: With respect to any Accrual Components and any
---------------
Distribution Date prior to the applicable Accrual Termination Date, the amount
allocable to interest on each such Class of Accrual Certificates with respect to
such Distribution Date pursuant to Section 4.02(a)(iii).
Accrual Components: As specified in the Preliminary Statement.
------------------
Adjusted Mortgage Rate: As to each Mortgage Loan, and at any time, the
-----------------------
per annum rate equal to the Mortgage Rate less the Master Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
---------------------------
per annum rate equal to the Mortgage Rate less the related Expense Rate. For
purposes of determining whether any Substitute Mortgage Loan is a Discount
Mortgage Loan or a Non-Discount Mortgage Loan and for purposes of calculating
the applicable PO Percentage and applicable Non-PO Percentage, each Substitute
Mortgage Loan shall be deemed to have an Adjusted Net Mortgage Rate equal to the
Adjusted Net Mortgage Rate of the Deleted Mortgage Loan for which it is
substituted.
Advance: The payment required to be made by the Master Servicer with respect
-------
to any Distribution Date pursuant to Section 4.01, the amount of any such
payment being equal to the aggregate of payments of principal and interest (net
of the Master Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that the Master Servicer has
determined would constitute a Nonrecoverable Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all amendments or
---------
supplements hereto.
Allocable Share: As to any Distribution Date and any Mortgage Loan
----------------
(i) with respect to the Class X Certificates, (a) the ratio that (x) the excess,
if any, of the Adjusted Net Mortgage Rate with respect to such Mortgage Loan
over the Required Coupon bears to (y) such Adjusted Net Mortgage Rate or (b) if
the Adjusted Net Mortgage Rate with respect to such Mortgage Loan does not
exceed the Required Coupon, zero, (ii) with respect to the Class PO
Certificates, zero and (iii) with respect to each other Class of Certificates
the
I-1
<PAGE>
product of (a) the lesser of (I) the ratio that the Required Coupon bears to
such Adjusted Net Mortgage Rate and (II) one, multiplied by (b) the ratio that
the amount calculated with respect to such Distribution Date for such Class
pursuant to clause (i) of the definition of Class Optimal Interest Distribution
Amount (without giving effect to any reduction of such amount pursuant to
Section 4.02(d)) bears to the amount calculated with respect to such
Distribution Date for each Class of Certificates pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving effect
to any reduction of such amount pursuant to Section 4.02(d)).
Amount Available for Senior Principal: As to any Distribution Date,
------------------------------------------
Available Funds for such Distribution Date reduced by the aggregate amount
distributable (or allocable to the Accrual Amount, if applicable) on such
Distribution Date in respect of interest on the Senior Certificates pursuant to
Section 4.02(a)(ii).
Amount Held for Future Distribution: As to any Distribution Date , the
------------------------------------
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date on account of (i) Principal Prepayments received
after the related Prepayment Period and Liquidation Proceeds received in the
month of such Distribution Date and (ii) all Scheduled Payments due after the
related Due Date.
Applicable Credit Support Percentage: As defined in Section 4.02(e).
------------------------------------
Appraised Value: With respect to any Mortgage Loan, the Appraised Value of
---------------
the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; (ii) with respect to a
Refinancing Mortgage Loan other than a Streamlined Documentation Mortgage Loan,
the value of the Mortgaged Property based upon the appraisal made-at the time of
the origination of such Refinancing Mortgage Loan; and (iii) with respect to a
Streamlined Documentation Mortgage Loan, (a) if the loan-to-value ratio with
respect to the Original Mortgage Loan at the time of the origination thereof was
75% or less, (or 70% or less for Mortgaged Properties in California) the value
of the Mortgaged Property based upon the appraisal made at the time of the
origination of the Original Mortgage Loan and (b) if the loan-to-value ratio
with respect to the Original Mortgage Loan at the time of the origination
thereof was greater than 75% (or greater than 70% for Mortgaged Properties in
California), the value of the Mortgaged Property based upon the appraisal (which
may be a drive-by appraisal) made at the time of the origination of such
Streamlined Documentation Mortgage Loan.
Available Funds: As to any Distribution Date , the sum of (a) the
----------------
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date net of the Amount Held for Future Distribution and
net of amounts permitted to be withdrawn from the Certificate Account pursuant
to clauses (i)-(viii), inclusive, of Section 3.08(a) and
I-2
<PAGE>
amounts permitted to be withdrawn from the Distribution Account pursuant to
clauses (i)-(iii) inclusive of Section 3.08(b), (b) the amount of the related
Advance and (c) in connection with Defective Mortgage Loans, as applicable, the
aggregate of the Purchase Prices and Substitution Adjustment Amounts deposited
on the related Distribution Account Deposit Date.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
---------------
amended.
Bankruptcy Coverage Termination Date: The point in time at which the
------------------------------------
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
----------------
Valuation or Debt Service Reduction; provided, however, that a Bankruptcy Loss
shall not be deemed a Bankruptcy Loss hereunder so long as the Master Servicer
has notified the Trustee in writing that the Master Servicer is diligently
pursuing any remedies that may exist in connection with the related Mortgage
Loan and either (A) the related Mortgage Loan is not in default with regard to
payments due thereunder or (B) delinquent payments of principal and interest
under the related Mortgage Loan and any related escrow payments in respect of
such Mortgage Loan are being advanced on a current basis by the Master Servicer,
in either case without giving effect to any Debt Service Reduction or Deficient
Valuation.
Bankruptcy Loss Coverage Amount: As of any Determination Date, the
---------------------------------
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated to
the Certificates since the Cut-off Date and (ii) any permissible reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee to the effect that any such reduction will not result in a
downgrading of the then current ratings assigned to the Classes of Certificates
rated by it.
Blanket Mortgage: The mortgage or mortgages encumbering the Cooperative
----------------
Property.
Book-Entry Certificates: As specified in the Preliminary Statement.
-----------------------
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
-------------
on which banking institutions in the City of New York, New York, or the State of
California or the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee in
-----------
substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account or Accounts created and
--------------------
maintained by the Master Servicer pursuant to Section 3.05 with a depository
institution in
I-3
<PAGE>
the name of the Master Servicer for the benefit of the Trustee on behalf of
Certificateholders and designated "Countrywide Home Loans, Inc. in trust for the
registered holders of CWABS, Inc. Mortgage Pass-Through Certificates Series
1998-13."
Certificate Balance: With respect to any Certificate at any date, the
--------------------
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof (A) minus the sum
of (i) all distributions of principal previously made with respect thereto and
(ii) all Realized Losses allocated thereto and, in the case of any Subordinated
Certificates, all other reductions in Certificate Balance previously allocated
thereto pursuant to Section 4.03 and (B) in the case of any Class of Accrual
Certificates, increased by the Accrual Amount added to the Class Certificate
Balance of such Class prior to such date.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who
-----------------
is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section 5.02
---------------------
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
-----------------------------
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or any affiliate of the Depositor shall be deemed not to
be Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set forth in
-----
the Preliminary Statement.
Class Certificate Balance: With respect to any Class and as to any date of
--------------------------
determination, the aggregate of the Certificate Balances of all Certificates of
such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and Class, the amount
------------------------
by which the amount described in clause (i) of the definition of Class Optimal
Interest Distribution Amount for such Class exceeds the amount of interest
actually distributed on such Class on such Distribution Date pursuant to such
clause (i).
I-4
<PAGE>
Class Optimal Interest Distribution Amount: With respect to any Distribution
------------------------------------------
Date and interest bearing Class or, with respect to any interest bearing
Component, any Component thereof, the sum of (i) one month's interest accrued
during the related Interest Accrual Period at the Pass-Through Rate for such
Class on the related Class Certificate Balance, Component Balance or Notional
Amount, as applicable, subject to reduction as provided in Section 4.02(d) and
(ii) any Class Unpaid Interest Amounts for such Class or Component.
Class PO Deferred Amount: As to any Distribution Date, the aggregate of the
------------------------
applicable PO Percentage of each Realized Loss, other than any Excess Loss, to
be allocated to the Class PO Certificates on such Distribution Date on or prior
to the Senior Credit Support Depletion Date or previously allocated to the Class
PO Certificates and not yet paid to the Holders of the Class PO Certificates.
Class Subordination Percentage: With respect to any Distribution Date and
---------------------------------
each Class of Subordinated Certificates, the quotient (expressed as a
percentage) of (a) the Class Certificate Balance of such Class of Certificates
immediately prior to such Distribution Date divided by (b) the aggregate of the
Class Certificate Balances immediately prior to such Distribution Date of all
Classes of Certificates.
Class Unpaid Interest Amounts: As to any Distribution Date and Class of
-------------------------------
interest bearing Certificates, the amount by which the aggregate Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds the amount
distributed on such Class on prior Distribution Dates pursuant to clause (ii) of
the definition of Class Optimal Interest Distribution Amount.
Closing Date: June 29, 1998.
------------
Code: The Internal Revenue Code of 1986, including any successor or
----
amendatory provisions.
COFI: The Monthly Weighted Average Cost of Funds Index for the Eleventh
----
District Savings Institutions published by the Federal Home Loan Bank of San
Francisco.
COFI Certificates: As specified in the Preliminary Statement.
-----------------
Component: As specified in the Preliminary Statement.
---------
Component Balance: With respect to any Component and any Distribution Date,
-----------------
the Initial Component Balance thereof on the Closing Date, less all amounts
applied in reduction of the principal balance of such Component and Realized
Losses allocated thereto on previous Distribution Dates.
Component Certificates: As specified in the Preliminary Statement.
----------------------
I-5
<PAGE>
Cooperative Corporation: The entity that holds title (fee or an acceptable
------------------------
leasehold estate) to the real property and improvements constituting the
Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Coop Shares: Shares issued by a Cooperative Corporation.
-----------
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and a Proprietary
----------------
Lease.
Cooperative Property: The real property and improvements owned by the
---------------------
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
-----------------
Property.
Corporate Trust Office: The designated office of the Trustee in the State of
----------------------
New York at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 101 Barclay Street, 12E, New York, New
York 10286 (Attn: Mortgage-Backed Securities Group, CWABS, Inc. Series 1998-13,
facsimile no. (212) 815-4135, and which is the address to which notices to and
correspondence with the Trustee should be directed.
Corresponding Classes of Certificates: With respect to each Subsidiary REMIC
-------------------------------------
Regular Interest, any Class of Certificates or Components appearing opposite
such Subsidiary REMIC Regular Interest in the Preliminary Statement.
Cut-off Date: June 1, 1998.
------------
Cut-off Date Pool Principal Balance: $350,322,611.03.
-----------------------------------
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
---------------------------------
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction by a
----------------------
court of competent jurisdiction in a proceeding under the Bankruptcy Code in the
Scheduled Payment for such Mortgage Loan which became final and non-appealable,
except such a reduction resulting from a Deficient Valuation or any reduction
that results in a permanent forgiveness of principal.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
-------------------------
repurchased pursuant to Section 2.02 or 2.03.
I-6
<PAGE>
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
--------------------
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then-outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or reduction
results from an order of such court which is final and non-appealable in a
proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical Certificate
-----------------------
and any Certificate issued in lieu of a Book-Entry Certificate pursuant to
Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
------------------
Delay Delivery Mortgage Loans: The Mortgage Loans for which all or a portion
-----------------------------
of a related Mortgage File is not delivered to Trustee on the Closing Date. The
number of Delay Delivery Mortgage Loans shall not exceed 50% of the aggregate
number of Mortgage Loans as of the Closing Date.
Deleted Mortgage Loan: As defined in Section 2.03(c) hereof.
---------------------
Denomination: With respect to each Certificate, the amount set forth on the
------------
face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.
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 the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code 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 a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date, the 22nd day of each month
-------------------
or if such 22nd day is not a Business Day the next preceding Business Day;
provided, however, that if such 22nd day or such Business Day, whichever is
applicable, is less than two Business Days prior to the related Distribution
Date, the Determination Date shall be the first Business Day which is two
Business Days preceding such Distribution Date.
Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net Mortgage Rate
----------------------
that is less than the Required Coupon.
I-7
<PAGE>
Distribution Account: The separate Eligible Account created and maintained
---------------------
by the Trustee pursuant to Section 3.05 in the name of the Trustee for the
benefit of the Certificateholders and designated "The Bank of New York in trust
for registered holders of CWABS, Inc. Mortgage Pass-Through Certificates, Series
1998-13." Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 12:30 p.m.
----------------------------------
Pacific time on the Business Day immediately preceding such Distribution Date.
Distribution Date: The 25th day of each calendar month after the initial
------------------
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in July 1998.
Due Date: With respect to any Distribution Date, the first day of the month
--------
in which the related Distribution Date occurs.
Duff & Phelps: Duff & Phelps Credit Rating Company, or any successor
--------------
thereto. If Duff & Phelps is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to Duff &
Phelps shall be Duff & Phelps Credit Rating Company, 55 East Monroe Street, 38th
floor, Chicago, Illinois 60603, Attention: MBS Monitoring, or such other address
as Duff & Phelps may hereafter furnish to the Depositor and the Master Servicer.
Eligible Account: Any of (i) an account or accounts maintained with a
-----------------
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
(a) the trust department of a federal or state chartered depository institution
or (b) a trust company, acting in its fiduciary capacity or (iv) any other
account acceptable to each Rating Agency. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
-----
I-8
<PAGE>
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
----------------------------
Escrow Account: The Eligible Account or Accounts established and maintained
--------------
pursuant to Section 3.06(a) hereof.
Event of Default: As defined in Section 7.01 hereof.
----------------
Excess Loss: The amount of any (i) Fraud Loss realized after the Fraud Loss
-----------
Coverage Termination Date, (ii) Special Hazard Loss realized after the Special
Hazard Coverage Termination Date or (iii) Bankruptcy Loss realized after the
Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the amount,
---------------
if any, by which the sum of any Liquidation Proceeds of such Mortgage Loan
received in the calendar month in which such Mortgage Loan became a Liquidated
Mortgage Loan, net of any amounts previously reimbursed to the Master Servicer
as Nonrecoverable Advance(s) with respect to such Mortgage Loan pursuant to
Section 3.08(a)(iii), exceeds (i) the unpaid principal balance of such
Liquidated Mortgage Loan as of the Due Date in the month in which such Mortgage
Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
(and not reimbursed) to Certificateholders up to the Due Date applicable to the
Distribution Date immediately following the calendar month during which such
liquidation occurred.
Expense Rate: As to each Mortgage Loan, the sum of the related Master
-------------
Servicing Fee Rate and the Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
----
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
-----
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of
------
1989.
Fitch: Fitch IBCA, Inc., or any successor thereto. If Fitch is designated as
-----
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b)
the address for notices to Fitch shall be Fitch IBCA, Inc., One State Street
Plaza, New York, New York 10004, Attention: Residential Mortgage Surveillance
Group, or such other address as Fitch may hereafter furnish to the Depositor and
the Master Servicer.
FNMA: The Federal National Mortgage Association, a federally chartered and
----
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act, or any successor thereto.
I-9
<PAGE>
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
-----------
occurred.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
-------------
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a loss
by reason of the denial of coverage under any related Primary Insurance Policy
because of such fraud, dishonesty or misrepresentation.
Fraud Loss Coverage Amount: As of the Closing Date, $7,006,452 subject to
--------------------------
reduction from time to time, by the amount of Fraud Losses allocated to the
Certificates. In addition, on each anniversary of the Cut-off Date, the Fraud
Loss Coverage Amount will be reduced as follows: (a) on the first, second, third
and fourth anniversaries of the Cut-off Date, to an amount equal to the lesser
of (i) 1% of the then current Pool Stated Principal Balance and (ii) the excess
of the Fraud Loss Coverage Amount as of the preceding anniversary of the Cut-off
Date over the cumulative amount of Fraud Losses allocated to the Certificates
since such preceding anniversary; and (b) on the fifth anniversary of the
Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at which the Fraud
--------------------------------------
Loss Coverage Amount is reduced to zero.
Index: With respect to any Interest Accrual Period for the COFI
-----
Certificates, the then-applicable index used by the Trustee pursuant to Section
4.05 to determine the applicable Pass-Through Rate for such Interest Accrual
Period for the COFI Certificates.
Indirect Participant: A broker, dealer, bank or other financial institution
--------------------
or other Person that clears through or maintains a custodial relationship with a
Depository Participant.
Initial Bankruptcy Coverage Amount: $108,939.
----------------------------------
Initial Component Balance: As specified in the Preliminary Statement.
-------------------------
Insurance Policy: With respect to any Mortgage Loan included in the Trust
-----------------
Fund, any insurance policy, including all riders and endorsements thereto in
effect, including any replacement policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any Insurance
-------------------
Policy, in each case other than any amount included in such Insurance Proceeds
in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
-----------------
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay Certificates
------------------------
and any Distribution Date, the calendar month prior to the month of such
Distribution Date. With respect to any Non-Delay Certificates and any
I-10
<PAGE>
Distribution Date, the one month period commencing on the 25th day of the
month preceding the month in which such Distribution Date occurs and ending
on the 24th day of the month in which such Distribution Date occurs.
Interest Determination Date: With respect to (a) any Interest Accrual Period
---------------------------
for any LIBOR Certificates and (b) any Interest Accrual Period for the COFI
Certificates for which the applicable Index is LIBOR, the second Business Day
prior to the first day of such Interest Accrual Period.
Latest Possible Maturity Date: The Distribution Date following the third
-------------------------------
anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
Lender PMI Mortgage Loan: Certain Mortgage Loans with Loan-to-Value Ratios
------------------------
at origination of greater than 80% as to which the lender (rather than the
borrower) acquires the Primary Insurance Policy and charges the related borrower
an interest premium.
LIBOR: The London interbank offered rate for one-month United States dollar
-----
deposits calculated in the manner described in Section 4.08.
LIBOR Certificates: As specified in the Preliminary Statement.
------------------
Liquidated Mortgage Loan: With respect to any Distribution Date, a defaulted
------------------------
Mortgage Loan (including any REO Property) which was liquidated in the calendar
month preceding the month of such Distribution Date and as to which the Master
Servicer has determined (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan, including the final disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
---------------------
connection with the partial or complete liquidation of defaulted Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Master Servicing Fees, Servicing Advances
and Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any date of
-------------------
determination, the fraction (expressed as a percentage) the numerator of which
is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which was permanently
------------------
lost or destroyed and has not been replaced.
I-11
<PAGE>
Maintenance: With respect to any Cooperative Unit, the rent paid by the
-----------
Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.
Majority in Interest: As to any Class of Regular Certificates, the Holders
--------------------
of Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
Master Servicer: Countrywide Home Loans, Inc., a New York corporation, and
---------------
its successors and assigns, in its capacity as master servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, 12:30 p.m.
-------------------------------
Pacific time on the Business Day immediately preceding such Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
--------------------
amount payable out of each full payment of interest received on such Mortgage
Loan and equal to one-twelfth of the Master Servicing Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the Due Date in the month
of such Distribution Date (prior to giving effect to any Scheduled Payments due
on such Mortgage Loan on such Due Date), subject to reduction as provided in
Section 3.14.
Master Servicing Fee Rate: With respect to each Mortgage Loan, 0.25% per
--------------------------
annum.
Monthly Statement: The statement delivered to the Certificateholders
------------------
pursuant to Section 4.04.
Moody's: Moody's Investors Service, Inc., or any successor thereto. If
-------
Moody's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Moody's shall be Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:
Residential Pass-Through Monitoring, or such other address as Moody's may
hereafter furnish to the Depositor or the Master Servicer.
Mortgage: The mortgage, deed of trust or other instrument creating a first
--------
lien on an estate in fee simple or leasehold interest in real property securing
a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
--------------
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
--------------
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property.
I-12
<PAGE>
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
------------------------
amended by the Master Servicer to reflect the addition of Substitute Mortgage
Loans and the deletion of Deleted Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Schedule I, setting
forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is either (a) a
detached single family dwelling (b) a dwelling in a de minimis PUD, (c)
a condominium unit or PUD (other than a de minimis PUD), (d) a two- to
four-unit residential property or (e) a Cooperative Unit;
(xi) the Mortgage Rate;
(xii) a code indicating whether the Mortgage Loan is a Lender PMI
Mortgage Loan and, in the case of any Lender PMI Mortgage Loan, a
percentage representing the amount of the related interest premium
charged to the borrower;
(xiii) the purpose for the Mortgage Loan;
(xiv) the type of documentation program pursuant to which the Mortgage
Loan was originated; and
(xv) the Master Servicing Fee for the Mortgage Loan.
I-13
<PAGE>
Such schedule shall also set forth the total of the amounts described under
(iv) and (v) above for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of indebtedness
-------------
evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
--------------
time to time, net of any interest premium charged by the mortgagee to obtain or
maintain any Primary Insurance Policy.
Mortgaged Property: The underlying property securing a Mortgage Loan, which,
------------------
with respect to a Cooperative Loan, is the related Coop Shares and Proprietary
Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
---------
National Cost of Funds Index: The National Monthly Median Cost of Funds
------------------------------
Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.
Net Prepayment Interest Shortfalls: As to any Distribution Date, the amount
----------------------------------
by which the aggregate of Prepayment Interest Shortfalls during the related
Prepayment Period exceeds an amount equal to one-half of the aggregate Master
Servicing Fee for such Distribution Date before reduction of the Master
Servicing Fee in respect of such Prepayment Interest Shortfalls.
Non-Delay Certificates: As specified in the Preliminary Statement.
----------------------
Non-Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net Mortgage
---------------------------
Rate that is greater than or equal to the Required Coupon.
Non-PO Formula Principal Amount: As to any Distribution Date, the sum of the
-------------------------------
applicable Non-PO Percentage of (a) the principal portion of each Scheduled
Payment (without giving effect, prior to the Bankruptcy Coverage Termination
Date, to any reductions thereof caused by any Debt Service Reductions or
Deficient Valuations) due on each Mortgage Loan on the related Due Date, (b) the
Stated Principal Balance of each Mortgage Loan that was repurchased by the
Seller or the Master Servicer pursuant to this Agreement as of such Distribution
Date, (c) the Substitution Adjustment Amount in connection with any Deleted
Mortgage Loan received with respect to such Distribution Date, (d) any Insurance
Proceeds or Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans that are not yet Liquidated Mortgage Loans received during the
calendar month preceding the month of such Distribution Date, (e) with respect
to each Mortgage Loan that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the amount of the
Liquidation Proceeds allocable to principal received during the calendar month
preceding the month of such Distribution Date with respect to
I-14
<PAGE>
such Mortgage Loan and (f) all Principal Prepayments received during the related
Prepayment Period.
Non-PO Percentage: As to any Discount Mortgage Loan, a fraction (expressed
-----------------
as a percentage) the numerator of which is the Adjusted Net Mortgage Rate of
such Discount Mortgage Loan and the denominator of which is the Required Coupon.
As to any NonDiscount Mortgage Loan, 100%.
Nonrecoverable Advance: Any portion of an Advance previously made or
-----------------------
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to Section
----------------------------
9.02 to the effect that final distribution on any of the Certificates shall be
made only upon presentation and surrender thereof.
Notional Amount: With respect to any Distribution Date and the Class X
----------------
Certificates, the aggregate of the Stated Principal Balances of the Non-Discount
Mortgage Loans as of the Due Date in the month of such Distribution Date (prior
to giving effect to any Scheduled Payments due on such Mortgage Loans on such
Due Date).
Notional Amount Certificates: As specified in the Preliminary Statement.
----------------------------
Offered Certificates: As specified in the Preliminary Statement.
--------------------
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 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, who may be counsel for the
------------------
Depositor or the Master Servicer, including, in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i) in
fact be independent of the Depositor and the Master Servicer, (ii) not have any
direct financial interest in the Depositor or the Master Servicer or in any
affiliate of either, and (iii) not be connected with the-Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
I-15
<PAGE>
Optional Termination: The termination of the trust created hereunder in
---------------------
connection with the purchase of the Mortgage Loans pursuant to Section 9.01(a)
hereof.
Original Applicable Credit Support Percentage: With respect to each of the
----------------------------------------------
following Classes of Subordinated Certificates, the corresponding percentage
described below, as of the Closing Date:
Class M 4.75%
Class B-1 2.40%
Class B-2 1.35%
Class B-3 0.90%
Class B-4 0.50%
Class B-5 0.30%
Original Mortgage Loan: The mortgage loan refinanced in connection with the
-----------------------
origination of a Refinancing Mortgage Loan.
Original Subordinated Principal Balance: The aggregate of the Class
-------------------------------------------
Certificate Balances of the Subordinated Certificates as of the Closing Date.
OTS: The Office of Thrift Supervision.
---
Outside Reference Date: As to any Interest Accrual Period for the COFI
------------------------
Certificates, the close of business on the tenth day thereof.
Outstanding: With respect to the Certificates as of any date of
-----------
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant
to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a Stated
-------------------------
Principal Balance greater than zero-which was not the subject of a Principal
Prepayment in Full prior to such Due Date and which did not become a Liquidated
Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership interest
------------------
in such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
I-16
<PAGE>
Pass-Through Rate: For any interest bearing Class of Certificates or
------------------
Component, the per annum rate set forth or calculated in the manner described in
the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
--------------------
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the following
----------------------
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as
will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency;
(iii) 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 ratings then assigned to the Certificates by each
Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal and/or
state banking authorities, provided that the commercial paper and/or
long term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institution
in a holding company system, the commercial paper or long-term
unsecured debt obligations of such holding company, but only if 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 either
Rating Agency;
(v) 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;
(vi) 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 either Rating Agency;
I-17
<PAGE>
(vii) 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 (iv) above;
(viii) 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 either Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if Fitch or Duff & Phelps
is a Rating Agency and has not rated the portfolio, the highest rating
assigned by Moody's) and restricted to obligations issued or guaranteed
by the United States of America or entities whose obligations are
backed by the full faith and credit of the United States of America and
repurchase agreements collateralized by such obligations; and
(x) such other investments 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 either
Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency.
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument.
Permitted Transferee: Any person other than (i) the United States, any State
--------------------
or political subdivision thereof, or any agency or instrumentality of any of the
foregoing, (ii) a foreign government, International Organization or any agency
or instrumentality of either of the foregoing, (iii) an organization (except
certain farmers' cooperatives described in section 521 of the Code) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(l) of the Code) with respect to any
Residual Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof an estate whose income from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States or a trust if a court within the United States is able
to exercise primary supervision over the
I-18
<PAGE>
administration of the trust and one or more United States fiduciaries have the
authority to control all substantial decisions of the trust unless such Person
has furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form 4224 or any applicable successor form, and (vi) any other
Person so designated by the Depositor based upon an Opinion of Counsel that the
Transfer of an Ownership Interest in a Residual Certificate to such Person may
cause the REMIC hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of the Federal Home Loan Mortgage Corporation, a majority of its
board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Physical Certificate: As specified in the Preliminary Statement.
--------------------
Planned Balance: Not applicable.
---------------
Planned Principal Classes: As specified in the Preliminary Statement.
-------------------------
PO Formula Principal Amount: As to any Distribution Date, the sum of the
-----------------------------
applicable PO Percentage of (a) the principal portion of each Scheduled Payment
(without giving effect, prior to the Bankruptcy Coverage Termination Date, to
any reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on each Mortgage Loan on the related Due Date, (b) the Stated
Principal Balance of each Mortgage Loan that was repurchased by the Seller or
the Master Servicer pursuant to this Agreement as of such Distribution Date, (c)
the Substitution Adjustment Amount in connection with any Deleted Mortgage Loan
received with respect to such Distribution Date, (d) any Insurance Proceeds or
Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that
are not yet Liquidated Mortgage Loans received during the calendar month
preceding the month of such Distribution Date, (e) with respect to each Mortgage
Loan that became a Liquidated Mortgage Loan during the month preceding the
calendar month of such Distribution Date, the amount of Liquidation Proceeds
allocable to principal received during the month preceding the month of such
Distribution Date with respect to such Mortgage Loan and (f) all Principal
Prepayments received during the related Prepayment Period.
PO Percentage: As to any Discount Mortgage Loan, a fraction (expressed as a
-------------
percentage) the numerator of which is the excess of the Required Coupon over the
Adjusted Net Mortgage Rate of such Discount Mortgage Loan and the denominator of
which is the Required Coupon. As to any Non-Discount Mortgage Loan, 0%.
I-19
<PAGE>
Pool Stated Principal Balance: As to any Distribution Date, the aggregate of
-----------------------------
the Stated Principal Balances of the Mortgage Loans which were Outstanding
Mortgage Loans on the Due Date in the month preceding the month of such
Distribution Date.
Prepayment Interest Excess: As to any Principal Prepayment received by the
---------------------------
Master Servicer from the first day through the fifteenth day of any calendar
month (other than the calendar month in which the Cut-off Date occurs), all
amounts paid by the related Mortgagor in respect of interest on such Principal
Prepayment. All Prepayment Interest Excess shall be paid to the Master Servicer
as additional master servicing compensation.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage Loan
-------------------------------
and Principal Prepayment received on or after the sixteenth day of the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, on or after the Cut-off Date) and on or before the last day
of the month preceding the month of such Distribution Date, the amount, if any,
by which one month's interest at the related Mortgage Rate, net of the Master
Servicing Fee Rate, on such Principal Prepayment exceeds the amount of interest
paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period from the 16th day
-----------------
of the calendar month preceding the month of such Distribution Date (or, in the
case of the first Distribution Date, from the Cut-off Date) through the 15th of
the month of such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty insurance
------------------------
or any replacement policy therefor with respect to any Mortgage Loan.
Primary Planned Principal Classes: As specified in the Preliminary
-------------------------------------
Statement.
Principal Prepayment: Any payment of principal by a Mortgagor on a Mortgage
--------------------
Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
-----------------------------
of the entire principal balance of a Mortgage Loan.
Priority Amount: As to any Distribution Date, the amount equal to the
----------------
product of (A) Senior Principal Distribution Amount, (B) the Shift Percentage
and (C) the Priority Percentage.
Priority Percentage: As to any Distribution Date, a fraction, the numerator
-------------------
of which is equal to the aggregate Class Certificate Balance of the Class A-4
Certificates on such Distribution Date, and the denominator of which is equal to
the aggregate Class Certificate
I-20
<PAGE>
Balances of the Senior Certificates (other than the Class PO Certificates) on
such Distribution Date.
Private Certificate: As specified in the Preliminary Statement.
-------------------
Pro Rata Share: As to any Distribution Date, the Subordinated Principal
--------------
Distribution Amount and any Class of Subordinated Certificates, the portion of
the Subordinated Principal Distribution Amount allocable to such Class, equal to
the product of the Subordinated Principal Distribution Amount on such
Distribution Date and a fraction, the numerator of which is the related Class
Certificate Balance thereof and the denominator of which is the aggregate of the
Class Certificate Balances of the Subordinated Certificates.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
------------------
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
Prospectus Supplement: The Prospectus Supplement dated June 25, 1998
----------------------
relating to the Offered Certificates.
PUD: Planned Unit Development.
---
Purchase Price: With respect to any Mortgage Loan required to be purchased
---------------
by the Seller pursuant to Section 2.02 or 2.03 hereof or purchased at the option
of the Master Servicer pursuant to Section 3.11, an amount equal to the sum of
(i) 100% of the unpaid principal balance of the Mortgage Loan on the date of
such purchase, and (ii) accrued interest thereon at the applicable Mortgage Rate
(or at the applicable Adjusted Mortgage Rate if (x) the purchaser is the Master
Servicer or (y) if the purchaser is the Seller and the Seller is the Master
Servicer) from the date through which interest was last paid by the Mortgagor to
the Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
------------------
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
--------------
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee.
I-21
<PAGE>
References herein to a given rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount (not
-------------
less than zero or more than the Stated Principal Balance of the Mortgage Loan)
as of the date of such liquidation, equal to (i) the Stated Principal Balance of
the Liquidated Mortgage Loan as of the date of such liquidation, plus (ii)
interest at the Adjusted Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced (and not reimbursed) to Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any, received during
the month in which such liquidation occurred, to the extent applied as
recoveries of interest at the Adjusted Net Mortgage Rate and to principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan which has become
the subject of a Deficient Valuation, if the principal amount due under the
related Mortgage Note has been reduced, the difference between the principal
balance of the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the principal balance of the Mortgage Loan as reduced by the
Deficient Valuation. With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction and any Distribution Date, the amount, if
any, by which the principal portion of the related Scheduled Payment has been
reduced.
Recognition Agreement: With respect to any Cooperative Loan, an agreement
----------------------
between the Cooperative Corporation and the originator of such Mortgage Loan
which establishes the rights of such originator in the Cooperative Property.
Record Date: With respect to any Distribution Date, the close of business on
-----------
the last Business Day of the month preceding the month in which such
Distribution Date occurs.
Reference Bank: As defined in Section 4.05.
--------------
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection with
--------------------------
the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
--------------------
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
----------
Relief Act Reductions: With respect to any Distribution Date and any
-----------------------
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month is
less than (ii) interest accrued thereon for such month pursuant to the Mortgage
Note.
I-22
<PAGE>
REMIC: A "real estate mortgage investment conduit" within the meaning of
-----
section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation, revenue
-------------------
ruling, revenue procedure or other official announcement or interpretation
relating to REMICs and the REMIC Provisions issued after the Closing Date.
REMIC Provisions: Provisions of the federal income tax law relating to real
----------------
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust Fund through
-------------
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release: The Request for Release submitted by the Master
---------------------
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Coupon: 6.75% per annum.
---------------
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
-------------------------
policy that is required to be maintained from time to time under this Agreement.
Residual Certificates: As specified in the Preliminary Statement.
---------------------
Responsible Officer: When used with respect to the Trustee, any Vice
--------------------
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
Restricted Classes: As defined in Section 4.02(e).
------------------
Scheduled Balances: Not applicable.
------------------
Scheduled Classes: As specified in the Preliminary Statement.
-----------------
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
------------------
any Due Date allocable to principal and/or interest on such Mortgage Loan which,
unless otherwise specified herein, shall give effect to any related Debt Service
Reduction and any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
I-23
<PAGE>
Secondary Planned Principal Clauses: As specified in the Preliminary
--------------------------------------
Statement.
Securities Act: The Securities Act of 1933, as amended.
--------------
Seller: Countrywide Home Loans, Inc., a New York corporation, and its
------
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Senior Certificates: As specified in the Preliminary Statement.
-------------------
Senior Credit Support Depletion Date: The date on which the Class
-----------------------------------------
Certificate Balance of each Class of Subordinated Certificates has been reduced
to zero.
Senior Percentage: As to any Distribution Date, the percentage equivalent of
-----------------
a fraction the numerator of which is the aggregate of the Class Certificate
Balances of each Class of Senior Certificates (other than Class PO Certificates)
as of such date and the denominator of which is the aggregate of the Class
Certificate Balances of all Classes of Certificates (other than the Class PO
Certificates) as of such date.
Senior Prepayment Percentage: For any Distribution Date during the five
------------------------------
years beginning on the first Distribution Date, 100%. The Senior Prepayment
Percentage for any Distribution Date occurring on or after the fifth anniversary
of the first Distribution Date will, except as provided herein, be as follows:
for any Distribution Date in the first year thereafter, the Senior Percentage
plus 70% of the Subordinated Percentage for such Distribution Date; for any
Distribution Date in the second year thereafter, the Senior Percentage plus 60%
of the Subordinated Percentage for such Distribution Date; for any Distribution
Date in the third year thereafter, the Senior Percentage plus 40% of the
Subordinated Percentage for such Distribution Date; for any Distribution Date in
the fourth year thereafter, the Senior Percentage plus 20% of the Subordinated
Percentage for such Distribution Date; and for any Distribution Date thereafter,
the Senior Percentage for such Distribution Date (unless on any Distribution
Date the Senior Percentage exceeds the initial Senior Percentage, in which case
the Senior Prepayment Percentage for such Distribution Date will once again
equal 100%). Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage will occur unless both of the Senior Step Down Conditions are
satisfied.
Senior Principal Distribution Amount: As to any Distribution Date, the sum
--------------------------------------
of (i) the Senior Percentage of the applicable Non-PO Percentage of all amounts
described in clauses (a) through (d) of the definition of "Non-PO Formula
Principal Amount" for such Distribution Date, (ii) with respect to each Mortgage
Loan that became a Liquidated Mortgage Loan during the calendar month preceding
the month of such Distribution Date, the lesser of (x) the Senior Percentage of
the applicable Non-PO Percentage of the Stated Principal Balance of such
Mortgage Loan and (y) either (A) the Senior Prepayment Percentage, or (B) if an
Excess Loss was sustained with respect to such Liquidated Mortgage Loan during
such prior calendar month, the Senior Percentage, of the applicable Non-PO
I-24
<PAGE>
Percentage of the amount of the Liquidation Proceeds allocable to principal
received with respect to such Mortgage Loan, and (iii) the Senior Prepayment
Percentage of the applicable Non-PO Percentage of the amounts described in
clause (f) of the definition of "Non-PO Formula Principal Amount" for such
Distribution Date; provided, however, that if a Bankruptcy Loss that is an
Excess Loss is sustained with respect to a Mortgage Loan that is not a
Liquidated Mortgage Loan, the Senior Principal Distribution Amount will be
reduced on the related Distribution Date by the Senior Percentage of the Non-PO
Percentage of the principal portion of such Bankruptcy Loss.
Senior Step Down Conditions: As of the first Distribution Date as to which
---------------------------
any decrease in the Senior Prepayment Percentage applies, (i) the outstanding
principal balance of all Mortgage Loans delinquent 60 days or more (averaged
over the preceding six month period), as a percentage of the aggregate principal
balance of the Subordinate Certificates on such Distribution Date, does not
equal or exceed 50% and (ii) cumulative Realized Losses with respect to the
Mortgage Loans do not exceed (a) with respect to the Distribution Date on the
fifth anniversary of the first Distribution Date, 30% of the Original
Subordinated Principal Balance, (b) with respect to the Distribution Date on the
sixth anniversary of the first Distribution Date, 35% of the Original
Subordinated Principal Balance, (c) with respect to the Distribution Date on the
seventh anniversary of the first Distribution Date, 40% of the Original
Subordinated Principal Balance, (d) with respect to the Distribution Date on the
eighth anniversary of the first Distribution Date, 45% of the Original
Subordinated Principal Balance and (e) with respect to the Distribution Date on
the ninth anniversary of the first Distribution Date, 50% of the Original
Subordinated Principal Balance.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
------------------
costs and expenses incurred in the performance by the Master Servicer of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.09.
Servicing Officer: Any officer of the Master Servicer involved in, or
------------------
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Shift Percentage: As to any Distribution Date occurring during the five
-----------------
years beginning on the first Distribution Date, 0%. Thereafter, the Shift
Percentage for any Distribution Date occurring on or after the fifth anniversary
of the first Distribution Date will be as follows: for any Distribution Date in
the first year thereafter, 30%; for any Distribution Date in the second year
thereafter, 40%; for any Distribution Date in the third year thereafter, 60%;
for any Distribution Date in the fourth year thereafter, 80%; and for any
Distribution Date thereafter, 100%.
I-25
<PAGE>
Special Hazard Coverage Termination Date: The point in time at which the
--------------------------------------------
Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged Property on
-------------------
account of direct physical loss but not including (i) any loss of a type covered
by a hazard insurance policy or a flood insurance policy required to be
maintained with respect to such Mortgaged Property pursuant to Section 3.09 to
the extent of the amount of such loss covered thereby, or (ii) any loss caused
by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of
the Trustee, the Master Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then
only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an
actual, impending or expected attack:
1. by any government or sovereign power, de jure or de
facto, or By any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority or risks of contraband or illegal
transportation or trade.
I-26
<PAGE>
Special Hazard Loss Coverage Amount: With respect to the first Distribution
-----------------------------------
Date, $3,565,200. With respect to any Distribution Date after the first
Distribution Date, the lesser of (a) the greatest of (i) 1% of the aggregate of
the principal balances of the Mortgage Loans, (ii) twice the principal balance
of the largest Mortgage Loan and (iii) the aggregate of the principal balances
of all Mortgage Loans secured by Mortgaged Properties located in the single
California postal zip code area having the highest aggregate principal balance
of any such zip code area and (b) the Special Hazard Loss Coverage Amount as of
the Closing Date less the amount, if any, of Special Hazard Losses allocated to
the Certificates since the Closing Date. All principal balances for the purpose
of this definition will be calculated as of the first day of the calendar month
preceding the month of such Distribution Date after giving effect to Scheduled
Payments on the Mortgage Loans then due, whether or not paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
-------------------------------
Special Hazard Loss has occurred.
S&P: Standard & Poor's, a division of The McGraw-Hill Companies, Inc. If S&P
---
is designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to S&P shall be Standard & Poor's, 26
Broadway, 15th Floor, New York, New York 10004, Attention: Mortgage Surveillance
Monitoring, or such other address as S&P may hereafter furnish to the Depositor
and the Master Servicer.
Startup Day: The Closing Date.
-----------
Stated Principal Balance: As to any Mortgage Loan and Due Date, the unpaid
-------------------------
principal balance of such Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor.
Streamlined Documentation Mortgage Loan: Any Mortgage Loan originated
------------------------------------------
pursuant to the Seller's Streamlined Loan Documentation Program then in effect.
Subordinated Certificates: As specified in the Preliminary Statement.
-------------------------
Subordinated Percentage: As to any Distribution Date, 100% minus the Senior
-----------------------
Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date, 100% minus
----------------------------------
the Senior Prepayment Percentage for such Distribution Date.
I-27
<PAGE>
Subordinated Principal Distribution Amount: With respect to any Distribution
------------------------------------------
Date, an amount equal to (A) the sum of (i) the Subordinated Percentage of the
applicable Non-PO Percentage of all amounts described in clauses (a) through (d)
of the definition of "Non-PO Formula Principal Amount" for such Distribution
Date, (ii) with respect to each Mortgage Loan that became a Liquidated Mortgage
Loan during the calendar month preceding the month of such Distribution Date,
the applicable Non-PO Percentage of the amount of the Liquidation Proceeds
allocated to principal received with respect thereto remaining after application
thereof pursuant to clause (ii) of the definition of Senior Principal
Distribution Amount, up to the Subordinated Percentage of the applicable Non-PO
Percentage of the Stated Principal Balance of such Mortgage Loan and (iii) the
Subordinated Prepayment Percentage of the applicable Non-PO Percentage of all
amounts described in clause (f) of the definition of "Non-PO Formula Principal
Amount" for such Distribution Date reduced by (B) the amount of any payments in
respect of Class PO Deferred Amounts on the related Distribution Date.
Subservicer: Any person to whom the Master Servicer has contracted for the
-----------
servicing of all or a portion of the Mortgage Loans pursuant to Section 3.02
hereof.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for a
--------------------------
Deleted Mortgage Loan which must, on the date of such substitution, as confirmed
in a Request for Release, substantially in the form of Exhibit M, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) be accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value
Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a remaining
term to maturity no greater than (and not more than one year less than that of)
the Deleted Mortgage Loan; (v) not be a Cooperative Loan unless the Deleted
Mortgage Loan was a Cooperative Loan and (vi) comply with each representation
and warranty set forth in Section 2.03 hereof.
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
--------------------------------
to Section 2.03.
Support Classes: As specified in the Preliminary Statement.
---------------
Targeted Balances: With respect to any Targeted Principal Classes and any
------------------
Distribution Date appearing in Schedule IV hereto, the applicable amount
appearing opposite such Distribution Date for such respective Class.
Targeted Principal Classes: As specified in the Preliminary Statement.
--------------------------
Tax Matters Person: The person designated as "tax matters person" in the
-------------------
manner provided under Treasury regulation ss. 1.860F-4(d) and temporary Treasury
regulation ss. 301.6231(a)(7)1T. Initially, the Tax Matters Person shall be the
Trustee.
I-28
<PAGE>
Tax Matters Person Certificate: The Class A-R Certificate with a
----------------------------------
Denomination of $0.05.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
--------
in a Residual Certificate.
Trustee: The Bank of New York and its successors and, if a successor trustee
-------
is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to one-twelfth of
-----------
the Trustee Fee Rate multiplied by the Pool Stated Principal Balance with
respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum rate
----------------
agreed upon in writing on or prior to the Closing Date by the Trustee and the
Depositor.
Trust Fund: The corpus of the trust created hereunder consisting of (i) the
----------
Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Certificate Account and the
Distribution Account all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; and
(iv) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Voting Rights: The portion of the voting rights of all of the Certificates
-------------
which is allocated to any Certificate. As of any date of determination, (a) 1%
of all Voting Rights shall be allocated to each Class of Notional Amount
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (b) the remaining Voting Rights (or 100% of the Voting Rights if
there is no Class of Notional Amount Certificates) shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
I-29
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
----------------------------
(a) The Seller, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Depositor, without recourse, all the right, title and interest of the Seller in
and to the Mortgage Loans, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date and all interest and principal payments on the Mortgage Loans
received prior to the Cut-off Date in respect of installments of interest and
principal due thereafter, but not including payments of principal and interest
due and payable on the Mortgage Loans on or before the Cut-off Date. On or prior
to the Closing Date, the Seller shall deliver to the Depositor or, at the
Depositor's direction, to the Trustee or other designee of the Depositor, the
Mortgage File for each Mortgage Loan listed in the Mortgage Loan Schedule
(except that, in the case of the Delay Delivery Mortgage Loans, such delivery
may take place within thirty (30) days following the Closing Date). Such
delivery of the Mortgage Files shall be made against payment by the Depositor of
the purchase price, previously agreed to by the Seller and Depositor, for the
Mortgage Loans. With respect to any Mortgage Loan that does not have a first
payment date on or before the Due Date in the month of the first Distribution
Date, the Seller shall deposit into the Distribution Account on or before the
Distribution Account Deposit Date relating to the first Distribution Date, an
amount equal to one month's interest at the related Adjusted Mortgage Rate on
the Cut-off Date Principal Balance of such Mortgage Loan.
(b) The Depositor, concurrently with the execution and
delivery hereof, hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the Trust
Fund together with the Depositor's right to require the Seller to cure any
breach of a representation or warranty made herein by the Seller or to
repurchase or substitute for any affected Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth
in clause (b) above, the Depositor has delivered or caused to be delivered to
the Trustee (or, in the case of the Delay Delivery Mortgage Loans, will deliver
or cause to be delivered to the Trustee within thirty (30) days following the
Closing Date) for the benefit of the Certificateholders the following documents
or instruments with respect to each Mortgage Loan so assigned:
(i) (A) the original Mortgage Note endorsed by manual
or facsimile signature in blank in the following form: "Pay to
the order of ____________ without recourse," with all
intervening endorsements showing a complete chain of
endorsement from the originator to the Person endorsing the
Mortgage Note
II-1
<PAGE>
(each such endorsement being sufficient to transfer all right,
title and interest of the party so endorsing, as noteholder or
assignee thereof, in and to that Mortgage Note); or
(B) with respect to any Lost Mortgage Note,
a lost note affidavit from the Seller stating that
the original Mortgage Note was lost or destroyed,
together with a copy of such Mortgage Note;
(ii) except as provided below, the original recorded
Mortgage or a copy of such Mortgage certified by the Seller as
being a true and complete copy of the Mortgage;
(iii) a duly executed assignment of the Mortgage
(which may be included in a blanket assignment or
assignments), together with, except as provided below, all
interim recorded assignments of such mortgage (each such
assignment, when duly and validly completed, to be in
recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which
the assignment relates); provided that, if the related
Mortgage has not been returned from the applicable public
recording office, such assignment of the Mortgage may exclude
the information to be provided by the recording office;
(iv) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any;
(v) except as provided below, the original or
duplicate original lender's title policy and all riders
thereto; and
(vi) in the case of a Cooperative Loan, the originals
of the following documents or instruments:
(a) The Coop Shares, together with a stock
power in blank;
(b) The executed Security Agreement;
(c) The executed Proprietary Lease;
(d) The executed Recognition Agreement;
(e) The executed assignment of Recognition
Agreement;
(f) The executed UCC-1 financing statement
with evidence of recording thereon which
have been filed in all places required to
II-2
<PAGE>
perfect the Seller's interest in the Coop
Shares and the Proprietary Lease; and
(g) Executed UCC-3 financing statements or
other appropriate UCC financing statements
required by state law, evidencing a complete
and unbroken line from the mortgagee to the
Trustee with evidence of recording thereon
(or in a form suitable for recordation).
In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) the original recorded Mortgage, (b) all interim
recorded assignments or (c) the lender's title policy (together with all riders
thereto) satisfying the requirements of clause (ii), (iii) or (v) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office in the case of clause (ii) or (iii) above, or because the title
policy has not been delivered to either the Master Servicer or the Depositor by
the applicable title insurer in the case of clause (v) above, the Depositor
shall promptly deliver to the Trustee, in the case of clause (ii) or (iii)
above, such original Mortgage or such interim assignment, as the case may be,
with evidence of recording indicated thereon upon receipt thereof from the
public recording office, or a copy thereof, certified, if appropriate, by the
relevant recording office, but in no event shall any such delivery of the
original Mortgage and each such interim assignment or a copy thereof, certified,
if appropriate, by the relevant recording office, be made later than one year
following the Closing Date, or, in the case of clause (v) above, no later than
120 days following the Closing Date; provided, however, in the event the
Depositor is unable to deliver by such date each Mortgage and each such interim
assignment by reason of the fact that any such documents have not been returned
by the appropriate recording office, or, in the case of each such interim
assignment, because the related Mortgage has not been returned by the
appropriate recording office, the Depositor shall deliver such documents to the
Trustee as promptly as possible upon receipt thereof and, in any event, within
720 days following the Closing Date. The Depositor shall forward or cause to be
forwarded to the Trustee (a) from time to time additional original documents
evidencing an assumption or modification of a Mortgage Loan and (b) any other
documents required to be delivered by the Depositor or the Master Servicer to
the Trustee. In the event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan and the public
recording office requires the presentation of a "lost instruments affidavit and
indemnity" or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Master
Servicer shall execute and deliver or cause to be executed and delivered such a
document to the public recording office. In the case where a public recording
office retains the original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording office, the Seller shall deliver to
the Trustee a copy of such Mortgage certified by such public recording office to
be a true and complete copy of the original recorded Mortgage.
II-3
<PAGE>
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Trustee
shall (i) affix the Trustee's name to each assignment of Mortgage, as the
assignee thereof, (ii) cause such assignment to be in proper form for recording
in the appropriate public office for real property records and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the assignments of the Mortgages to the Trustee, except that, with
respect to any assignments of Mortgage as to which the Trustee has not received
the information required to prepare such assignment in recordable form, the
Trustee's obligation to do so and to deliver the same for such recording shall
be as soon as practicable after receipt of such information and in any event
within thirty (30) days after receipt thereof and that the Trustee need not
cause to be recorded any assignment which relates to a Mortgage Loan (a) the
Mortgaged Property and Mortgage File relating to which are located in California
or (b) in any other jurisdiction under the laws of which in the opinion of
counsel the recordation of such assignment is not necessary to protect the
Trustee's and the Certificateholders' interest in the related Mortgage Loan.
In the case of Mortgage Loans that have been prepaid in full
as of the Closing Date, the Depositor, in lieu of delivering the above documents
to the Trustee, will deposit in the Certificate Account the portion of such
payment that is required to be deposited in the Certificate Account pursuant to
Section 3.08 hereof.
Notwithstanding anything to the contrary in this Agreement,
within thirty days after the Closing Date, the Seller shall either (i) deliver
to the Depositor, or at the Depositor's direction, to the Trustee or other
designee of the Depositor the Mortgage File as required pursuant to this Section
2.01 for each Delay Delivery Mortgage Loan or (ii) (A) substitute a Substitute
Mortgage Loan for the Delay Delivery Mortgage Loan or (B) repurchase the Delayed
Delivery Mortgage Loan, which substitution or repurchase shall be accomplished
in the manner and subject to the conditions set forth in Section 2.03 (treating
each Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for purposes of
such Section 2.03), provided, however, that if the Seller fails to deliver a
Mortgage File for any Delay Delivery Mortgage Loan within the thirty-day period
provided in the prior sentence, the Seller shall use its best reasonable efforts
to effect a substitution, rather than a repurchase of, such Deleted Mortgage
Loan and provided further that the cure period provided for in Section 2.02 or
in Section 2.03 shall not apply to the initial delivery of the Mortgage File for
such Delay Delivery Mortgage Loan, but rather the Seller shall have five (5)
Business Days to cure such failure to deliver. At the end of such thirty-day
period, the Trustee shall send a Delay Delivery Certification for the Delay
Delivery Mortgage Loans delivered during such thirty-day period in accordance
with the provisions of Section 2.02.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
-------------------------------------------
The Trustee acknowledges receipt of the documents identified
in the Initial Certification in the form annexed hereto as Exhibit F and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and
II-4
<PAGE>
that it holds or will hold such other assets as are included in the Trust Fund,
in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that it will maintain possession of
the Mortgage Notes in the State of California, unless otherwise permitted by the
Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Master Servicer and the Seller an Initial Certification in
the form annexed hereto as Exhibit F. Based on its review and examination, and
only as to the documents identified in such Initial Certification, the Trustee
acknowledges that such documents appear regular on their face and relate to such
Mortgage Loan. 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.
On or about the thirtieth (30th) day after the Closing Date,
the Trustee shall deliver to the Depositor, the Master Servicer and the Seller a
Delay Delivery Certification in the form annexed hereto as Exhibit G, with any
applicable exceptions noted thereon.
Not later than 90 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and the Seller a Final
Certification in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.
If, in the course of such review, 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; provided, however that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The Seller shall
promptly correct or cure such defect within 90 days from the date it was so
notified of such defect and, if the Seller does not correct or cure such defect
within such period, the Seller shall either (a) substitute for the related
Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 90 days from
the date the Seller was notified of such defect in writing at the Purchase Price
of such Mortgage Loan; provided, however, that in no event shall such
substitution or purchase occur more than 540 days from the Closing Date, except
that if the substitution or purchase of a Mortgage Loan pursuant to this
provision is required by reason of a delay in delivery of any documents by the
appropriate recording office, and there is a dispute between either the Master
Servicer or the Seller and the Trustee over the location or status of the
recorded document, then such substitution or purchase shall occur within 720
days from the Closing Date. The Trustee shall deliver written notice to each
Rating Agency within 270 days from the Closing Date indicating each Mortgage
Loan (a) which has not
II-5
<PAGE>
been returned by the appropriate recording office or (b) as to which there is a
dispute as to location or status of such Mortgage Loan. Such notice shall be
delivered every 90 days thereafter until the related Mortgage Loan is returned
to the Trustee. Any such substitution pursuant to (a) above or purchase pursuant
to (b) above shall not be effected prior to the delivery to the Trustee of the
Opinion of Counsel required by Section 2.05 hereof, if any, and any substitution
pursuant to (a) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit N. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Mortgage Loan
shall be deposited by the Seller in the Certificate Account on or prior to the
Distribution Account Deposit Date for the Distribution Date in the month
following the month of repurchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File to the Seller and shall execute and
deliver at the Seller's request such instruments of transfer or assignment
prepared by the Seller, in each case without recourse, as shall be necessary to
vest in the Seller, or a designee, the Trustee's interest in any Mortgage Loan
released pursuant hereto.
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.
It is understood and agreed that the obligation of the Seller
to substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 above shall constitute the sole remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against the Seller.
SECTION 2.03. Representations, Warranties and Covenants of the Seller
-------------------------------------------------------
and Master Servicer.
-------------------
(a) Countrywide Home Loans, Inc., in its capacities as Seller
and Master Servicer, hereby makes the representations and warranties set forth
in Schedule II hereto, and by this reference incorporated herein, to the
Depositor and the Trustee, as of the Closing Date, or if so specified therein,
as of the Cut-off Date.
(b) The Seller, in its capacity as Seller, hereby makes the
representations and warranties set forth in Schedule III hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering
II-6
<PAGE>
such breach shall give prompt notice thereof to the other parties. The Seller
hereby covenants that within 90 days of the earlier of its discovery or its
receipt of written notice from any party of a breach of any representation or
warranty made pursuant to Section 2.03(b) which materially and adversely affects
the interests of the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects, and if such breach is not so cured, shall, (i)
if such 90-day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Substitute Mortgage Loan, in the manner and
subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided, however, that any such substitution
pursuant to (i) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05 hereof, if any, and any such
substitution pursuant to (i) above shall not be effected prior to the additional
delivery to the Trustee of a Request for Release substantially in the form of
Exhibit N and the Mortgage File for any such Substitute Mortgage Loan. The
Seller shall promptly reimburse the Master Servicer and the Trustee for any
expenses reasonably incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach. With respect to the representations and
warranties described in this Section which are made to the best of the Seller's
knowledge, if it is discovered by either the Depositor, the Seller or the
Trustee that the substance of such representation and warranty is inaccurate and
such inaccuracy materially and adversely affects the value of the related
Mortgage Loan or the interests of the Certificateholders therein,
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Substitute Mortgage Loan or Loans, the
Seller shall deliver to the Trustee for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the related assignment of the Mortgage, and
such other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of substitution shall not be part of the
Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Master Servicer
shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the substitution of the
Substitute Mortgage Loan or Loans and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Substitute Mortgage Loan or Loans shall be subject to-the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b) with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Certificate Account of the
II-7
<PAGE>
amount required to be deposited therein in connection with such substitution as
described in the following paragraph, the Trustee shall release the Mortgage
File held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the Seller and shall execute and deliver at the Seller's
direction such instruments of transfer or assignment prepared by the Seller, in
each case without recourse, as shall be necessary to vest title in the Seller,
or its designee, the Trustee's interest in any Deleted Mortgage Loan substituted
for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of the scheduled principal portion of the monthly
payments due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount") plus an amount equal to the aggregate of any
unreimbursed Advances with respect to such Deleted Mortgage Loans shall be
deposited in the Certificate Account by the Seller on or before the Distribution
Account Deposit Date for the Distribution Date in the month succeeding the
calendar month during which the related Mortgage Loan became required to be
purchased or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.05 on or before the Distribution Account Deposit Date for
the Distribution Date in the month following the month during which the Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.05 and receipt of a Request for Release in the form of
Exhibit N hereto, the Trustee shall release the related Mortgage File held for
the benefit of the Certificateholders to such Person, and the Trustee shall
execute and deliver at such Person's direction such instruments of transfer or
assignment prepared by such Person, in each case without recourse, as shall be
necessary to transfer title from the Trustee. It is understood and agreed that
the obligation under this Agreement of any Person to cure, repurchase or replace
any Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole remedy against such Persons respecting such breach available
to Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.
SECTION 2.04. Representations and Warranties of the Depositor as to
-------------------------------------------------------
the Mortgage Loans.
------------------
The Depositor hereby represents and warrants to the Trustee
with respect to each Mortgage Loan as of the date hereof or such other date set
forth herein that as of the
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Closing Date, and following the transfer of the Mortgage Loans to it by the
Seller, the Depositor had good title to the Mortgage Loans and the Mortgage
Notes were subject to no offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the
Trustee all of its rights with respect to the Mortgage Loans including, without
limitation, the representations and warranties of the Seller made pursuant to
Section 2.03(b) hereof, together with all rights of the Depositor to require the
Seller to cure any breach thereof or to repurchase or substitute for any
affected Mortgage Loan in accordance with this Agreement.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee. Upon discovery by the Depositor or the Trustee of a breach
of any of the foregoing representations and warranties set forth in this Section
2.04 (referred to herein as a "breach"), which breach materially and adversely
affects the interest of the Certificateholders, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
-----------------------------------------------------
Substitutions.
-------------
(a) Notwithstanding any contrary provision of this Agreement,
no substitution pursuant to Section 2.02 or Section 2.03 shall be made more than
90 days after the Closing Date unless the Seller delivers to the Trustee an
Opinion of Counsel, which Opinion of Counsel shall not be at the expense of
either the Trustee or the Trust Fund, addressed to the Trustee, to the effect
that such substitution will not (i) result in the imposition of the tax on
"prohibited transactions" on the Trust Fund or contributions after the Startup
Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively,
or (ii) cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Master
Servicer, or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the Seller, at the Seller's
option, to either (i) substitute, if the conditions in Section 2.03(c) with
respect to substitutions are satisfied, a Substitute Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty made pursuant to Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty contained in Section
2.03.
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SECTION 2.06. Execution and Delivery of Certificates.
--------------------------------------
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has executed
and delivered to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing directly or indirectly the entire ownership
of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
SECTION 2.07. REMIC Matters.
-------------
The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. The "tax matters person" with respect to each REMIC hereunder
shall be the Trustee and the Trustee shall hold the Tax Matters Person
Certificate. Each REMIC's fiscal year shall be the calendar year.
SECTION 2.08. Covenants of the Master Servicer.
--------------------------------
The Master Servicer hereby covenants to the Depositor and the
Trustee as follows:
(a) Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements of the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the
Depositor, any affiliate of the Depositor or the Trustee and prepared
by the Master Servicer pursuant to this Agreement will contain any
untrue statement of a material fact or omit to state a material fact
necessary to make such information, certificate, statement or report
not misleading.
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<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Master Servicer to Service Mortgage Loans.
-----------------------------------------
For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with the
terms of this Agreement and customary and usual standards of practice of prudent
mortgage loan servicers. In connection with such servicing and administration,
the Master Servicer shall have full power and authority, acting alone and/or
through Subservicers as provided in Section 3.02 hereof, to do or cause to be
done any and all things that it may deem necessary or desirable in connection
with such servicing and administration, including but not limited to, the power
and authority, subject to the terms hereof (i) to execute and deliver, on behalf
of the Certificateholders and the Trustee, customary consents or waivers and
other instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Master Servicer shall not take any action that
is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Master Servicer shall represent and protect the interests of the Trust Fund in
the same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan, and
shall not make or permit any modification, waiver or amendment of any Mortgage
Loan which would cause the Trust Fund to fail to qualify as a REMIC or result in
the imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Master Servicer, in its
own name or in the name of the Depositor and the Trustee, is hereby authorized
and empowered by the Depositor and the Trustee, when the Master Servicer
believes it appropriate in its reasonable judgment, to execute and deliver, on
behalf of the Trustee, the Depositor, the Certificateholders or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Master Servicer shall prepare and deliver
to the Depositor and/or the Trustee such documents requiring execution and
delivery by either or both of them as are necessary or appropriate to enable the
Master Servicer to service and administer the Mortgage Loans to the extent that
the Master Servicer is not permitted to execute and deliver such documents
pursuant to the preceding sentence. Upon receipt of such documents, the
Depositor and/or the Trustee shall execute such documents and deliver them to
the Master Servicer.
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<PAGE>
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. The costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balances of the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
SECTION 3.02. Subservicing; Enforcement of the Obligations of
-------------------------------------------------------
Servicers.
---------
(a) The Master Servicer may arrange for the subservicing of
any Mortgage Loan by a Subservicer pursuant to a subservicing agreement;
provided, however, that such subservicing arrangement and the terms of the
related subservicing agreement must provide for the servicing of such Mortgage
Loans in a manner consistent with the servicing arrangements contemplated
hereunder. Unless the context otherwise requires, references in this Agreement
to actions taken or to be taken by the Master Servicer in servicing the Mortgage
Loans include actions taken or to be taken by a Subservicer on behalf of the
Master Servicer. Notwithstanding the provisions of any subservicing agreement,
any of the provisions of this Agreement relating to agreements or arrangements
between the Master Servicer and a Subservicer or reference to actions taken
through a Subservicer or otherwise, the Master Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such subservicing agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. All actions of each Subservicer performed
pursuant to the related subservicing agreement shall be performed as an agent of
the Master Servicer with the same force and effect as if performed directly by
the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall
be deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a Subservicer regardless of whether
such payments are remitted by the Subservicer to the Master Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of
-------------------------------------------------------
the Master Servicer.
-------------------
The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to
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<PAGE>
perform, any defaulted obligation of the Master Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights of
the Master Servicer hereunder; provided that the Master Servicer shall not be
relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee. Neither the Trustee nor the Depositor shall have
any responsibility or liability for any action or failure to act by the Master
Servicer nor shall the Trustee or the Depositor be obligated to supervise the
performance of the Master Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Master Servicer.
---------------------------------
In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its successor shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.09 hereof or any acts or omissions of the predecessor Master
Servicer hereunder), (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder including, but not limited to,
repurchases or substitutions of Mortgage Loans pursuant to Section 2.02 or 2.03
hereof, (iv) responsible for expenses of the Master Servicer pursuant to Section
2.03 or (v) deemed to have made any representations and warranties of the Master
Servicer hereunder). Any such assumption shall be subject to Section 7.02
hereof. If the Master Servicer shall for any reason no longer be the Master
Servicer (including by reason of any Event of Default), the Trustee or its
successor shall succeed to any rights and obligations of the Master Servicer
under each subservicing agreement.
The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement or substitute subservicing
agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected or held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of the substitute subservicing
agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate
-------------------------------------------------------
Account; Distribution Account.
-----------------------------
(a) The Master Servicer shall make reasonable efforts in
accordance with the customary and usual standards of practice of prudent
mortgage servicers to collect all payments called for under the terms and
provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Master Servicer
may in its discretion (i) waive any late payment charge or any prepayment charge
or penalty interest in connection with the prepayment of a Mortgage Loan and
(ii) extend the due dates for payments due on a Mortgage Note for a period not
greater than 180 days; provided, however, that the Master Servicer cannot extend
the maturity of any such Mortgage Loan
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<PAGE>
past the date on which the final payment is due on the latest maturing Mortgage
Loan as of the Cut-off Date. In the event of any such arrangement, the Master
Servicer shall make Advances on the related Mortgage Loan in accordance with the
provisions of Section 4.01 during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to be
deposited on a daily basis within one Business Day of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and interest
due on the Mortgage Loans on or before the Cut-off Date) and the following
amounts required to be deposited hereunder:
(i) all payments on account of principal on the Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net of the related Master Servicing Fee;
(iii) all Insurance Proceeds and Liquidation Proceeds, other
than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.09(b), 3.09(d), and in respect of net monthly
rental income from REO Property pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to
Section 4.01; and
(viii) any other amounts required to be deposited hereunder.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to the
monthly payment
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<PAGE>
remitted by the Mortgagor, the Master Servicer shall cause funds to be deposited
into the Certificate Account in an amount required to cause an amount of
interest to be paid with respect to such Mortgage Loan equal to the amount of
interest that has accrued on such Mortgage Loan from the preceding Due Date at
the Mortgage Rate net of the related Master Servicing Fee on such date.
The foregoing requirements for remittance by the Master Servicer shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of prepayment penalties,
late payment charges or assumption fees, if collected, need not be remitted by
the Master Servicer. In the event that the Master Servicer shall remit any
amount not required to be remitted, it may at any time withdraw or direct the
institution maintaining the Certificate Account to withdraw such amount from the
Certificate Account, any provision herein to the contrary notwithstanding. Such
withdrawal or direction may be accomplished by delivering written notice thereof
to the Trustee or such other institution maintaining the Certificate Account
which describes the amounts deposited in error in the Certificate Account. The
Master Servicer shall maintain adequate records with respect to all withdrawals
made pursuant to this Section. All funds deposited in the Certificate Account
shall be held in trust for the Certificateholders until withdrawn in accordance
with Section 3.08.
(c) [Reserved]
(d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Master Servicer to the
Trustee pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Master Servicer pursuant to
Section 3.05(d) in connection with any losses on Permitted Investments;
and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount
not required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Master Servicer.
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<PAGE>
(e) Each institution at which the Certificate Account or the
Distribution Account is maintained shall invest the funds therein as directed in
writing by the Master Servicer in Permitted Investments, which shall mature not
later than (i) in the case of the Certificate Account, the second Business Day
next preceding the related Distribution Account Deposit Date (except that if
such Permitted Investment is an obligation of the institution that maintains
such account, then such Permitted Investment shall mature not later than the
Business Day next preceding such Distribution Account Deposit Date) and (ii) in
the case of the Distribution Account, the Business Day next preceding the
Distribution Date (except that if such Permitted Investment is an obligation of
the institution that maintains such fund or account, then such Permitted
Investment shall mature not later than such Distribution Date) and, in each
case, shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any such
investment of funds on deposit in the Certificate Account or the Distribution
Account shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The amount
of any realized losses in the Certificate Account or the Distribution Account
incurred in any such account in respect of any such investments shall promptly
be deposited by the Master Servicer in the Certificate Account or paid to the
Trustee for deposit into the Distribution Account, as applicable. The Trustee in
its fiduciary capacity shall not be liable for the amount of any loss incurred
in respect of any investment or lack of investment of funds held in the
Certificate Account or the Distribution Account and made in accordance with this
Section 3.05.
(f) The Master Servicer shall give notice to the Trustee, the
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account prior to any change thereof. The Trustee
shall give notice to the Master Servicer, the Seller, each Rating Agency and the
Depositor of any proposed change of the location of the Distribution Account
prior to any change thereof.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
-------------------------------------------------------
Escrow Accounts.
---------------
(a) To the extent required by the related Mortgage Note and
not violative of current law, the Master Servicer shall establish and maintain
one or more accounts (each, an "Escrow Account") and deposit and retain therein
all collections from the Mortgagors (or advances by the Master Servicer) for the
payment of taxes, assessments, hazard insurance premiums or comparable items for
the account of the Mortgagors. Nothing herein shall require the Master Servicer
to compel a Mortgagor to establish an Escrow Account in violation of applicable
law.
(b) Withdrawals of amounts so collected from the Escrow
Accounts may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer out of related collections for any payments made
pursuant to Sections 3.01 hereof
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<PAGE>
(with respect to taxes and assessments and insurance premiums) and 3.09 hereof
(with respect to hazard insurance), to refund to any Mortgagors any sums
determined to be overages, to pay interest, if required by law or the terms of
the related Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow
Account or to clear and terminate the Escrow Account at the termination of this
Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall not
be a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to
in Section 3.06(a) that are not timely paid by the Mortgagors on the date when
the tax, premium or other cost for which such payment is intended is due, but
the Master Servicer shall be required so to advance only to the extent that such
advances, in the good faith judgment of the Master Servicer, will be recoverable
by the Master Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise.
SECTION 3.07. Access to Certain Documentation and Information
-------------------------------------------------------
Regarding the Mortgage Loans.
----------------------------
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance information and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the office designated by the Master
Servicer.
Upon reasonable advance notice in writing, the Master Servicer
will provide to each Certificateholder which is a savings and loan association,
bank or insurance company certain reports and reasonable access to information
and documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Master Servicer in
providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate Account and
-------------------------------------------------------
Distribution Account.
--------------------
(a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not
previously retained by the Master Servicer) the servicing compensation
to which it is entitled pursuant to Section 3.14, and to pay to the
Master Servicer, as additional servicing compensation, earnings on or
investment income with respect to funds in or credited to the
Certificate Account;
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<PAGE>
(ii) to reimburse the Master Servicer for unreimbursed
Advances made by it, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on the Mortgage
Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer for Insured Expenses
from the related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a) unreimbursed
Servicing Advances, the Master Servicer's right to reimbursement
pursuant to this clause (a) with respect to any Mortgage Loan being
limited to amounts received on such Mortgage Loan(s) which represent
late recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.06 and (b) for unpaid Master
Servicing Fees as provided in Section 3.11 hereof;
(vi) to pay to the purchaser, with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received thereon
after the date of such purchase;
(vii) to reimburse the Seller, the Master Servicer or the
Depositor for expenses incurred by any of them and reimbursable
pursuant to Section 6.03 hereof;
(viii) to withdraw any amount deposited in the Certificate
Account and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the related Available Funds and the Trustee
Fee for such Distribution Date and remit such amount to the Trustee for
deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Certificate Account pursuant to such
subclauses (i), (ii), (iv), (v) and (vi). Prior to making any withdrawal from
the Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loans(s),
and their respective portions of such Nonrecoverable Advance.
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<PAGE>
(b) The Trustee shall withdraw funds from the Distribution
Account for distributions to Certificateholders, in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to withhold pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds in
the Distribution Account;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited
therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
-------------------------------------------------------
Primary Insurance Policies.
--------------------------
(a) The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan or (ii) the greater of (y) the outstanding principal
balance of the Mortgage Loan and (z) an amount such that the proceeds of such
policy shall be sufficient to prevent the Mortgagor and/or the mortgagee from
becoming a co-insurer. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard mortgagee
clause. Any amounts collected by the Master Servicer under any such policies
(other than the amounts to be applied to the restoration or repair of the
related Mortgaged Property or amounts released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures) shall be deposited in
the Certificate Account. Any cost incurred by the Master Servicer in maintaining
any such insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders or remittances to the Trustee for their
benefit, be added to the principal balance of the Mortgage Loan, notwithstanding
that the terms of the Mortgage Loan so permit. Such costs shall be recoverable
by the Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds to the extent permitted by Section 3.08 hereof. It is
understood and agreed that no earthquake or other additional insurance is to be
required of any Mortgagor or maintained on property acquired in respect of a
Mortgage other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance. If the
Mortgaged Property is located at the time of origination of the Mortgage Loan in
a federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the
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<PAGE>
least of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements which are part of such Mortgaged
Property, and (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the national flood insurance program.
(b) In the event that the Master Servicer shall obtain and
maintain a blanket policy insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first sentence of this Section, 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 that would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as Master
Servicer of the Mortgage Loans, the Master Servicer agrees to present, on behalf
of itself, the Depositor, and the Trustee for the benefit of the
Certificateholders, claims under any such blanket policy.
(c) The Master Servicer shall not take any action which would
result in non-coverage under any applicable Primary Insurance Policy of any loss
which, but for the actions of the Master Servicer, would have been covered
thereunder. The Master Servicer shall not cancel or refuse to renew any such
Primary Insurance Policy that is in effect at the date of the initial issuance
of the Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for such canceled or non-renewed policy is
maintained with a Qualified Insurer.
Except with respect to any Lender PMI Mortgage Loans, the Master
Servicer shall not be required to maintain any Primary Insurance Policy (i) with
respect to any Mortgage Loan with a Loan-to-Value Ratio less than or equal to
80% as of any date of determination or, based on a new appraisal, the principal
balance of such Mortgage Loan represents 80% or less of the new appraised value
or (ii) if maintaining such Primary Insurance Policy is prohibited by applicable
law. With respect to the Lender PMI Mortgage Loans, the Master Servicer shall
maintain the Primary Insurance Policy for the life of such Mortgage Loans.
The Master Servicer agrees to effect the timely payment of the premiums
on each Primary Insurance Policy, and such costs not otherwise recoverable shall
be recoverable by the Master Servicer from the related liquidation proceeds.
(d) In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present on behalf of itself, the
Trustee and Certificateholders, claims to the insurer under any Primary
Insurance Policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any Primary Insurance Policies respecting
defaulted Mortgage Loans. Any amounts collected by
III-10
<PAGE>
the Master Servicer under any Primary Insurance Policies shall be deposited in
the Certificate Account.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
-------------------------------------------------------
Agreements.
----------
(a) Except as otherwise provided in this Section, when any
property subject to a Mortgage has been conveyed by the Mortgagor, the Master
Servicer shall to the extent that it has knowledge of such conveyance, enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Master
Servicer is not required to exercise such rights with respect to a Mortgage Loan
if the Person to whom the related Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that the
Master Servicer is prohibited by law from enforcing any such due-on-sale clause,
or if coverage under any Required Insurance Policy would be adversely affected,
or if nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.10(b), to take or enter into an assumption and
modification agreement from or with the person to whom such property has been or
is about to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the Mortgage Loan shall continue to be
covered (if-so covered before the Master Servicer enters such agreement) by the
applicable Required Insurance Policies. The Master Servicer, subject to Section
3.10(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Master Servicer shall not
be deemed to be in default under this Section by reason of any transfer or
assumption which the Master Servicer reasonably believes it is restricted by law
from preventing, for any reason whatsoever.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.10(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person is to enter into an assumption agreement or modification
agreement or supplement to the Mortgage Note or Mortgage that requires the
signature of the Trustee, or if an instrument of release signed by the Trustee
is required releasing the Mortgagor from liability on the Mortgage Loan, the
Master Servicer shall prepare and deliver or cause to be prepared and delivered
to the Trustee for signature and shall direct, in writing, the Trustee to
execute the assumption agreement with the Person to whom the Mortgaged Property
is to be conveyed and such modification agreement or supplement to the Mortgage
Note or Mortgage or other
III-11
<PAGE>
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. In addition, the substitute Mortgagor and the Mortgaged Property
must be acceptable to the Master Servicer in accordance with its underwriting
standards as then in effect. Together with each such substitution, assumption or
other agreement or instrument delivered to the Trustee for execution by it, the
Master Servicer shall deliver an Officer's Certificate signed by a Servicing
Officer stating that the requirements of this subsection have been met in
connection therewith. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Master Servicer as additional
servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase
-------------------------------------------------------
of Certain Mortgage Loans.
-------------------------
The Master Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
meet the requirements of the insurer under any Required Insurance Policy;
provided, however, that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Certificate Account). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the liquidation proceeds with respect to the related
Mortgaged Property, as provided in the definition of Liquidation Proceeds. If
the Master Servicer has knowledge that a Mortgaged Property which the Master
Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a 1 mile radius of any site listed in the
Expenditure Plan for the Hazardous Substance Clean Up Bond Act of 1984 or other
site with environmental or hazardous waste risks known to the Master Servicer,
the Master Servicer will, prior to acquiring the Mortgaged Property, consider
such risks and only take action in accordance with its established environmental
review procedures.
III-12
<PAGE>
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Master Servicer shall
ensure that the title to such REO Property references the Pooling and Servicing
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Certificateholders for
the period prior to the sale of such REO Property. The Master Servicer shall
prepare for and deliver to the Trustee a statement with respect to each REO
Property that has been rented showing the aggregate rental income received and
all expenses incurred in connection with the management and maintenance of such
REO Property at such times as is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Certificate
Account no later than the close of business on each Determination Date. The
Master Servicer shall perform the tax reporting and withholding required by
Sections 1445 and 6050J of the Code with respect to foreclosures and
abandonments, the tax reporting required by Section 6050H of the Code with
respect to the receipt of mortgage interest from individuals and any tax
reporting required by Section 6050P of the Code with respect to the cancellation
of indebtedness by certain financial entities, by preparing such tax and
information returns as may be required, in the form required, and delivering the
same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged
Property prior to two years after its acquisition by the Trust Fund unless the
Trustee shall have been supplied with an Opinion of Counsel to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
two-year period will not result in the imposition of taxes on "prohibited
transactions" of any REMIC hereunder as defined in section 860F of the Code or
cause any REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC hereunder to
the imposition of any federal, state or local income taxes on the income earned
from such Mortgaged Property under Section 860G(c) of the Code or otherwise,
unless the Master
III-13
<PAGE>
Servicer has agreed to indemnify and hold harmless the Trust Fund with respect
to the imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of
whose obligor is not a United States Person, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Master Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on such Mortgage Loan.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO Properties,
net of reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Master Servicing Fees, Advances and Servicing Advances, shall be
applied to the payment of principal of and interest on the related defaulted
Mortgage Loans (with interest accruing as though such Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Certificate Account. To the
extent the net income received during any calendar month is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan for such calendar month, such excess
shall be considered to be a partial prepayment of principal of the related
Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well
as any income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Master Servicer for any related unreimbursed
Servicing Advances and Master Servicing Fees; second, to reimburse the Master
Servicer for any unreimbursed Advances; third, to reimburse the Certificate
Account for any Nonrecoverable Advances (or portions thereof) that were
previously withdrawn by the Master Servicer pursuant to Section 3.08(a)(iii)
that related to such Mortgage Loan; fourth, to accrued and unpaid interest (to
the extent no Advance has been made for such amount or any such Advance has been
reimbursed) on the Mortgage Loan or related REO Property, at the Adjusted Net
Mortgage Rate to the Due Date occurring in the month in which such amounts are
required to be distributed; and fifth, as a recovery of principal of the
Mortgage Loan. Excess Proceeds, if any, from the liquidation of a Liquidated
Mortgage Loan will be retained by the Master Servicer as additional servicing
compensation pursuant to Section 3.14.
The Master Servicer, in its sole discretion, shall have the
right to purchase for its own account from the Trust Fund any Mortgage Loan
which is 91 days or more delinquent at a price equal to the Purchase Price. The
Purchase Price for any Mortgage
III-14
<PAGE>
Loan purchased hereunder shall be deposited in the Certificate Account and the
Trustee, upon receipt of a certificate from the Master Servicer in the form of
Exhibit N hereto, shall release or cause to be released to the purchaser of such
Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such Mortgage
Loan, in each case without recourse, as shall be necessary to vest in the
purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and
the purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage
Loan, and all security and documents, free of any further obligation to the
Trustee or the Certificateholders with respect thereto.
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by delivering, or causing to be delivered a "Request for
Release" substantially in the form of Exhibit N. Upon receipt of such request,
the Trustee shall promptly release the related Mortgage File to the Master
Servicer, and the Trustee shall at the Master Servicer's direction execute and
deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage in each case provided by the Master Servicer, together
with the Mortgage Note with written evidence of cancellation thereon. Expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Mortgagor. From time to time and
as shall be appropriate for the servicing or foreclosure of any Mortgage Loan,
including for such purpose, collection under any policy of flood insurance, any
fidelity bond or errors or omissions policy, or for the purposes of effecting a
partial release of any Mortgaged Property from the lien of the Mortgage or the
making of any corrections to the Mortgage Note or the Mortgage or any of the
other documents included in the Mortgage File, the Trustee shall, upon delivery
to the Trustee of a Request for Release in the form of Exhibit M signed by a
Servicing Officer, release the Mortgage File to the Master Servicer. Subject to
the further limitations set forth below, the Master Servicer shall cause the
Mortgage File or documents so released to be returned to the Trustee when the
need therefor by the Master Servicer no longer exists, unless the Mortgage Loan
is liquidated and the proceeds thereof are deposited in the Certificate Account,
in which case the Master Servicer shall deliver to the Trustee a Request for
Release in the form of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other
III-15
<PAGE>
remedies or rights provided by the Mortgage Note or the Mortgage or otherwise
available at law or in equity.
SECTION 3.13. Documents Records and Funds in Possession of Master
-------------------------------------------------------
Servicer to be Held for the Trustee.
-----------------------------------
Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or which otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account or any Escrow Account, or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Master Servicer shall be entitled to
set off against and deduct from any such funds any amounts that are properly due
and payable to the Master Servicer under this Agreement.
SECTION 3.14. Servicing Compensation.
----------------------
As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain or withdraw from the Certificate Account an
amount equal to the Master Servicing Fee for each Mortgage Loan, provided that
the aggregate Master Servicing Fee with respect to any Distribution Date shall
be reduced (i) by an amount equal to the aggregate of the Prepayment Interest
Shortfalls, if any, with respect to such Distribution Date, but not below an
amount equal to one-half of the aggregate Master Servicing Fee for such
Distribution Date before reduction thereof in respect of such Prepayment
Interest Shortfalls, and (ii) with respect to the first Distribution Date, an
amount equal to any amount to be deposited into the Distribution Account by the
Depositor pursuant to Section 2.01(a) and not so deposited.
Additional servicing compensation in the form of Excess
Proceeds, Prepayment Interest Excess, prepayment penalties, assumption fees,
late payment charges and all income and gain net of any losses realized from
Permitted Investments shall be retained by the Master Servicer to the extent not
required to be deposited in the Certificate Account
III-16
<PAGE>
pursuant to Section 3.05 hereof. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its master servicing activities
hereunder (including payment of any premiums for hazard insurance and any
Primary Insurance Policy and maintenance of the other forms of insurance
coverage required by this Agreement) and shall not be entitled to reimbursement
therefor except as specifically provided in this Agreement.
SECTION 3.15. Access to Certain Documentation.
-------------------------------
The Master Servicer shall provide to the OTS and the FDIC and
to comparable regulatory authorities supervising Holders of Subordinated
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices designated by the Master Servicer.
Nothing in this Section shall limit the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach of
this Section.
SECTION 3.16. Annual Statement as to Compliance.
---------------------------------
The Master Servicer shall deliver to the Depositor and the
Trustee on or before 120 days after the end of the Master Servicer's fiscal
year, commencing with its 1999 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the Master
Servicer under this Agreement has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency.
SECTION 3.17. Annual Independent Public Accountants' Servicing
-------------------------------------------------------
Statement; Financial Statements.
-------------------------------
On or before 120 days after the end of the Master Servicer's
fiscal year, commencing with its 1999 fiscal year, the Master Servicer at its
expense shall cause a nationally or regionally recognized firm of independent
public accountants (who may also render other services to the Master Servicer,
the Seller or any affiliate thereof) which is a member of the American Institute
of Certified Public Accountants to furnish a statement to the Trustee and the
Depositor to the effect that such firm has examined certain documents and
records relating to the servicing of the Mortgage Loans under this Agreement or
of mortgage loans under pooling and servicing agreements substantially similar
to this Agreement (such statement to have attached thereto a schedule setting
forth the pooling and
III-17
<PAGE>
servicing agreements covered thereby) and that, on the basis of such
examination, conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FNMA and FHLMC, such servicing has been conducted in compliance
with such pooling and servicing agreements except for such significant
exceptions or errors in records that, in the opinion of such firm, the Uniform
Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FNMA and FHLMC requires it to report. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FNMA and FHLMC (rendered within one year of such statement) of independent
public accountants with respect to the related Subservicer. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided such statement is delivered by the
Master Servicer to the Trustee.
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.
----------------------------------------------
The Master Servicer shall for so long as it acts as master
servicer under this Agreement, obtain and maintain in force (a) a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Master Servicer hereunder and (b) a fidelity bond in respect of
its officers, employees and agents. Each such policy or policies and bond shall,
together, comply with the requirements from time to time of FNMA or FHLMC for
persons performing servicing for mortgage loans purchased by FNMA or FHLMC. In
the event that any such policy or bond ceases to be in effect, the Master
Servicer shall obtain a comparable replacement policy or bond from an insurer or
issuer, meeting the requirements set forth above as of the date of such
replacement.
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<PAGE>
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances.
--------
The Master Servicer shall determine on or before each Master
Servicer Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make an
Advance, it shall, on or before the Master Servicer Advance Date, either (i)
deposit into the Certificate Account an amount equal to the Advance or (ii) make
an appropriate entry in its records relating to the Certificate Account that any
Amount Held for Future Distribution has been used by the Master Servicer in
discharge of its obligation to make any such Advance. Any funds so applied shall
be replaced by the Master Servicer by deposit in the Certificate Account no
later than the close of business on the next Master Servicer Advance Date. The
Master Servicer shall be entitled to be reimbursed from the Certificate Account
for all Advances of its own funds made pursuant to this Section as provided in
Section 3.08. The obligation to make Advances with respect to any Mortgage Loan
shall continue if such Mortgage Loan has been foreclosed or otherwise terminated
and the related Mortgaged Property has not been liquidated.
The Master Servicer shall deliver to the Trustee on the related
Master Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Advance determined by the Master Servicer
to be a Nonrecoverable Advance.
SECTION 4.02. Priorities of Distribution.
--------------------------
(a) On each Distribution Date, the Trustee shall withdraw the
Available Funds from the Distribution Account and apply such funds to
distributions on the Certificates in the following order and priority and, in
each case, to the extent of Available Funds remaining:
(i) [Reserved];
(ii) to each interest-bearing Class of Senior
Certificates, an amount allocable to
interest equal to the related Class Optimal
Interest Distribution Amount, any shortfall
being allocated among such Classes in
proportion to the amount of the Class
Optimal Interest Distribution Amount that
would have been distributed in the absence
of such shortfall;
(iii) [Reserved]
IV-1
<PAGE>
(iv) to each Class of Senior Certificates,
concurrently as follows:
(x) to the Class PO Certificates, an
amount allocable to principal equal to the PO Formula
Principal Amount, up to the outstanding Class
Certificate Balance of the Class PO Certificates; and
(y) on each Distribution Date prior to
the Senior Credit Support Depletion Date, the Non-PO
Formula Principal Amount, up to the amount of the
Senior Principal Distribution Amount for such
Distribution Date, will be distributed as follows:
(A) Reserved;
(B) concurrently,
(1) 10.4203790832% to the following
Classes in the following order of
priority:
(a) to the Class A-R and Class
A-7 Certificates,
sequentially, in that
order, until the Class
Certificate Balances
thereof have been reduced
to zero;
(b) to the Class A-3 and Class
A-8 Certificates, pro rata,
based on their respective
Class Certificate Balances,
until the aggregate Class
Certificate Balances
thereof have been reduced
to $24,475,638; and
(2) 89.5796209168% to the following
Classes in the following order of
priority:
(a) 65.7342661646% to the Class
A-1 Certificates and
34.2657338354% sequentially
to the Class A-5 and Class
A-6 Certificates, in that
order, until the respective
Class Certificate Balances
thereof have been reduced
to zero;
(b) to the Class A-2
Certificates, until the
Class Certificate Balance
thereof has been reduced to
zero;
(c) to the Class A-3 and Class
A-8 Certificates, pro rata,
based on their respective
Class Certificate
IV-2
<PAGE>
Balances, until the
respective Class
Certificate Balances
thereof have been reduced
to zero; and
(C) to the Class A-4 Certificates, until
the Class Certificate Balance thereof has
been reduced to zero.
(v) to the Class PO Certificates, any Class PO
Deferred Amount, up to an amount not to
exceed the amount calculated pursuant to
clause (A) of the definition of the
Subordinated Principal Distribution Amount
actually received or advanced for such
Distribution Date (with such amount to be
allocated first from amounts calculated
pursuant to (A)(i) and (ii) then (iii) of
the definition of Subordinated Principal
Distribution Amount);
(vi) to each Class of Subordinated Certificates,
subject to paragraph (e) below, in the
following order of priority:
(A) to the Class M Certificates, an
amount allocable to interest equal to the
Class Optimal Interest Distribution Amount
for such Distribution Date;
(B) to the Class M Certificates, an
amount allocable to principal equal to its
Pro Rata Share for such Distribution Date
until the Class Certificate Balance thereof
is reduced to zero;
(C) to the Class B-1 Certificates, an
amount allocable to interest equal to the
Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(D) to the Class B-1 Certificates, an
amount allocable to principal equal to its
Pro Rata Share for such Distribution Date
until the Class Certificate Balance thereof
is reduced to zero;
(E) to the Class B-2 Certificates, an
amount allocable to interest equal to the
Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(F) to the Class B-2 Certificates, an
amount allocable to principal equal to its
Pro Rata Share for such Distribution Date
until the Class Certificate Balance thereof
is reduced to zero;
(G) to the Class B-3 Certificates, an
amount allocable to interest equal to the
amount of the Class Optimal Interest
Distribution Amount for such Class for such
Distribution Date;
IV-3
<PAGE>
(H) to the Class B-3 Certificates, an
amount allocable to principal equal to its
Pro Rata Share for such Distribution Date
until the Class Certificate Balance thereof
has been reduced to zero;
(I) to the Class B-4 Certificates, an
amount allocable to interest equal to the
amount of the Class Optimal Interest
Distribution Amount for such Class for such
Distribution Date;
(J) to the Class B-4 Certificates, an
amount allocable to principal equal to its
Pro Rata Share for such Distribution Date
until the Class Certificate Balance thereof
has been reduced to zero;
(K) to the Class B-5 Certificates, an
amount allocable to interest equal to the
Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
and
(L) to the Class B-5 Certificates, an
amount allocable to principal equal to its
Pro Rata Share for such Distribution Date
until the Class Certificate Balance thereof
is reduced to zero.
(vii) to the Class A-R Certificates, any remaining
funds in the Trust Fund.
On any Distribution Date, amounts distributed in respect of Class PO Deferred
Amounts will not reduce the Class Certificate Balance of the Class PO
Certificates.
On any Distribution Date, to the extent the Amount Available
for Senior Principal is insufficient to make the full distribution required to
be made pursuant to clause (iv)(x) above, (A) the amount distributable on the
Class PO Certificates in respect of principal shall be equal to the product of
(1) the Amount Available for Senior Principal and (2) a fraction, the numerator
of which is the PO Formula Principal Amount and the denominator of which is the
sum of the PO Formula Principal Amount and the Senior Principal Distribution
Amount and (B) the amount distributable on the Senior Certificates, other than
the Class PO Certificates, in respect of principal shall be equal to the product
of (1) the Amount Available for Senior Principal and (2) a fraction, the
numerator of which is the Senior Principal Distribution Amount and the
denominator of which is the sum of the Senior Principal Distribution Amount and
the PO Formula Principal Amount.
(b) [Reserved]
(c) On each Distribution Date on or after the Senior Credit
Support Depletion Date, notwithstanding the allocation and priority set forth in
Section 4.02(a)(iv)(y),
IV-4
<PAGE>
the portion of Available Funds available to be distributed as principal of the
Senior Certificates (other than the Class PO Certificates) shall be distributed
concurrently, as principal, on such Classes, pro rata, on the basis of their
respective Class Certificate Balances, until the Class Certificate Balances
thereof are reduced to zero.
(d) On each Distribution Date, the amount referred to in clause
(i) of the definition of Class Optimal Interest Distribution Amount for each
Class of Certificates for such Distribution Date shall be reduced by (i) the
related Class' pro rata share of Net Prepayment Interest Shortfalls based on
such Class' Optimal Interest Distribution Amount for such Distribution Date
without taking into account such Net Prepayment Interest Shortfalls and (ii) the
related Class' Allocable Share of (A) after the Special Hazard Coverage
Termination Date, with respect to each Mortgage Loan that became a Special
Hazard Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the excess of one month's interest at the related Adjusted
Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of
the Due Date in such month over the amount of Liquidation Proceeds applied as
interest on such Mortgage Loan with respect to such month, (B) after the
Bankruptcy Coverage Termination Date, with respect to each Mortgage Loan that
became subject to a Bankruptcy Loss during the calendar month preceding the
month of such Distribution Date, the interest portion of the related Debt
Service Reduction or Deficient Valuation, (C) each Relief Act Reduction incurred
during the calendar month preceding the month of such Distribution Date and (D)
after the Fraud Coverage Termination Date, with respect to each Mortgage Loan
that became a Fraud Loan during the calendar month preceding the month of such
Distribution Date, the excess of one month's interest at the related Adjusted
Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of
the Due Date in such month over the amount of Liquidation Proceeds applied as
interest on such Mortgage Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in
Section 4.02(a)(vi), if with respect to any Class of Subordinated Certificates
on any Distribution Date the sum of the related Class Subordination Percentages
of such Class and of all Classes of Subordinated Certificates which have a
higher numerical Class designation than such Class (the "Applicable Credit
Support Percentage") is less than the Original Applicable Credit Support
Percentage for such Class, no distribution of Principal Prepayments will be made
to any such Classes (the "Restricted Classes") and the amount of such Principal
Prepayments otherwise distributable to the Restricted Classes shall be
distributed to any Classes of Subordinated Certificates having lower numerical
Class designations than such Class, pro rata, based on their respective Class
Certificate Balances immediately prior to such Distribution Date and shall be
distributed in the sequential order provided in Section 4.02(a)(vi).
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<PAGE>
SECTION 4.03. [Reserved]
----------
SECTION 4.04. Allocation of Realized Losses.
-----------------------------
(a) On or prior to each Determination Date, the Trustee shall
determine the total amount of Realized Losses, including Excess Losses, with
respect to the related Distribution Date. For purposes of allocating losses to
the Subordinated Certificates, the Class M Certificates will be deemed to have a
lower numerical class designation, and to be of a higher relative payment
priority, than each other Class of Subordinated Certificates.
Realized Losses with respect to any Distribution Date shall be
allocated as follows:
(i) the applicable PO Percentage of any Realized Loss,
including any Excess Loss, shall be allocated to the Class PO
Certificates until the Class Certificate Balance thereof is reduced to
zero; and
(ii) (1) the applicable Non-PO Percentage of any Realized Loss
(other than an Excess Loss) shall be allocated first to the
Subordinated Certificates in reverse order of their respective
numerical Class designations (beginning with the Class of Subordinated
Certificates then outstanding with the highest numerical Class
designation) until the respective Class Certificate Balance of each
such Class is reduced to zero, and second to the Senior Certificates
(other than the Notional Amount Certificates and the Class PO
Certificates), pro rata on the basis of their respective Class
Certificate Balances or, in the case of each Class of Accrual
Certificates, on the basis of the lesser of their Class Certificate
Balance and their initial Class Certificate Balance, in each case
immediately prior to the related Distribution Date until the respective
Class Certificate Balance of each such Class is been reduced to zero;
and
(2) the applicable Non-PO Percentage of any Excess Losses
shall be allocated to the Senior Certificates (other than the Notional
Amount Certificates and the Class PO Certificates) and the Subordinated
Certificates then outstanding, pro rata, on the basis of their
respective Class Certificate Balances or, in the case of each Class of
Accrual Certificates, on the basis of the lesser of their respective
Class Certificate Balances and their respective initial Class
Certificate Balances, in each case immediately prior to the related
Distribution Date.
(b) The Class Certificate Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class designation shall
be reduced on each Distribution Date by the sum of (i) the amount of any
payments on the Class PO Certificates in respect of Class PO Deferred Amounts
and (ii) the amount, if any, by which the aggregate of the Class Certificate
Balances of all outstanding Classes of Certificates (after giving effect to the
distribution of principal and the allocation of Realized Losses and Class PO
Deferred
IV-6
<PAGE>
Amounts on such Distribution Date) exceeds the Pool Stated Principal Balance for
the following Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or
any reduction in the Class Certificate Balance of a Class of Certificates
pursuant to Section 4.04(a) above shall be allocated among the Certificates of
such Class in proportion to their respective Certificate Balances.
(d) Any allocation of Realized Losses to a Certificate or to
any Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 4.04(a) above shall be accomplished by reducing the
Certificate Balance or Component Balance thereof, as applicable, immediately
following the distributions made on the related Distribution Date in accordance
with the definition of "Certificate Balance" or "Component Balance," as the case
may be.
SECTION 4.05. [Reserved].
----------
SECTION 4.06. Monthly Statements to Certificateholders.
----------------------------------------
(a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Certificateholder,
the Master Servicer and the Depositor a statement setting forth with respect to
the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Class
Unpaid Interest Shortfall included in such distribution and any
remaining Class Unpaid Interest Shortfall after giving effect to such
distribution;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable
to such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest;
(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of principal on
such Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the Senior Percentage and Subordinated Percentage for the
following Distribution Date;
IV-7
<PAGE>
(vii) the amount of the Master Servicing Fees paid to or
retained by the Master Servicer with respect to such Distribution Date;
(viii) the Pass-Through Rate for each such Class of
Certificates with respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on
such Distribution Date and the aggregate amount of Advances outstanding
as of the close of business on such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage
Loans (A) delinquent (exclusive of Mortgage Loans in foreclosure) (1) 1
to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days
and (B) in foreclosure and delinquent (1) 1 to 30 days (2) 31 to 60
days (3) 61 to 90 days and (4) 91 or more days, as of the close of
business on the last day of the calendar month preceding such
Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan as of the close of
business on the Determination Date preceding such Distribution Date and
the date of acquisition thereof;
(xii) the total number and principal balance of any REO
Properties (and market value, if available) as of the close of business
on the Determination Date preceding such Distribution Date;
(xiii) the Senior Prepayment Percentage for the following
Distribution Date;
(xiv) the aggregate amount of Realized Losses incurred during
the preceding calendar month;
(xv) the Special Hazard Loss Coverage Amount, the Fraud Loss
Coverage Amount and the Bankruptcy Loss Coverage Amount, in each case
as of the related Determination Date; and
(xvi) with respect to the second Distribution Date, the number
and aggregate balance of any Delay Delivery Mortgage Loans not
delivered within thirty days after the Closing Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information provided by the Master Servicer. The Trustee
will send a copy of each statement provided pursuant to this Section 4.06 to
each Rating Agency, by first class mail on the related Distribution Date.
IV-8
<PAGE>
(c) On or before the fifth Business Day following the end of
each Prepayment Period (but in no event later than the third Business Day prior
to the related Distribution Date), the Master Servicer shall deliver to the
Trustee (which delivery may be by electronic data transmission) a report in
substantially the form set forth as Schedule V hereto.
(d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.06 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
SECTION 4.07. Determination of Pass-Through Rates for COFI
-------------------------------------------------------
Certificates.
------------
The Pass-Through Rate for each Class of COFI Certificates for
each Interest Accrual Period after the initial Interest Accrual Period shall be
determined by the Trustee as provided below on the basis of the Index and the
applicable formulae appearing in footnotes corresponding to the COFI
Certificates in the table relating to the Certificates in the Preliminary
Statement.
Except as provided below, with respect to each Interest Accrual
Period following the initial Interest Accrual Period, the Trustee shall not
later than two Business Days following the publication of the applicable Index
determine the Pass-Through Rate at which interest shall accrue in respect of the
COFI Certificates during the related Interest Accrual Period.
Except as provided below, the Index to be used in determining
the respective Pass-Through Rates for the COFI Certificates for a particular
Interest Accrual Period shall be COFI for the second calendar month preceding
such Interest Accrual Period. If at the Outside Reference Date for any Interest
Accrual Period, COFI for the second calendar month preceding such Interest
Accrual Period has not been published, the Trustee shall use COFI for the third
calendar month preceding such Interest Accrual Period. If COFI for neither the
second nor third calendar months preceding any Interest Accrual Period has been
published on or before the related Outside Reference Date, the Index for such
Interest Accrual Period and for all subsequent Interest Accrual Periods shall be
the National Cost of Funds Index for the third calendar month preceding such
Interest Accrual Period (or the fourth preceding calendar month if such National
Cost of Funds Index for the third preceding calendar month has not been
published by such Outside Reference Date). In the event that the National Cost
of Funds Index for neither the third nor fourth calendar months preceding an
Interest Accrual Period has been published on or before the related Outside
Reference Date, then for such
IV-9
<PAGE>
Interest Accrual Period and for each succeeding Interest Accrual Period, the
Index shall be LIBOR, determined in the manner set forth below.
On each Interest Determination Date so long as the COFI
Certificates are outstanding and the applicable Index therefor is LIBOR, the
Trustee shall either (i) request each Reference Bank to inform the Trustee of
the quotation offered by its principal London office for making one-month United
States dollar deposits in leading banks in the London interbank market, as of
11:00 a.m. (London time) on such Interest Determination Date or (ii) in lieu of
making any such request, rely on such Reference Bank quotations that appear at
such time on the Reuters Screen LIBO Page (as defined in the International Swap
Dealers Association Inc. Code of Standard Wording, Assumptions and Provisions
for Swaps, 1986 Edition), to the extent available.
With respect to any Interest Accrual Period for which the
applicable Index is LIBOR, LIBOR for such Interest Accrual Period will be
established by the Trustee on the related Interest Determination Date as
follows:
(a) If on any Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the next Interest Accrual
Period shall be the arithmetic mean of such offered quotations (rounding such
arithmetic mean upwards if necessary to the nearest whole multiple of 1/32%).
(b) If on any Interest Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest Determination Date or (ii) the Reserve
Interest Rate. The "Reserve Interest Rate" shall be the rate per annum which the
Trustee determines to be either (i) the arithmetic mean (rounded upwards if
necessary to the nearest whole multiple of 1/32%) of the one-month United States
dollar lending rates that New York City banks selected by the Trustee are
quoting, on the relevant Interest Determination Date, to the principal London
offices of at least two of the Reference Banks to which such quotations are, in
the opinion of the Trustee, being so made, or (ii) in the event that the Trustee
can determine no such arithmetic mean, the lowest one-month United States dollar
lending rate which New York City banks selected by the Trustee are quoting on
such Interest Determination Date to leading European banks.
From such time as the applicable Index becomes LIBOR until all
of the COFI Certificates are paid in full, the Trustee will at all times retain
at least four Reference Banks for the purposes of determining LIBOR with respect
to each interest Determination Date. The Master Servicer initially shall
designate the Reference Banks. Each "Reference Bank" shall be a leading bank
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market, shall not control, be controlled by, or be under common control with,
the Trustee and shall have an established place of business in London. If any
such Reference Bank should be unwilling or unable to act as such or if the
Master Servicer should terminate its appointment as Reference Bank, the Trustee
shall promptly appoint or cause to be
IV-10
<PAGE>
appointed another Reference Bank. The Trustee shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable control.
In determining LIBOR and any Pass-Through Rate for the COFI
Certificates or any Reserve Interest Rate, the Trustee may conclusively rely and
shall be protected in relying upon the offered quotations (whether written, oral
or on the Reuters Screen) from the Reference Banks or the New York City banks as
to LIBOR or the Reserve Interest Rate, as appropriate, in effect from time to
time. The Trustee shall not have any liability or responsibility to any Person
for (i) the Trustee's selection of New York City banks for purposes of
determining any Reserve Interest Rate or (ii) its inability, following a
good-faith reasonable effort, to obtain such quotations from the Reference Banks
or the New York City banks or to determine such arithmetic mean, all as provided
for in this Section 4.07.
The establishment of LIBOR and each Pass-Through Rate for the
COFI Certificates by the Trustee shall (in the absence of manifest error) be
final, conclusive and binding upon each Holder of a Certificate and the Trustee.
SECTION 4.08. Determination of Pass-Through Rates for LIBOR
-------------------------------------------------------
Certificates.
------------
(A) On each Interest Determination Date so long as the LIBOR
Certificates are outstanding, the Trustee determine LIBOR on the basis of the
British Bankers' Association ("BBA") "Interest Settlement Rate" for one-month
deposits in U.S. dollars as found on Telerate page 3750 as of 11:00 a.m. London
time on each LIBOR Determination Date. Interest Settlement Rates currently are
based on rates quoted by sixteen BBA designated banks as being, in the view of
such banks, the offered rate at which deposits are being quoted to prime banks
in the London interbank market. Such Interest Settlement Rates are calculated by
eliminating the four highest rates and the four lowest rates, averaging the
eight remaining rates, carrying the result (expressed as a percentage) out to
six decimal places, and rounding to five decimal places. "Telerate Page 3750"
means the display page currently so designated on the Dow Jones Markets
(formerly Telerate Service) (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices.)
If on the initial LIBOR Determination Date, the Trustee is
required but unable to determine LIBOR in the manner provided in the described
above, LIBOR for the next Interest Accrual Period will be 5.65625%.
(B) If LIBOR cannot be determined as provided in paragraph (A)
of this Section 4.08, the Trustee shall either (i) request each Reference Bank
to inform the Trustee of the quotation offered by its principal London office
for making one-month United States dollar deposits in leading banks in the
London interbank market, as of 11:00 a.m. (London
IV-11
<PAGE>
time) on such Interest Determination Date or (ii) in lieu of making any such
request, rely on such Reference Bank quotations that appear at such time on the
Reuters Screen LIBO Page (as defined in the International Swap Dealers
Association Inc. Code of Standard Wording, Assumptions and Provisions for Swaps,
1986 Edition), to the extent available. LIBOR for the next Interest Accrual
Period will be established by the Trustee on each interest Determination Date as
follows:
(a) If on any interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the next
Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounding such arithmetic mean upwards if necessary to the
nearest whole multiple of 1/32%).
(b) If on any Interest Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the
next Interest Accrual Period shall be whichever is the higher of (i)
LIBOR as determined on the previous Interest Determination Date or (ii)
the Reserve Interest Rate. The "Reserve Interest Rate" shall be the
rate per annum which the Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/32%) of the one-month United States dollar lending rates
that New York City banks selected by the Trustee are quoting, on the
relevant Interest Determination Date, to the principal London offices
of at least two of the Reference Banks to which such quotations are, in
the opinion of the Trustee, being so made, or (ii) in the event that
the Trustee can determine no such arithmetic mean, the lowest one-month
United States dollar lending rate which New York City banks selected by
the Trustee are quoting on such Interest Determination Date to leading
European banks.
(c) If on any interest Determination Date the trustee is
required but is unable to determine the Reserve Interest Rate in the
manner provided in paragraph (b) above, LIBOR shall be LIBOR as
determined on the preceding Interest Determination Date, or, in the
case of the first Interest Determination Date, 5.65625%.
Until all of the LIBOR Certificates are paid in full, the
Trustee will at all times retain at least four Reference Banks for the purpose
of determining LIBOR with respect to each Interest Determination Date. The
Master Servicer initially shall designate the Reference Banks. Each "Reference
Bank" shall be a leading bank engaged in transactions in Eurodollar deposits in
the international Eurocurrency market, shall not control, be controlled by, or
be under common control with, the Trustee and shall have an established place of
business in London. If any such Reference Bank should be unwilling or unable to
act as such or if the Master Servicer should terminate its appointment as
Reference Bank, the Trustee shall promptly appoint or cause to be appointed
another Reference Bank. The Trustee shall have no liability or responsibility to
any Person for (i) the selection of any Reference Bank for purposes of
determining LIBOR or (ii) any inability to retain at least four Reference Banks
which is caused by circumstances beyond its reasonable control.
IV-12
<PAGE>
(C) The Pass-Through Rate for each Class of LIBOR Certificates
for each Interest Accrual Period shall be determined by the Trustee on each
Interest Determination Date so long as the LIBOR Certificates are outstanding on
the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement.
In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates, any Interest Settlement Rate, or any Reserve Interest Rate, the
Trustee may conclusively rely and shall be protected in relying upon the offered
quotations (whether written, oral or on the Dow Jones Markets) from the BBA
designated banks, the Reference Banks or the New York City banks as to LIBOR,
the Interest Settlement Rate or the Reserve Interest Rate, as appropriate, in
effect from time to time. The Trustee shall not have any liability or
responsibility to any Person for (i) the Trustee's selection of New York City
banks for purposes of determining any Reserve Interest Rate or (ii) its
inability, following a good-faith reasonable effort, to obtain such quotations
from, the BBA designated banks, the Reference Banks or the New York City banks
or to determine such arithmetic mean, all as provided for in this Section 4.0.8.
The establishment of LIBOR and each Pass-Through Rate for the
LIBOR Certificates by the Trustee shall (in the absence of manifest error) be
final, conclusive and binding upon each Holder of a Certificate and the Trustee.
IV-13
<PAGE>
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
----------------
The Certificates shall be substantially in the forms attached
hereto as exhibits. The Certificates shall be issuable in registered form, in
the minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 9.02 hereof respecting the final
distribution on the Certificates, on each Distribution Date the Trustee shall
make distributions to each Certificateholder of record on the preceding Record
Date either (x) by wire transfer in immediately available funds to the account
of such holder at a bank or other entity having appropriate facilities therefor,
if (i) such Holder has so notified the Trustee at least five Business Days prior
to the related Record Date and (ii) such Holder shall hold (A) a Notional Amount
Certificate, (B) 100% of the Class Certificate Balance of any Class of
Certificates or (C) Certificates of any Class with aggregate principal
Denominations of not less than $1,000,000 or (y) by check mailed by first class
mail to such Certificateholder at the address of such holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the countersignature and delivery of
such Certificates or did not hold such offices at the date of such Certificate.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless countersigned by the Trustee by manual signature,
and such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
SECTION 5.02. Certificate Register; Registration of Transfer and
--------------------------------------------------
Exchange of Certificates.
------------------------
(a) Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06 hereof, a Certificate Register
for the Trust Fund in which,
V-1
<PAGE>
subject to the provisions of subsections (b) and (c) below and to such
reasonable regulations as it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. Upon surrender for registration of transfer of any Certificate,
the Trustee shall execute and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Class and aggregate
Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer and
such Certificateholder's prospective transferee shall each certify to the
Trustee in writing the facts surrounding the transfer in substantially the forms
set forth in Exhibit J (the "Transferor Certificate") and (i) deliver a letter
in substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Trustee at the expense of the transferor an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Master Servicer shall cooperate with the Depositor in
providing the Rule 144A
V-2
<PAGE>
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor, the Seller and the Master Servicer
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.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit K
or Exhibit L), to the effect that such transferee is not an employee benefit
plan or arrangement subject to Section 406 of ERISA or a plan or arrangement
subject to Section 4975 of the Code, nor a person acting on behalf of any such
plan or arrangement, nor using the assets of any such plan or arrangement to
effect such transfer, (ii) if the purchaser is an insurance company, a
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60 or (iii) in the case of any such
ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement, or using such plan's or arrangement's assets,
an Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel
shall not be an expense of either the Trustee or the Trust Fund, addressed to
the Trustee to the effect that the purchase or holding of such ERISA-Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee to any obligation in addition to those
expressly undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is not
a Private Certificate, in the event the representation letter referred to in the
preceding sentence is not so furnished, such representation shall be deemed to
have been made to the Trustee by the transferee's (including an initial
acquiror's) acceptance of the ERISA-Restricted Certificates. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan subject
to ERISA or to the Code without the delivery to the Trustee of an Opinion of
Counsel satisfactory to the Trustee as described above shall be void and of no
effect.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA-Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or
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for making any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement so long as the transfer was registered by the Trustee in accordance
with the foregoing requirements.
(c) Each person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I.
(iii) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Residual Certificate and (C) not to Transfer its Ownership Interest
in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Residual Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit, Transferor Certificate and either the
Rule 144A Letter or the Investment Letter. The Trustee shall be
entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact
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not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Residual Certificate is
not transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Residual
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided 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 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 Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(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, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished
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<PAGE>
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 Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Depositor is unable to locate a qualified successor, (y) the Depositor at its
option advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (z) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate Balance
of the Book-Entry Certificates together advise the Trustee and the Depository
through the Depository Participants in writing that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Master Servicer, the Depositor nor the Trustee shall
be liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in relying on, such instructions.
The Master Servicer shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
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 shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Trustee,
or the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Master Servicer and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In
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connection with the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 5.04. Persons Deemed Owners.
---------------------
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses.
---------
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of such Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
SECTION 5.06. Maintenance of Office or Agency.
-------------------------------
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Master
-------------------------------------------------------
Servicer.
--------
The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Master
-------------------------------------------------------
Servicer.
--------
The Depositor and the Master Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the laws of
the United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may
be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the Seller,
-------------------------------------------------------
the Master Servicer and Others.
------------------------------
None of the Depositor, the Seller, the Master Servicer or any
of the directors, officers, employees or agents of the Depositor, the Seller or
the Master Servicer shall be under any liability to the Certificateholders for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Seller, the Master Servicer
or any such Person against any breach of representations or warranties made by
it herein or protect the Depositor, the Seller, the Master Servicer or any such
Person from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Seller, the Master Servicer and any
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director, officer, employee or agent of the Depositor, the Seller or the Master
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, the Seller, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Seller or the Master Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense related to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Seller or the Master Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that any of the
Depositor, the Seller or the Master Servicer may in its discretion undertake any
such action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee and
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Seller and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account.
SECTION 6.04. Limitation on Resignation of Master Servicer.
--------------------------------------------
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) upon appointment of a successor servicer
and receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrading of the rating of
any of the Certificates, without regard to the guaranty provided by the
Policies, or (b) upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination under clause (b)
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor master servicer shall
have assumed the Master Servicer's responsibilities, duties, liabilities and
obligations hereunder.
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<PAGE>
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or remit to the Trustee any payment required to be
made under the terms of this Agreement, which failure shall continue
unremedied for five days after the date upon which written notice of
such failure shall have been given to the Master Servicer by the
Trustee or the Depositor or to the Master Servicer and the Trustee by
the Holders of Certificates having not less than 25% of the Voting
Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement, which failure
materially affects the rights of Certificateholders, that failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to the Master
Servicer by the Trustee or the Depositor, or to the Master Servicer and
the Trustee by the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates; provided, however,
that the sixty-day cure period shall not apply to the initial delivery
of the Mortgage File for Delay Delivery Mortgage Loans nor the failure
to substitute or repurchase in lieu thereof; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an
VII-1
<PAGE>
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations.
If an Event of Default described in clauses (i) to (v) of this
Section shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 66 2/3% of the
Voting Rights evidenced by the Certificates, the Trustee shall by notice in
writing to the Master Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof, other than its rights
as a Certificateholder hereunder. On and after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. The Trustee shall make any Advance which the
Master Servicer failed to make subject to Section 3.04, whether or not the
obligations of the Master Servicer have been terminated pursuant to this
Section. The Trustee is hereby authorized and empowered to execute and deliver,
on behalf of the Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer to pay amounts owed pursuant to Article VIII. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Certificate Account, or thereafter be received with
respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a Scheduled Payment on a Mortgage Loan which was due prior to
the notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii),and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, subject to and
to the extent provided in Section 3.04, be the successor 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 and applicable law including the obligation to make
Advances pursuant to Section 4.01. As compensation therefor, the Trustee shall
be entitled
VII-2
<PAGE>
to all funds relating to the Mortgage Loans that the Master Servicer would have
been entitled to charge to the Certificate Account or Distribution Account if
the Master Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Trustee has become the successor to the Master Servicer in
accordance with Section 7.01 hereof, the Trustee may, if it shall be unwilling
to so act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 hereof or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Any successor to the Master Servicer shall be an institution which is a FNMA and
FHLMC approved seller/servicer in good standing, which has a net worth of at
least $15,000,000, and which is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, which contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Master Servicer (other than liabilities of the Master Servicer under Section
6.03 hereof incurred prior to termination of the Master Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges in writing that its rating
of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, without regard to the guaranty
provided by the Policies, as a result of such assignment and delegation. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
-------- -------
excess of the Master Servicing Fee permitted the Master Servicer hereunder. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor master servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as master servicer shall
give notice to the Mortgagors of such change of servicer and shall, during the
term of its service as master servicer maintain in force the policy or policies
that the Master Servicer is required to maintain pursuant to Section 6.05.
VII-3
<PAGE>
SECTION 7.03. Notification to Certificateholders.
----------------------------------
(a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders and each
Rating Agency notice of each such Event of Default hereunder known to the
Trustee, unless such Event of Default shall have been cured or waived.
VII-4
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
-----------------
The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
-------- -------
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
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) unless an Event of Default known to the Trustee shall have
occurred and be continuing, 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 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 which it believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be finally proven that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing not
less than 25% of the Voting Rights of Certificates relating to the
time, method and place of conducting any proceeding for any remedy
VIII-1
<PAGE>
available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party
or parties;
(ii) the Trustee may consult with counsel, financial advisers
or accountants and the advice of any such counsel, financial advisers
or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(iv) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing so to do by Holders of Certificates evidencing not less than
25% of the Voting Rights allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend its
own funds or otherwise incur any financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers
hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of
the investment security);
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(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any
of the trusts, 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, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which may be incurred therein or
thereby.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
-----------------------------------------------------
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor or the Seller, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and counter-signature of the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor or
the Master Servicer of any funds paid to the Depositor or the Master Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from the Certificate
Account by the Depositor or the Master Servicer.
SECTION 8.04. Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
---------------------------
The Trustee, as compensation for its activities hereunder,
shall be entitled to withdraw from the Distribution Account on each Distribution
Date an amount equal to the Trustee Fee for such Distribution Date. The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(including reasonable attorney's fees) (i) incurred in connection with any claim
or legal action relating to (a) this Agreement, (b) the Certificates or (c) in
connection with the performance of any of the Trustee's duties hereunder, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of any of the Trustee's duties
hereunder or incurred by reason of any action of the Trustee taken at the
direction of the Certificateholders and (ii) resulting from any error in any tax
or information return prepared by the Master Servicer. Such indemnity shall
survive the termination of this Agreement or the resignation or removal of the
Trustee hereunder. Without limiting the foregoing, the Master Servicer covenants
and agrees, except
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as otherwise agreed upon in writing by the Depositor and the Trustee, and except
for any such expense, disbursement or advance as may arise from the Trustee's
negligence, bad faith or willful misconduct, to pay or reimburse the Trustee,
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement with respect
to: (A) the reasonable compensation and the expenses and disbursements of its
counsel not associated with the closing of the issuance of the Certificates, (B)
the reasonable compensation, expenses and disbursements of any accountant,
engineer or appraiser that is not regularly employed by the Trustee, to the
extent that the Trustee must engage such persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with preparing
any Definitive Certificates. Except as otherwise provided herein, the Trustee
shall not be entitled to payment or reimbursement for any routine ongoing
expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Registrar, Tax Matters Person or Paying Agent hereunder or for any
other expenses.
SECTION 8.06. Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to super-vision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction). If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.06 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07 hereof.
The entity serving as Trustee may have normal banking and trust relationships
with the Depositor and its affiliates or the Master Servicer and its affiliates;
provided, however, that such entity cannot be an affiliate of the Master
Servicer other than the Trustee in its role as successor to the Master Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
----------------------------------
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor
and the Master Servicer and each Rating Agency not less than 60 days before the
date specified in such notice when, subject to Section 8.08, such resignation is
to take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
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accepted appointment within 30 days after the giving of such notice or
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 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Master Servicer
may remove the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Master Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor Trustee to the Master Servicer, one complete
set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
-----------------
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor and to its
predecessor trustee and the Master Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. 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 more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the
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provisions of Section 8.06 hereof and its appointment shall not adversely affect
the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
----------------------------------
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Master Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of
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the Master Servicer, shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such
act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such
separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Master Servicer, and not the Trustee, shall be liable
for the payment of reasonable compensation, reimbursement and
indemnification to any such 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 separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument appointing
any separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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SECTION 8.11. Tax Matters.
-----------
It is intended that the assets with respect to which any REMIC
election is to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to such assets shall be
such as to qualify such assets as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. In furtherance of
such intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of any such REMIC and
that in such capacity it shall: (a) prepare and file, or cause to be prepared
and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
Income Tax Return (Form 1066 or any successor form adopted by the Internal
Revenue Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to any such REMIC,
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make or cause to be made elections that such assets be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law); (d) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns and reports as and
when required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) provide information necessary for the
computation of tax imposed on the transfer of a Residual Certificate to a Person
that is not a Permitted Transferee, or an agent (including a broker, nominee or
other middleman) of a Non-Permitted Transferee, or a pass-through entity in
which a Non-Permitted Transferee is the record holder of an interest (the
reasonable cost of computing and furnishing such information may be charged to
the Person liable for such tax); (f) to the extent that they are under its
control conduct matters relating to such assets at all times that any
Certificates are outstanding so as to maintain the status as a REMIC under the
REMIC Provisions; (g) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status; (h) pay,
from the sources specified in the last paragraph of this Section 8.11, the
amount of any federal or state tax, including prohibited transaction taxes as
described below, imposed on any such REMIC prior to its termination when and as
the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) ensure that federal, state or local income tax or information
returns shall be signed by the
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Trustee or such other person as may be required to sign such returns by the Code
or state or local laws, regulations or rules; (j) maintain records relating to
any such REMIC, including but not limited to the income, expenses, assets and
liabilities thereof and the fair market value and adjusted basis of the assets
determined at such intervals as may be required by the Code, as may be necessary
to prepare the foregoing returns, schedules, statements or information; and (k)
as and when necessary and appropriate, represent any such REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any such REMIC, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any such REMIC, and otherwise act on behalf of any such REMIC in
relation to any tax matter or controversy involving it.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited
transactions" of the REMIC as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of the REMIC as defined in Section
860G(c) of the Code, on any contribution to the REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any minimum tax imposed upon the REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trustee, if any
such other tax arises out of or results from a breach by the Trustee of any of
its obligations under this Agreement, (ii) the Master Servicer, in the case of
any such minimum tax, or if such tax arises out of or results from a breach by
the Master Servicer or Seller of any of their obligations under this Agreement,
(iii) the Seller, if any such tax arises out of or results from the Seller's
obligation to repurchase a Mortgage Loan pursuant to Section 2.02 or 2.03 or
(iv) in all other cases, or in the event that the Trustee, the Master Servicer
or the Seller fails to honor its obligations under the preceding clauses
(i),(ii) or (iii), any such tax will be paid with amounts otherwise to be
distributed to the Certificateholders, as provided in Section 3.08(b).
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<PAGE>
SECTION 8.12. Periodic Filings.
----------------
Pursuant to written instructions from the Depositor, the
Trustee shall prepare, execute and file all periodic reports required under the
Securities Exchange Act of 1934 in conformity with the terms of the relief
granted to the Depositor in CWABS, Inc. (February 3, 1994), a copy of which has
been supplied to the Trustee by the Issuer. In connection with the preparation
and filing of such periodic reports, the Depositor and the Master Servicer shall
timely provide to the Trustee all material information available to them which
is required to be included in such reports and not known to them to be in the
possession of the Trustee and such other information as the Trustee reasonably
may request from either of them and otherwise reasonably shall cooperate with
the Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all
-----------------------------------------------
Mortgage Loans.
--------------
Subject to Section 9.03, the obligations and responsibilities
of the Depositor, the Master Servicer and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by the Master Servicer of all Mortgage Loans (and REO Properties) remaining in
the Trust Fund at the price equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan plus one month's accrued interest thereon at the
applicable Adjusted Mortgage Rate and (ii) the lesser of (x) the appraised value
of any REO Property as determined by the higher of two appraisals completed by
two independent appraisers selected by the Master Servicer at the expense of the
Master Servicer and (y) the Stated Principal Balance of each Mortgage Loan
related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Adjusted Mortgage Rate and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the earlier of (i) the expiration of 21
years from the death of the 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 and (ii) the Latest Possible Maturity Date. The right to
purchase all Mortgage Loans and REO Properties pursuant to clause (a) above
shall be conditioned upon the Pool Stated Principal Balance, at the time of any
such repurchase, aggregating less than ten percent of the aggregate Cut-off Date
Principal Balance of the Mortgage Loans.
SECTION 9.02. Final Distribution on the Certificates.
--------------------------------------
If on any Determination Date, the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Master Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date
notice is to be mailed to the affected Certificateholders, the Master Servicer
shall notify the Depositor and the Trustee of the date the Master Servicer
intends to terminate the Trust Fund and of the applicable repurchase price of
the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 15th
day and no later than the 10th day of the
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month next preceding the month of such final distribution. Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made, and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Master
Servicer will give such notice to each Rating Agency at the time such notice is
given to Certificateholders.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Certificateholders of each Class,
in the order set forth in Section 4.02 hereof, on the final Distribution Date,
in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates, the Certificate Balance thereof plus (a) accrued interest
thereon (or on their Notional Amount, if applicable) in the case of an interest
bearing Certificate and (b) any Class PO Deferred Amounts in the case of the
Class PO Certificates, and (ii) as to the Residual Certificates, the amount, if
any, which remains on deposit in the Distribution Account (other than the
amounts retained to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class A-R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
SECTION 9.03. Additional Termination Requirements.
-----------------------------------
(a) the event the Master Servicer exercises its purchase option
as provided in Section 9.01, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been supplied
with an Opinion of Counsel, at the expense of the Master Servicer, to the effect
that the failure to comply with the requirements of this Section 9.03 will not
(i) result in the imposition of taxes on "prohibited transactions" on any REMIC
as defined in section 860F of the Code, or (ii) cause any REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
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(1) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Master Servicer under Section 9.02,
the Master Servicer shall prepare and the Trustee, at the expense of
the "tax matters person," shall adopt a plan of complete liquidation
within the meaning of section 860F(a)(4) of the Code which, as
evidenced by an Opinion of Counsel (which opinion shall not be an
expense of the Trustee or the Tax Matters Person), meets the
requirements of a qualified liquidation; and
(2) Within 90 days after the time of adoption of such a plan
of complete liquidation, the Trustee shall sell all of the assets of
the Trust Fund to the Master Servicer for cash in accordance with
Section 9.01.
(b) The Trustee as agent for any REMIC hereby agrees to adopt
and sign such a plan of complete liquidation upon the written request of the
Master Servicer, and the receipt of the Opinion of Counsel referred to in
Section 9.03(a)(1) and to take such other action in connection therewith as may
be reasonably requested by the Master Servicer.
(c) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to prepare and the Trustee to adopt
and sign a plan of complete liquidation.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
---------
This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Seller or the Master Servicer, (iv) to add any other provisions
with respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund), adversely affect in any
material respect the interests of any Certificateholder; provided, however, that
the amendment shall not be deemed to adversely affect in any material respect
the interests of the Certificateholders 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 Certificates; it being understood and agreed that any such letter in and
of itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor and the Master Servicer
also may at any time and from time to time amend this Agreement without the
consent of the Certificateholders to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or helpful to (i) maintain the
qualification of any REMIC as a REMIC under the Code, (ii) avoid or minimize the
risk of the imposition of any tax on any REMIC pursuant to the Code that would
be a claim at any time prior to the final redemption of the Certificates or
(iii) comply with any other requirements of the Code, provided that the Trustee
has been provided an Opinion of Counsel, which opinion shall be an expense of
the party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of a Majority in Interest of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of
X-1
<PAGE>
the Holders of Certificates of such Class evidencing, as to such Class,
Percentage Interests aggregating 66% or (iii) reduce the aforesaid percentages
of Certificates the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or cause
any REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
SECTION 10.02. Recordation of Agreement; Counterparts.
--------------------------------------
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense, but only
upon direction by the Trustee accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially 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
X-2
<PAGE>
number of counterparts, each of which counterparts shall be deemed to be an
original, and such counterparts shall constitute but one and the same
instrument.
SECTION 10.03. Governing Law.
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Intention of Parties.
--------------------
It is the express intent of the parties hereto that the
conveyance of the Trust Fund by the Depositor to the Trustee be, and be
construed as, an absolute sale thereof to the Trustee. It is, further, not the
intention of the parties that such conveyance be deemed a pledge thereof by the
Depositor to the Trustee. However, in the event that, notwithstanding the intent
of the parties, such assets are held to be the property of the Depositor, or if
for any other reason this Agreement is held or deemed to create a security
interest in such assets, then (i) this Agreement shall be deemed to be a
security agreement within the meaning of the Uniform Commercial Code of the
State of New York and (ii) the conveyance provided for in this Agreement shall
be deemed to be an assignment and a grant by the Depositor to the Trustee, for
the benefit of the Certificateholders, of a security interest in all of the
assets that constitute the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholder.
SECTION 10.05. Notices.
-------
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been
cured;
X-3
<PAGE>
3. The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.04;
2. Each annual statement as to compliance described in Section
3.16;
3. Each annual independent public accountants' servicing report
described in Section 3.17; and
4. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor, CWABS, Inc., 4500 Park Granada, Calabasas, California
91302, Attention: David A. Spector, (b) in the case of the Master Servicer,
Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas, California 91302,
Attention: Kevin W. Bartlett or such other address as may be hereafter furnished
to the Depositor and the Trustee by the Master Servicer in writing, (c) in the
case of the Trustee, The Bank of New York, 101 Barclay Street, 12E, New York,
New York 10286, Attention: Mortgage-Backed Securities Group Series 1998-13, or
such other address as the Trustee may hereafter furnish to the Depositor or
Master Servicer and (d) in the case of the Rating Agencies, the address
specified therefor in the definition corresponding to the name of such Rating
Agency. Notices to Certificateholders shall be deemed given when mailed, first
class postage prepaid, to their respective addresses appearing in the
Certificate Register.
SECTION 10.06. Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
X-4
<PAGE>
SECTION 10.07. Assignment.
----------
Notwithstanding anything to the contrary contained herein,
except as provided in Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
------------------------------------------
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
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<PAGE>
SECTION 10.09. Inspection and Audit Rights.
---------------------------
The Master Servicer agrees that, on reasonable prior notice, it
will permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Master Servicer's normal business hours, to
examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes said accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor or the Trustee of any right under this Section 10.09
shall be borne by the party requesting such inspection; all other such expenses
shall be borne by the Master Servicer or the related Subservicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
-----------------------------------------
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
* * * * * *
X-6
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and
the Master Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
CWABS, INC.,
as Depositor
By: /s/ Nicholas Krsnich
______________________________
Name: Nicholas Krsnich
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Kelly Sheahan
______________________________
Name: Kelly Sheahan
Title: Assistant Treasurer
COUNTRYWIDE HOME LOANS, INC.,
as Seller and Master Servicer
By: /s/ Susan E. Bow
______________________________
Name: Susan E. Bow
Title: Senior Vice President,
Assistant General Counsel
and Assistant Secretary
X-7
<PAGE>
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
S-I-1
<PAGE>
SCHEDULE II
CWABS, Inc.
Mortgage Pass-Through Certificates
Series 1998-13
Representations and Warranties of the Seller/Master Servicer
------------------------------------------------------------
Countrywide Home Loans, Inc. ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule
II shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among Countrywide, as seller and master servicer,
CWABS, Inc., as depositor, and The Bank of New York, as trustee.
(1) Countrywide is duly organized as a New York corporation
and is validly existing and in good standing under the laws of the
State of New York and is duly authorized and qualified to transact any
and all business contemplated by the Pooling and Servicing Agreement to
be conducted by Countrywide in any state in which a Mortgaged Property
is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of the Pooling and Servicing Agreement and to
perform any of its other obligations under the Pooling and Servicing
Agreement in accordance with the terms thereof.
(2) Countrywide has the full corporate power and authority to
sell and service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by the Pooling and Servicing Agreement and has duly authorized by all
necessary corporate action on the part of Countrywide the execution,
delivery and performance of the Pooling and Servicing Agreement; and
the Pooling and Servicing Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto,
constitutes a legal, valid and binding obligation of Countrywide,
enforceable against Countrywide in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Countrywide, the sale and servicing of the Mortgage Loans
by Countrywide under the Pooling and Servicing Agreement, the
consummation of any other of the transactions contemplated by the
Pooling and Servicing Agreement, and the fulfillment of or
S-II-1
<PAGE>
compliance with the terms thereof are in the ordinary course of
business of Countrywide and will not (A) result in a material breach of
any term or provision of the charter or by-laws of Countrywide or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Countrywide is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to Countrywide
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over Countrywide; and Countrywide is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair Countrywide's ability to perform or meet any of
its obligations under the Pooling and Servicing Agreement.
(4) Countrywide is an approved servicer of conventional
mortgage loans for FNMA or FHLMC and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(5) No litigation is pending or, to the best of Countrywide's
knowledge, threatened, against Countrywide that would materially and
adversely affect the execution, delivery or enforceability of the
Pooling and Servicing Agreement or the ability of Countrywide to sell
or service the Mortgage Loans or to perform any of its other
obligations under the Pooling and Servicing Agreement in accordance
with the terms thereof.
(6) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Countrywide of, or compliance by Countrywide with,
the Pooling and Servicing Agreement or the consummation of the
transactions contemplated thereby, or if any such consent, approval,
authorization or order is required, Countrywide has obtained the same.
(7) Countrywide intends to treat the transfer of the Mortgage
Loans to the Depositor as a sale of the Mortgage Loans for all tax,
accounting and regulatory purposes.
S-II-2
<PAGE>
SCHEDULE III
CWABS, Inc.
Mortgage Pass-Through Certificates
Series 1998-13
Representations and Warranties as to the Mortgage Loans
-------------------------------------------------------
Countrywide Home Loans, Inc. ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule III to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule
III shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among Countrywide, as seller and master servicer,
CWABS, Inc., as depositor, and The Bank of New York, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to each Mortgage Loan is true and
correct in all material respects as of the Closing Date.
(2) As of the Closing Date, all payments due with respect to
each Mortgage Loan prior to the Cut-off Date have been made; and as of
the Cut-off Date, no Mortgage Loan has been contractually delinquent
for 30 or more days during the twelve months prior to the Cut-off Date.
(3) No Mortgage Loan had a Loan-to-Value Ratio at origination
in excess of 97%.
(4) Each Mortgage is a valid and enforceable first lien on the
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Mortgage Loan, and (c) 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.
(5) Immediately prior to the assignment of the Mortgage Loans
to the Depositor, the Seller had good title to, and was the sole owner
of, each Mortgage Loan free and clear of any pledge, lien, encumbrance
or security interest and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to
sell and assign the same pursuant to the Pooling and Servicing
Agreement.
S-III-1
<PAGE>
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal of or interest on such Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged
Property is free of material damage and in good repair.
(10) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby will not involve
the violation of any such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material
respect (except that a Mortgage Loan may have been modified by a
written instrument which has been recorded or submitted for
recordation, if necessary, to protect the interests of the
Certificateholders and the original or a copy of which has been
delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property
in whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification or satisfaction with
respect thereto.
(12) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and
effect, and each such policy was issued by a title insurer qualified to
do business in the jurisdiction where the Mortgaged Property is located
and acceptable to FNMA or FHLMC and is in a form acceptable to FNMA or
FHLMC, which policy insures the Seller and successor owners of
indebtedness secured by the insured Mortgage, as to the first priority
lien of the Mortgage subject to the exceptions set forth in paragraph
(4) above; to the best of the Seller's knowledge, no claims have been
made under such mortgage title insurance policy and no prior holder of
the related Mortgage,
S-III-2
<PAGE>
including the Seller, has done, by act or omission, anything which
would impair the coverage of such mortgage title insurance policy.
(13) Each Mortgage Loan was originated (within the meaning of
Section 3(a)(41) of the Securities Exchange Act of 1934, as amended) by
an entity that satisfied at the time of origination the requirements of
Section 3(a)(41) of the Securities Exchange Act of 1934, as amended.
(14) To the best of the Seller's knowledge, all of the
improvements which were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(15) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
(16) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and under applicable
law. To the best of the Seller's knowledge, all parties to the Mortgage
Note and the Mortgage had legal capacity to execute the Mortgage Note
and the Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties.
(17) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making, or
closing or recording the Mortgage Loans were paid.
(18) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
S-III-3
<PAGE>
(19) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by
the Certificateholders to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially
one of the forms acceptable to FNMA or FHLMC, with such riders as have
been acceptable to FNMA or FHLMC, as the case may be.
(21) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the related Mortgage Note.
(22) The origination, underwriting and collection practices
used by the Seller with respect to each Mortgage Loan have been in all
respects legal, prudent and customary in the mortgage lending and
servicing business.
(23) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations.
(24) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(25) Each Mortgage Loan contains a customary "due on sale"
clause.
(26) None of the Mortgage Loans provides for a prepayment
penalty.
(27) Each Mortgage Loan which had a Loan-to-Value Ratio at
origination in excess of 80% is the subject of a Primary Insurance
Policy that insures that portion of the principal balance equal to a
specified percentage times the sum of the remaining principal balance
of the related Mortgage Loan, the accrued interest thereon and the
related foreclosure expenses. The specified percentage is either 12%
for Loan-to-Value Ratios between 80.01%, 85.00%, 25% for Loan-to-Value
Ratios between 85.01% and 90.00%, 30% for Loan-to-Value Ratios between
90.01% and 95.00% or 35% for Loan-to-Value Ratios between 95.01% and
97.00%. Each such Primary Insurance Policy is issued by a Qualified
Insurer. All provisions of any such Primary Insurance Policy have been
and are being complied with, any such policy is in full force and
effect, and all premiums due thereunder have been paid. Any Mortgage
subject to any such Primary Insurance Policy obligates either the
Mortgagor or the mortgagee thereunder to maintain such insurance and to
pay all premiums and charges in connection therewith, subject, in each
case, to the provisions of Section 3.09(c) of
S-III-4
<PAGE>
the Pooling and Servicing Agreement. The Mortgage Rate for each
Mortgage Loan is net of any such insurance premium.
(28) At the Cut-off Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where the Mortgaged Property is located in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent
the Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium unit. All
such individual insurance policies and all flood policies referred to
in item (29) below contain a standard mortgagee clause naming the
Seller or the original mortgagee, and its successors in interest, as
mortgagee, and the Seller has received no notice that any premiums due
and payable thereon have not been paid; the Mortgage obligates the
Mortgagor thereunder to maintain all such insurance including flood
insurance at the Mortgagor's cost and expense, and upon the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(29) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the original outstanding principal
balance of the Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis, or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973, as amended.
(30) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the total or partial
condemnation of the Mortgaged Property.
(31) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material event which, with the passage of time
or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and the Seller has not
waived any default, breach, violation or event of acceleration.
S-III-5
<PAGE>
(32) Each Mortgaged Property is improved by a one- to
four-family residential dwelling including condominium units and
dwelling units in PUDs, which, to the best of Seller's knowledge, does
not include cooperatives or mobile homes and does not constitute other
than real property under state law.
(33) Each Mortgage Loan is being serviced by the Master
Servicer.
(34) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
Mortgage Loan Schedule. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan. The Mortgage
Note does not permit or obligate the Master Servicer to make future
advances to the Mortgagor at the option of the Mortgagor.
(35) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed, but is not
yet due and payable. Except for (A) payments in the nature of escrow
payments, and (B) interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage proceeds, whichever is later,
to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Master Servicer has not advanced
funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required by the Mortgage.
(36) Each Mortgage Loan was underwritten in all material
respects in accordance with the Seller's underwriting guidelines as set
forth in the Prospectus Supplement.
(37) Other than with respect to any Streamlined Documentation
Mortgage Loan as to which the loan-to-value ratio of the related
Original Mortgage Loan was less than 75% (or 70% with respect to
Mortgage Loans secured by Mortgaged Properties located in California)
at the time of the origination of such Original Mortgage Loan, prior to
the approval of the Mortgage Loan application, an appraisal of the
related Mortgaged Property was obtained from a qualified appraiser,
duly appointed by the originator, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
S-III-6
<PAGE>
(38) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and not more than two
of the Mortgage Loans are subject to a buydown or similar arrangement.
(39) Any leasehold estate securing a Mortgage Loan has a term
of not less than five years in excess of the term of the related
Mortgage Loan.
(40) The Mortgage Loans were selected from among the
outstanding fixed-rate one- to four-family mortgage loans in
Countrywide's portfolio at the Closing Date as to which the
representations and warranties made as to the Mortgage Loans set forth
in this Schedule III can be made. Such selection was not made in a
manner intended to adversely affect the interests of
Certificateholders.
(41) Except for 11 Mortgage Loans, each Mortgage Loan has a
payment date on or before the Due Date in the month of the first
Distribution Date.
(42) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Trustee certifying that the
original Mortgage Note is a Lost Mortgage Note, if such Mortgage Loan
is subsequently in default, the enforcement of such Mortgage Loan or of
the related Mortgage by or on behalf of the Trustee will not be
materially adversely affected by the absence of the original Mortgage
Note. A "Lost Mortgage Note" is a Mortgage Note the original of which
was permanently lost or destroyed and has not been replaced.
(43) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
S-III-7
<PAGE>
SCHEDULE IV
Principal Balances Schedule
[not applicable]
S-IV-1
<PAGE>
SCHEDULE V
Form of Monthly Master Servicer Report
================================================================================
LOAN LEVEL REPORTING SYSTEM
- --------------------------------------------------------------------------------
DATABASE STRUCTURE
- --------------------------------------------------------------------------------
[MONTH, YEAR]
- --------------------------------------------------------------------------------
Field Number Field Name Field Type Field Width Dec
- --------------------------------------------------------------------------------
1 INVNUM Numeric 4
- --------------------------------------------------------------------------------
2 INVBLK Numeric 4
- --------------------------------------------------------------------------------
3 INACNU Character 8
- --------------------------------------------------------------------------------
4 BEGSCH Numeric 15 2
- --------------------------------------------------------------------------------
5 SCHPRN Numeric 13 2
- --------------------------------------------------------------------------------
6 TADPRN Numeric 11 2
- --------------------------------------------------------------------------------
7 LIQEPB Numeric 11 2
- --------------------------------------------------------------------------------
8 ACTCOD Numeric 11
- --------------------------------------------------------------------------------
9 ACTDAT Numeric 4
- --------------------------------------------------------------------------------
10 INTPMT Numeric 8
- --------------------------------------------------------------------------------
11 PRNPMT Numeric 13 2
- --------------------------------------------------------------------------------
12 ENDSCH Numeric 13 2
- --------------------------------------------------------------------------------
13 SCHNOT Numeric 13 2
- --------------------------------------------------------------------------------
14 SCHPAS Numeric 7 3
- --------------------------------------------------------------------------------
15 PRINPT Numeric 7 3
- --------------------------------------------------------------------------------
16 PRIBAL Numeric 11 2
- --------------------------------------------------------------------------------
17 LPIDTE Numeric 13 2
- --------------------------------------------------------------------------------
18 DELPRN Numeric 7
- --------------------------------------------------------------------------------
19 PPDPRN Numeric 11 2
- --------------------------------------------------------------------------------
20 DELPRN Numeric 11 2
- --------------------------------------------------------------------------------
21 NXTCHG Numeric 8
- --------------------------------------------------------------------------------
22 ARMNOT Numeric 7 3
- --------------------------------------------------------------------------------
23 ARMPAS Numeric 7 3
- --------------------------------------------------------------------------------
24 ARMPMT Numeric 11 2
- --------------------------------------------------------------------------------
25 ZZTYPE Character 2
- --------------------------------------------------------------------------------
26 ISSUID Character 1
- --------------------------------------------------------------------------------
27 KEYNAME Character 8
- --------------------------------------------------------------------------------
TOTAL 240
- --------------------------------------------------------------------------------
Suggested Format: DBASE file
Modem transmission
================================================================================
S-V-1
<PAGE>
<TABLE>
COUNTRYWIDE HOME LOANS, INC.
- --------------------------------------------------------------------------------
LOAN LEVEL REPORTING SYSTEM
- --------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTOR NUMBER:
- ----------------------------------------
- ----------------------------------------
(table continued)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
(table continued)
- ------------------------------------------------
- ------------------------------------------------
(table continued)
CUTOFF: [DATE]
- ------------------------------------------------
- ------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GENERAL INFORMATION
- ----------------------------------------
Inv. # Blk # CFC # Investor #
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
Loan
Count:
- ----------------------------------------
========================================
(table continued)
CURRENT MONTH SCHEDULED INFORMATION
- ------------------------------------------------------------------------------------------------------------------------
Beg. Curtail- Payoff Total End Pass-
Balance Principal ment Amt. A/Code A/Date Interest Principal Balance Note thru P&I
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Total
Remittance:
- ------------------------------------------------------------------------------------------------------------------------
========================================================================================================================
(table continued)
TRIAL BALANCE INFORMATION
- ----------------------------------------
Del PPD
UPB LPI Prin. Prin.
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
========================================
(table continued)
ARM LOANS ONLY
- ----------------------------------------
Next Pass-
Chg. Note thru P&I
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
========================================
</TABLE>
S-V-1
<PAGE>
EXHIBIT A
[FORM OF SENIOR CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE").]
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWABS, INC.
Mortgage Pass-Through Certificates, Series 199__ -_______
Class [ ]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class with respect to a Trust Fund consisting
primarily of a pool of conventional mortgage loans
(the "Mortgage Loans") secured by first liens on one-
to four-family residential properties
A-1
<PAGE>
CWABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by CWABS, Inc. (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement") among the Depositor, Countrywide Home
Loans, Inc., as seller (in such capacity, the "Seller") and as master servicer
(in such capacity, the "Master Servicer"), and The Bank of New York, as trustee
(the "Trustee"). To the extent not defined herein, the 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.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
A-2
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 19__
THE BANK OF NEW YORK,
as Trustee
By______________________________
Countersigned:
By _______________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
A-3
<PAGE>
EXHIBIT B
[FORM OF SUBORDINATED CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER THE CODE TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS __________, 199__. THE
INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ____%. ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT OF ____% PER ANNUM
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH $__________
OF OID PER $1,000 OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE; THE
ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING THE
ACCRUAL OF OID IS APPROXIMATELY ____% (COMPOUNDED MONTHLY); THE AMOUNT OF OID
ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD IS $_________ PER $1,000 OF THE
ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE COMPUTED USING THE MONTHLY YIELD
AND DAILY COMPOUNDING DURING THE SHORT ACCRUAL PERIOD. NO REPRESENTATION IS MADE
THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION
OR AT ANY OTHER RATE. THE ACTUAL YIELD TO MATURITY MAY DIFFER FROM THAT SET
FORTH ABOVE, AND THE ACCRUAL OF OID WILL BE ADJUSTED, IN ACCORDANCE WITH SECTION
1272(a)(6) OF THE CODE, TO TAKE INTO ACCOUNT EVENTS WHICH HAVE OCCURRED DURING
ANY ACCRUAL PERIOD. THE PREPAYMENT
B-1
<PAGE>
ASSUMPTION IS INTENDED TO BE THE PREPAYMENT ASSUMPTION REFERRED TO IN SECTION
1272(a)(6)(B)(iii) OF THE CODE.]
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR DELIVERS TO THE
TRUSTEE AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN. [SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO
THE TRUSTEE BY THE TRANSFEREE'S ACCEPTANCE OF A CERTIFICATE OF THIS CLASS AND BY
A BENEFICIAL OWNER'S ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE OF THIS CLASS.]
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.
B-2
<PAGE>
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CWABS, INC.
Mortgage Pass-Through Certificates, Series 199__ -________
Class [ ]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to a Trust Fund consisting primarily of a pool
of conventional loans (the "Mortgage Loans") secured by
first liens on one- to four-family residential properties
CWABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that __________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by CWABS, Inc. (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement") among the Depositor, Countrywide Home
Loans, Inc., as seller (in such capacity, the "Seller") and as master servicer
(in such capacity, the "Master Servicer"), and The Bank of New York, as trustee
(the "Trustee"). To the extent not defined herein, the 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
B-3
<PAGE>
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
[No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such laws. In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act and
such laws, in order to assure compliance with the Securities Act and such laws,
the Certificateholder desiring to effect such transfer and such
Certificateholder's prospective transferee shall each certify to the Trustee in
writing the facts surrounding the transfer. In the event that such a transfer is
to be made within three years from the date of the initial issuance of
Certificates pursuant hereto, there shall also be delivered (except in the case
of a transfer pursuant to Rule 144A of the Securities Act) to the Trustee an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Securities Act and such state securities laws, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the Seller, the Master
Servicer or the Depositor. The Holder hereof desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee and the Depositor 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.]
No transfer of a Certificate of this Class 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 Section 4975 of the
Code, nor a person acting on behalf of any such plan, which representation
letter shall not be an expense of the Trustee or the Master Servicer, (ii) if
the purchaser is an insurance company, a representation that the purchaser is an
insurance company which is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under PTCE 95-60, or (iii)
in the case of any such Certificate presented for registration in the name of an
employee benefit plan subject to ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Trustee and the Master Servicer to the effect that
the purchase or holding of such Certificate will not result in the assets of the
Trust Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee to
any obligation in addition to those undertaken in the Agreement, which Opinion
of Counsel shall not be an expense of the Trustee or the Master Servicer. [Such
representation shall be deemed to have been made to the Trustee by the
Transferee's acceptance of a Certificate of this Class and by a beneficial
owner's acceptance of its interest in a Certificate of this Class.]
Notwithstanding anything else to the contrary herein, any purported transfer of
a Certificate of this Class 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.
B-4
<PAGE>
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
B-5
<PAGE>
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 19__
THE BANK OF NEW YORK,
as Trustee
By ___________________________
Countersigned:
By _______________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
B-6
<PAGE>
EXHIBIT C
[FORM OF RESIDUAL CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST" ISSUED
UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO BELOW AND MAY NOT BE
TRANSFERRED TO ANY PERSON EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE
TRANSFEREE OF THE DUTIES OF THE SERVICER UNDER SUCH AGREEMENT.]
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, OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS 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.
C-1
<PAGE>
Certificate No. :
Cut-off Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWABS, INC.
Mortgage Pass-Through Certificates, Series 199__ -_______
evidencing the distributions allocable to the Class A-R
Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional loans (the "Mortgage
Loans") secured by first liens on one- to four-family
residential properties
CWABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that is the registered owner of the Percentage Interest
(obtained by dividing the Denomination of this Certificate by the aggregate
Initial Certificate Balances of all Certificates of the Class to which this
Certificate belongs) in certain monthly distributions with respect to a Trust
Fund consisting of the Mortgage Loans deposited by CWABS, Inc. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Countrywide Home Loans, Inc., as seller (in such capacity, the
"Seller") and as master servicer (in such capacity, the "Master Servicer"), and
The Bank of New York, as trustee (the "Trustee"). To the extent not defined
herein, the 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.
C-2
<PAGE>
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class A-R
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.
No transfer of a Class A-R 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 Section 4975 of the Code, nor a person acting
on behalf of any such plan, which representation letter shall not be an expense
of the Trustee or the Master Servicer, or (ii) in the case of any such Class A-R
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person acting
on behalf of any such plan, an Opinion of Counsel satisfactory to the Trustee
and the Master Servicer to the effect that the purchase or holding of such Class
A-R Certificate will not result in the assets of the Trust Fund being deemed to
be "plan assets" and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee or the Master Servicer to any
obligation in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Trustee or the Master Servicer.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Class A-R 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.
Each Holder of this Class A-R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class A-R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class A-R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor, each of such documents to be
in the form described in the Agreement, (iii) each person holding or acquiring
any Ownership Interest in this Class A-R Certificate must agree to require a
transfer affidavit and to deliver a transfer certificate to the Trustee as
required pursuant to the Agreement, (iv) each person holding or acquiring an
Ownership Interest in this Class A-R Certificate must agree not to transfer an
Ownership Interest in this Class A-R Certificate if it has actual knowledge that
the proposed transferee is not a Permitted Transferee and (v) any attempted or
purported transfer of any Ownership Interest in this Class A-R Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
C-3
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 19__
THE BANK OF NEW YORK,
as Trustee
By ____________________________
Countersigned:
By _________________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
C-4
<PAGE>
EXHIBIT D
[FORM OF NOTIONAL AMOUNT CERTIFICATE]
[SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").]
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER THE CODE TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS _________, 199__. THE
INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ____%. ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT OF ____% PER ANNUM
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH $_________
OF OID ON THE INITIAL POOL STATED PRINCIPAL BALANCE; THE ANNUAL YIELD TO
MATURITY OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING THE ACCRUAL OF OID IS
APPROXIMATELY ____% (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO THE
SHORT FIRST ACCRUAL PERIOD IS $__________ ON THE INITIAL POOL STATED PRINCIPAL
BALANCE; AND THE METHOD USED TO CALCULATE THE ANNUAL YIELD TO MATURITY AND THE
AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD IS THE EXACT METHOD AS
DEFINED IN PROPOSED TREASURY REGULATIONS. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT
ANY OTHER RATE. THE ACTUAL YIELD TO MATURITY MAY DIFFER FROM THAT SET FORTH
ABOVE, AND THE ACCRUAL OF OID WILL BE ADJUSTED, IN ACCORDANCE WITH SECTION
1272(a)(6) OF THE CODE, TO TAKE INTO ACCOUNT EVENTS WHICH HAVE OCCURRED DURING
ANY ACCRUAL PERIOD. THE PREPAYMENT ASSUMPTION IS INTENDED TO BE THE PREPAYMENT
ASSUMPTION REFERRED TO IN SECTION 1272(a)(6)(B)(iii) OF THE CODE.]
D-1
<PAGE>
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Notional Amount
of this Certificate
("Denomination") :
Initial Notional Amount
of all Certificates
of this Class :
CUSIP :
CWABS, INC.
Mortgage Pass-Through Certificates, Series 199 -
Class [ ]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to a Trust Fund consisting primarily of a pool
of conventional loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties
CWABS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Master Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that _____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate specified above in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by CWABS, Inc. (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of Cut-off Date
specified above (the "Agreement") among the Depositor, Countrywide Home Loans,
Inc., as seller (in such capacity, the "Seller") and as master servicer (in such
capacity, the "Master Servicer"), and The Bank of New York, as trustee (the
"Trustee"). To the extent not defined herein, the 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.
D-2
<PAGE>
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 19__
THE BANK OF NEW YORK,
as Trustee
By _____________________________
Countersigned:
By ___________________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee [Reserved]
D-3
<PAGE>
EXHIBIT E
[Form of Reverse of Certificates]
CWABS, INC.
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as CWABS, Inc. Mortgage Pass-Through Certificates, of the Series
specified on the face hereof (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not 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 thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer
E-1
<PAGE>
and the Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. 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 therefor 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
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 Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
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 may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Seller and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the Pool Stated Principal Balance is
less than 10% of the aggregate Cut-off Date Principal Balances of the Mortgage
Loans, the Master Servicer will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and all property acquired in respect
of the Mortgage Loans at a purchase price determined as provided in the
Agreement. In the event that no such optional termination occurs, the
obligations and responsibilities created by the Agreement will terminate upon
the later of the maturity or other liquidation (or any advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund or the
disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person named
in the Agreement.
E-2
<PAGE>
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
E-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number __________, or, if mailed by check, to __________________________
________________________________________________________________________________
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
E-4
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the ____day of ___________, 19__ before me, a notary public in and
for said State, personally appeared _______________________, known to me who,
being by me duly sworn, did depose and say that he executed the foregoing
instrument.
______________________________
Notary Public
[Notarial Seal]
E-5
<PAGE>
EXHIBIT F
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Seller]
____________________________
____________________________
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller and Master
Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 1998-13
--------------------------------------------------
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 Delay Delivery Mortgage Loan, any Mortgage Loan
paid in full or any Mortgage Loan listed on the attached schedule it has
received:
(i) (a) the original Mortgage Note endorsed in the following form: "Pay
to the order of __________, without recourse" or (b) with respect to any Lost
Mortgage Note, a lost note affidavit from the Seller stating that the original
Mortgage Note was lost or destroyed; and
(ii) a duly executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments); provided, however, that it has received
no assignment with respect to any Mortgage for which the related Mortgaged
Property is located in the Commonwealth of Puerto Rico.
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.
F-1
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By: ________________________________
Name:
Title:
F-2
<PAGE>
EXHIBIT G
FORM OF DELAY DELIVERY CERTIFICATION
[date]
[Depositor]
[Master Servicer]
[Seller]
____________________________
____________________________
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller and Master
Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 1998-13
--------------------------------------------------
Gentlemen:
G-1
<PAGE>
Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto
(the "Schedule A"), delivered by the undersigned, as Trustee, on the Closing
Date in accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"). The undersigned
hereby certifies that, as to each Delay Delivery Mortgage Loan listed on
Schedule A attached hereto (other than any Mortgage Loan paid in full or listed
on Schedule B attached hereto) it has received:
(i) (a) the original Mortgage Note endorsed in the following form: "Pay
to the order of __________, without recourse" or (b) with respect to any Lost
Mortgage Note, a lost note affidavit from the Seller stating that the original
Mortgage Note was lost or destroyed; and
(ii) a duly executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments); provided, however, that it has received
no assignment with respect to any Mortgage for which the related Mortgaged
Property is located in the Commonwealth of Puerto Rico.
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.
THE BANK OF NEW YORK,
as Trustee
By: ____________________________
Name:
Title:
[RESERVED]
G-2
<PAGE>
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Seller]
________________________
________________________
Re: Pooling and Servicing Agreement among
CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as Seller and Master
Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 1998-13
--------------------------------------------------
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 the form provided in Section
2.01(c) of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator to the
Seller.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form provided
in Section 2.01(c) of the Pooling and Servicing Agreement, or, if the Depositor
has certified or the Trustee otherwise knows that the related Mortgage has not
been returned from the applicable recording office, a copy of the assignment of
the Mortgage (excluding information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
originator to the Seller.
H-1
<PAGE>
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(iv), (vi), and (xi) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By :________________________
Name:
Title:
H-2
<PAGE>
EXHIBIT I
TRANSFER AFFIDAVIT
CWABS, Inc.
Mortgage Pass-Through Certificates
Series 1998-13
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in a Class A-R Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, (the "Agreement"), relating to
the above-referenced Series, by and among CWABS, Inc., as depositor (the
"Depositor"), Countrywide Home Loans, Inc., as seller and master servicer and
The Bank of New York, as Trustee. Capitalized terms used, but not defined herein
or in Exhibit 1 hereto, shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust
I-1
<PAGE>
or common trust fund, a partnership, trust or estate, and certain cooperatives
and, except as may be provided in Treasury Regulations, persons holding
interests in pass-through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, and the Transferee
is not acting on behalf of such a plan.
* * *
I-2
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 19 .
____________________________________
PRINT NAME OF TRANSFEREE
By:_________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
________________________
[Assistant] Secretary
Personally appeared before me the above-named _______________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _______________________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of ____________, 19__.
___________________________________
NOTARY PUBLIC
My Commission expires the
____ day of _____________, 19__.
I-3
<PAGE>
EXHIBIT 1
to EXHIBIT I
Certain Definitions
-------------------
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Code Section 511 on unrelated business taxable income) on any excess inclusions
(as defined in Code Section 860E(c)(1)) with respect to any Class A-R
Certificate, (iv) rural electric and telephone cooperatives described in Code
Section 1381(a)(2)(c), (v) a Person that is not a citizen or resident of the
United States, a corporation, partnership, or other entity created or organized
in or under the laws of the United States or any political subdivision thereof,
or an estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, and (vi) any other Person so designated by the Trustee based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that certain Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Code Section 7701 or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and, with the
exception of the FHLMC, a majority of its board of directors is not selected by
such governmental unit.
"Person": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-4
<PAGE>
EXHIBIT 2
to EXHIBIT I
Section 5.02(c) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership Interest
in a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class A-R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Class A-R Certificate and (C) not to Transfer its Ownership Interest
in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit, Transferor Certificate and either the
Rule 144A Letter or the Investment Letter. The Trustee shall be
entitled but not obligated to recover from any Holder of a Class A-R
Certificate that was in
I-5
<PAGE>
fact not a Permitted Transferee at the time it became a Holder or, at
such subsequent time as it became other than a Permitted Transferee,
all payments made on such Class A-R Certificate at and after either
such time. Any such payments so recovered by the Trustee shall be paid
and delivered by the Trustee to the last preceding Permitted Transferee
of such Certificate.
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
I-6
<PAGE>
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
_____________________
Date
CWABS, Inc.
4500 Park Granada
Calabasas, California 91302
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attention: Mortgage-Backed Securities Group Series 1998-13
Re: CWABS, Inc., Mortgage Pass-Through Certificates,
Series 1998-13, Class ,
------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Class A-R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
___________________________
Print Name of Transferor
By: ______________________
Authorized Officer
J-1
<PAGE>
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
______________________
Date
CWABS, Inc.
4500 Park Granada
Calabasas, California 91302
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attention: Mortgage-Backed Securities Group Series 1998-13
Re: CWABS, Inc. Mortgage Pass-Through Certificates,
Series 1998-13, Class __
-----------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we 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 Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the 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, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition 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 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 Certificates in accordance with clause (g) below), (f)
we have not offered or sold any Certificates to, or solicited offers to buy any
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
K-1
<PAGE>
not sell, transfer or otherwise dispose of any 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 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 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.
Very truly yours,
_______________________________
Print Name of Transferee
By: __________________________
Authorized Officer
K-2
<PAGE>
EXHIBIT L
FORM OF RULE 144A LETTER
__________________________
Date
CWABS, Inc.
4500 Park Granada
Calabasas, California 91302
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attention: Mortgage-Backed Securities Group Series 1998-13
Re: CWABS, Inc. Mortgage Pass-Through Certificates,
Series 1998-13, Class __
-----------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the 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, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition 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 Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with
L-1
<PAGE>
respect to the Certificates, any interest in the Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed 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 Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
L-2
<PAGE>
ANNEX 1 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with 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 either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other
------------------
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking
----
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of
---------
which is attached hereto.
------------------------
___ Savings and Loan. The Buyer (a) is a savings and
-----------------
loan association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
----------------------------------
L-3
<PAGE>
___ Broker-dealer. The Buyer is a dealer registered
-------------
pursuant to Section 15 of the Securities Exchange
Act of 1934.
___ Insurance Company. The Buyer is an insurance company
-----------------
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established
-------------------
and maintained by a State, its political
subdivisions, or any agency or instrumentality of
the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan
----------
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment
-------------------
advisor registered under the Investment Advisors Act
of 1940.
___ Small Business Investment Company. 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. Buyer is a business
------------------------------
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940.
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) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under
L-4
<PAGE>
the Buyer's direction. However, such securities were not included if the Buyer
is a majority-owned, consolidated subsidiary of another enterprise and the Buyer
is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
____________________________________
Print Name of Buyer
By: ________________________________
Name:
Title:
Date:_______________________________
L-5
<PAGE>
ANNEX 2 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC 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
L-6
<PAGE>
subsidiaries of the same parent or because one investment adviser is a majority
owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
----------
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
___________________________________
Print Name of Buyer or Adviser
By:________________________________
Name:
Title:
IF AN ADVISER:
___________________________________
Print Name of Buyer
Date: _____________________________
L-7
<PAGE>
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CWABS, Inc.
Mortgage Pass-Through Certificates
Series 1998-13
Loan Information
- ----------------
Name of Mortgagor: _________________________________
Servicer
Loan No.: _________________________________
Trustee
- -------
Name: _________________________________
Address: _________________________________
_________________________________
Trustee
Mortgage File No.: _________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from The Bank of New York, as Trustee for the Holders of Mortgage
Pass-Through Certificates, of the above-referenced Series, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series among the Trustee, Countrywide Home Loans, Inc., as
Seller and Master Servicer and CWABS, Inc., as Depositor.
( ) Mortgage Note dated_____________, 19__, in the original principal sum
of $__________, made by __________________, payable to, or endorsed to
the order of, the Trustee.
( ) Mortgage recorded on ________________ as instrument no.
___________________ in the County Recorder's Office of the County of
________________, State of ________________ in book/reel/docket _____
___________ of official records at page/image ________________.
() Deed of Trust recorded on ________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________ , State of ________________ in book/reel/docket
________________ of official records at page/image ________________ .
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
________________ as instrument no. ________________ in the County
Recorder's Office of the County of
M-1
<PAGE>
________________, State of ________________ in book/reel/docket
________________ of official records at page/image ________________ .
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ________________________________________________________________
( ) ________________________________________________________________
( ) ________________________________________________________________
( ) ________________________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit
the Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Servicer assert or seek to assert any claims or rights of
setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trustee, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
COUNTRYWIDE HOME LOANS, INC.
By_______________________________
Its_______________________________
Date: ______________________, 19__
M-2
<PAGE>
EXHIBIT N
REQUEST FOR RELEASE OF DOCUMENTS
To: The Bank of New York Attn: Mortgage Custody
Services
Re: The Pooling & Servicing Agreement dated June 1, 1998 among
Countrywide Home Loans, Inc., as Seller and as Master Servicer,
CWABS, Inc. and The Bank of New York as Trustee
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee for CWABS, Inc., we request the release of the Mortgage Loan File for
the Mortgage Loan(s) described below, for the reason indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
1. Mortgage Loan paid in full (Countrywide Home Loans, Inc.
hereby certifies that all amounts have been received).
2. Mortgage Loan Liquidated (Countrywide Home Loans, Inc. hereby
certifies that all proceeds of foreclosure, insurance, or
other liquidation have been finally received).
3. Mortgage Loan in Foreclosure.
4. Other (explain):
N-1
<PAGE>
If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Mortgage Loan. If item 3 or 4 is checked, upon return of
all of the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
COUNTRYWIDE HOME LOANS, INC.
4500 Park Granada
Calabasas, California 91302
By: __________________
Name: _________________
Title: ________________
Date: _________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By: __________________
Name: _________________
Title: ________________
Date: _________________
N-2
<PAGE>
BROWN & WOOD LLP
One World Trade Center
New York, New York 10048
Telephone: (212) 839-5300
Facsimile: (212) 839-5599
July 16, 1998
BY MODEM
- --------
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: CWABS, Inc.
Mortgage Pass-Through Certificates,
Series 1998-13
-------------------------------------
Ladies and Gentlemen:
On behalf of CWABS, Inc. (the "Company"), we enclose herewith for
filing, pursuant to the Securities and Exchange Act of 1934, the Company's
Current Report on Form 8-K, for the Pooling and Servicing Agreement in
connection with the above-referenced transaction.
Very truly yours,
/ s / Amy Sunshine
Amy Sunshine
