______________________________________________________________________
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): April 1, 1997
CWMBS, INC. (as depositor under the Pooling and
Servicing Agreement, dated as of April 1, 1997,
providing for the issuance of the CWMBS, INC.,
Residential Asset Securitization Trust 1997-A4
Mortgage Pass-Through Certificates, Series 1997-D).
CWMBS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-08389 95-4449516
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
155 North Lake Avenue
Pasadena, California 91101
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (818) 304-5591
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_____________________________________________________________________
Item 5. Other Events.
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On April 1, 1997, CWMBS, Inc. (the "Company") entered into a Pooling and
Servicing Agreement dated as of April 1, 1997 (the "Pooling and Servicing
Agreement"), by and among the Company, as depositor, Independent National
Mortgage Corporation ("INMC"), 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 1997-D (the
"Certificates"). The Pooling and Servicing Agreement is annexed hereto as
Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99.1. Pooling and Servicing Agreement, dated as of April 1, 1997, by
and among the Company, INMC and the Trustee.
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.
CWMBS, INC.
By: /s/ David A. Spector
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David A. Spector
Vice President
Dated: April 28, 1997
Exhibit Index
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Exhibit Page
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99.1. Pooling and Servicing Agreement,
dated as of April 1, 1997, by
and among, the Company, INMC
and the Trustee 5
EXHIBIT 99.1
------------
Execution
CWMBS, INC.,
Depositor
INDEPENDENT NATIONAL MORTGAGE CORPORATION,
Seller and Master Servicer
and
THE BANK OF NEW YORK,
Trustee
______________________________________
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 1997
______________________________________
RESIDENTIAL ASSET SECURITIZATION TRUST 1997-A4
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-D
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
Accretion Directed Certificates . . . . . . . . . . . . . . . . . . . . . I-1
Accrual Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Accrual Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Accrual Termination Date . . . . . . . . . . . . . . . . . . . . . . . . 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-6
Class Interest Shortfall . . . . . . . . . . . . . . . . . . . . . . . . I-6
Class Optimal Interest Distribution Amount . . . . . . . . . . . . . . . I-7
Class PO Deferred Amount . . . . . . . . . . . . . . . . . . . . . . . . I-7
Class PO Principal Distribution Amount . . . . . . . . . . . . . . . . . I-7
Class Subordination Percentage . . . . . . . . . . . . . . . . . . . . . I-7
Class Unpaid Interest Amounts . . . . . . . . . . . . . . . . . . . . . . I-7
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
COFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
COFI Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Component Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Component Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Cooperative Corporation . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Cooperative Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Cooperative Property . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Cooperative Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Cooperative Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Corresponding Classes of Certificates . . . . . . . . . . . . . . . . . . I-8
Cut-off Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Cut-off Date Pool Principal Balance . . . . . . . . . . . . . . . . . . . I-8
Cut-off Date Principal Balance . . . . . . . . . . . . . . . . . . . . . I-9
Debt Service Reduction . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Debt Service Reduction Mortgage Loan . . . . . . . . . . . . . . . . . . I-9
Defective Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Deficient Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Delay Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Deleted Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Denomination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Depository Participant . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Discount Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . I-10
Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Distribution Account Deposit Date . . . . . . . . . . . . . . . . . . . I-10
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Due Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Duff & Phelps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Eligible Account . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
ERISA-Restricted Certificate . . . . . . . . . . . . . . . . . . . . . I-11
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Excess Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Excess Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Expense Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Expense Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
FHLMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
FIRREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Fitch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
FNMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Fraud Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Fraud Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Fraud Loss Coverage Amount . . . . . . . . . . . . . . . . . . . . . . I-12
Fraud Loss Coverage Termination Date . . . . . . . . . . . . . . . . . I-13
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Indirect Participant . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Initial Bankruptcy Loss Coverage Amount . . . . . . . . . . . . . . . . I-13
Initial Component Balance . . . . . . . . . . . . . . . . . . . . . . . I-13
Initial LIBOR Rate . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Insured Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Interest Accrual Period . . . . . . . . . . . . . . . . . . . . . . . . I-13
Interest Determination Date . . . . . . . . . . . . . . . . . . . . . . I-14
Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Last Scheduled Distribution Date . . . . . . . . . . . . . . . . . . . I-14
Latest Possible Maturity Date . . . . . . . . . . . . . . . . . . . . . I-14
LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
LIBOR Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Liquidated Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-14
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Loan-to-Value Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Majority in Interest . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Master REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Master Servicer Advance Date . . . . . . . . . . . . . . . . . . . . . I-15
Master Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Master Servicing Fee Rate . . . . . . . . . . . . . . . . . . . . . . . I-15
Monthly Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Mortgage File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Mortgage Loan Schedule . . . . . . . . . . . . . . . . . . . . . . . . I-16
Mortgage Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16
Mortgage Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Mortgaged Property . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Mortgagor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
MR Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Net Prepayment Interest Shortfalls . . . . . . . . . . . . . . . . . . I-17
Non-Delay Certificates . . . . . . . . . . . . . . . . . . . . . . . . I-17
Non-Discount Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . I-17
Non-PO Formula Principal Amount . . . . . . . . . . . . . . . . . . . . I-17
Non-PO Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Nonrecoverable Advance . . . . . . . . . . . . . . . . . . . . . . . . I-18
Notice of Final Distribution . . . . . . . . . . . . . . . . . . . . . I-18
Notional Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Notional Amount Certificates . . . . . . . . . . . . . . . . . . . . . I-18
Offered Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Optional Termination . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Original Applicable Credit Support Percentage . . . . . . . . . . . . . I-18
Original Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . I-19
Original Subordinated Principal Balance . . . . . . . . . . . . . . . . I-19
OTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Outside Reference Date . . . . . . . . . . . . . . . . . . . . . . . . I-19
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Outstanding Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-19
Ownership Interest . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Pass-Through Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Percentage Interest . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . I-20
Permitted Transferee . . . . . . . . . . . . . . . . . . . . . . . . . I-21
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-22
Physical Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-22
Planned Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-22
Planned Principal Classes . . . . . . . . . . . . . . . . . . . . . . . I-22
PO Formula Principal Amount . . . . . . . . . . . . . . . . . . . . . . I-22
PO Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Pool Stated Principal Balance . . . . . . . . . . . . . . . . . . . . . I-23
Prepayment Interest Shortfall . . . . . . . . . . . . . . . . . . . . . I-23
Prepayment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Primary Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . I-23
Principal Only Certificates . . . . . . . . . . . . . . . . . . . . . . I-23
Principal Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Principal Prepayment in Full . . . . . . . . . . . . . . . . . . . . . I-23
Private Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Pro Rata Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Proprietary Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . . . . I-24
PUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Qualified Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Rating Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Realized Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Recognition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Reference Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Refinancing Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-25
Regular Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Relief Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Relief Act Reductions . . . . . . . . . . . . . . . . . . . . . . . . . I-25
REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
REMIC Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
REMIC Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
REO Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
Request for Release . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
Required Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
Required Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . I-26
Residual Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-26
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
Restricted Classes . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
SAIF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
S&P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
Scheduled Balances . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Scheduled Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Scheduled Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Seller/Servicer Guide . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Senior Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Senior Credit Support Depletion Date . . . . . . . . . . . . . . . . . I-27
Senior Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Senior Prepayment Percentage . . . . . . . . . . . . . . . . . . . . . I-27
Senior Principal Distribution Amount . . . . . . . . . . . . . . . . . I-28
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Servicer Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Servicing Account . . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Servicing Advances . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Servicing Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . I-30
Servicing Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . I-30
Special Hazard Coverage Termination Date . . . . . . . . . . . . . . . I-30
Special Hazard Loss . . . . . . . . . . . . . . . . . . . . . . . . . . I-30
Special Hazard Loss Coverage Amount . . . . . . . . . . . . . . . . . . I-31
Special Hazard Mortgage Loan . . . . . . . . . . . . . . . . . . . . . I-31
SR Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Startup Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Stated Principal Balance . . . . . . . . . . . . . . . . . . . . . . . I-31
Subordinated Certificates . . . . . . . . . . . . . . . . . . . . . . . I-31
Subordinated Percentage . . . . . . . . . . . . . . . . . . . . . . . . I-31
Subordinated Prepayment Percentage . . . . . . . . . . . . . . . . . . I-32
Subordinated Principal Distribution Amount . . . . . . . . . . . . . . I-32
Subservicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-32
Subsidiary REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . I-32
Subsidiary REMIC Interest . . . . . . . . . . . . . . . . . . . . . . . I-32
Subsidiary REMIC Regular Interest . . . . . . . . . . . . . . . . . . . I-33
Substitute Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-33
Substitution Adjustment Amount . . . . . . . . . . . . . . . . . . . . I-33
Targeted Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . I-33
Targeted Principal Classes . . . . . . . . . . . . . . . . . . . . . . I-33
Tax Matters Person . . . . . . . . . . . . . . . . . . . . . . . . . . I-33
Tax Matters Person Certificate . . . . . . . . . . . . . . . . . . . . I-33
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-33
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-33
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-33
Trustee Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-34
Trustee Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . I-34
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-34
Withdrawal Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-34
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans . . . . . . . . . . . . . . II-1
SECTION 2.02. Acceptance by the Trustee of the Mortgage
Loans . . . . . . . . . . . . . . . . . . . . . . . . . II-4
SECTION 2.03. Representations, Warranties and Covenants of
the Seller and the Master Servicer. . . . . . . . . . . II-6
SECTION 2.04. Representations and Warranties of the Depositor
as to the Mortgage Loans . . . . . . . . . . . . . . . . II-9
SECTION 2.05. Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases. . . . . . . . . . . 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
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. Successor Servicers . . . . . . . . . . . . . . . . . . III-3
SECTION 3.04. Liability of the Master Servicer . . . . . . . . . . . . III-3
SECTION 3.05. No Contractual Relationship Between Servicers
and the Trustee . . . . . . . . . . . . . . . . . . . . III-4
SECTION 3.06. Rights of the Depositor and the Trustee in
Respect of the Master Servicer . . . . . . . . . . . . . III-4
SECTION 3.07. Trustee to Act as Master Servicer . . . . . . . . . . . III-4
SECTION 3.08. Collection of Mortgage Loan Payments; Servicing
Accounts; Collection Account; Certificate
Account; Distribution Account . . . . . . . . . . . . . III-5
SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts . . . . . . . . . . . . . . . . . III-9
SECTION 3.10. Access to Certain Documentation and Information
Regarding the Mortgage Loans . . . . . . . . . . . . . III-10
SECTION 3.11. Permitted Withdrawals from the Certificate
Account and the Distribution Account . . . . . . . . . III-10
SECTION 3.12. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies . . . . . . . . . . . . . . III-12
SECTION 3.13. Enforcement of Due-On-Sale Clauses; Assumption
Agreements . . . . . . . . . . . . . . . . . . . . . . III-14
SECTION 3.14. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans . . . . . . . . . III-15
SECTION 3.15. Trustee to Cooperate; Release of Mortgage
Files . . . . . . . . . . . . . . . . . . . . . . . . III-19
SECTION 3.16. Documents, Records and Funds in Possession of
the Master Servicer to be Held for the Trustee . . . . III-20
SECTION 3.17. Servicing Compensation . . . . . . . . . . . . . . . . III-20
SECTION 3.18. Access to Certain Documentation . . . . . . . . . . . III-21
SECTION 3.19. Annual Statement as to Compliance . . . . . . . . . . III-21
SECTION 3.20. Annual Independent Public Accountants'
Servicing Statement; Financial Statements . . . . . . III-22
SECTION 3.21. Errors and Omissions Insurance; Fidelity Bonds . . . . III-22
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances . . . . . . . . . . . . . . . . . . . . . . . . IV-1
SECTION 4.02. Priorities of Distribution . . . . . . . . . . . . . . . IV-1
SECTION 4.03. (Reserved) . . . . . . . . . . . . . . . . . . . . . . . IV-7
SECTION 4.04. (Reserved) . . . . . . . . . . . . . . . . . . . . . . . IV-7
SECTION 4.05. Allocation of Realized Losses . . . . . . . . . . . . . IV-7
SECTION 4.06. Monthly Statements to Certificateholders . . . . . . . . IV-8
SECTION 4.07. Determination of Pass-Through Rates for COFI
Certificates . . . . . . . . . . . . . . . . . . . . . . IV-10
SECTION 4.08. Determination of Pass-Through Rates for LIBOR
Certificates . . . . . . . . . . . . . . . . . . . . . . IV-12
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates . . . . . . . . . . . . . . . . . . . . . V-1
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates . . . . . . . . . . . . . . . V-2
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . . . . . V-7
SECTION 5.04. Persons Deemed Owners . . . . . . . . . . . . . . . . . . V-7
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses . . . . . . . . . . . . . . . . . . . . . . . . V-8
SECTION 5.06. Maintenance of Office or Agency . . . . . . . . . . . . . V-8
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
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 the Master
Servicer . . . . . . . . . . . . . . . . . . . . . . . . VI-2
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default . . . . . . . . . . . . . . . . . . . VII-1
SECTION 7.02. Trustee to Act; Appointment of Successor . . . . . . . . VII-3
SECTION 7.03. Notification to Certificateholders . . . . . . . . . . . VII-4
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the 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 the Trustee . . . . . . . VIII-4
SECTION 8.07. Resignation and Removal of the Trustee . . . . . . . . VIII-5
SECTION 8.08. Successor Trustee . . . . . . . . . . . . . . . . . . VIII-6
SECTION 8.09. Merger or Consolidation of the Trustee . . . . . . . . VIII-6
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee . . . . VIII-6
SECTION 8.11. Tax Matters . . . . . . . . . . . . . . . . . . . . . VIII-8
SECTION 8.12. Periodic Filings. . . . . . . . . . . . . . . . . . . VIII-10
ARTICLE IX
TERMINATION
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-3
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . X-1
SECTION 10.02. Recordation of Agreement; Counterparts . . . . . . . . . . X-2
SECTION 10.03. Governing Law . . . . . . . . . . . . . . . . . . . . . . X-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
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
EXHIBITS
--------
Exhibit A: Form of Senior Certificate . . . . . . . . . . . . . . . . A-1
Exhibit B: Form of Subordinated Certificate . . . . . . . . . . . . . B-1
Exhibit C: Form of Residual Certificate . . . . . . . . . . . . . . . C-1
Exhibit D: Form of Notional Amount Certificate . . . . . . . . . . . D-1
Exhibit E: Form of Reverse of Certificates . . . . . . . . . . . . . E-1
Exhibit F: (Reserved) . . . . . . . . . . . . . . . . . . . . . . . . F-1
Exhibit G: Form of Initial Certification of Trustee . . . . . . . . . G-1
Exhibit H: Form of Final Certification of Trustee . . . . . . . . . . H-1
Exhibit I: Form of 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: Form of Request for Release (for Trustee) . . . . . . . . M-1
Exhibit N: Form of Request for Release (Mortgage Loan
Paid in Full, Repurchased and Released) . . . . . . . . . N-1
Exhibit O: (Reserved) . . . . . . . . . . . . . . . . . . . . . . . . O-1
THIS POOLING AND SERVICING AGREEMENT, dated as of April 1, 1997,
among CWMBS, INC., a Delaware corporation, as depositor (the "Depositor"),
INDEPENDENT NATIONAL MORTGAGE CORPORATION ("Indy Mac"), a Delaware
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 two REMICs. The Subsidiary REMIC
will consist of all of the assets constituting the Trust Fund and will be
evidenced by the Subsidiary REMIC Regular Interests (which will be
uncertificated and will represent the "regular interests" in the Subsidiary
REMIC) and the SR Interest as the single "residual interest" in the
Subsidiary REMIC. The Trustee will hold the Subsidiary REMIC Regular
Interests. The Master REMIC will consist of the Subsidiary REMIC Regular
Interests and will be evidenced by the Regular Certificates (which will
represent the "regular interests" in the Master REMIC) and the MR Interest as
the single "residual interest" in the Master REMIC. The Class A-R
Certificates will represent beneficial ownership of the SR Interest and the
MR Interest. 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):
<TABLE>
<CAPTION>
Integral Multiples
Class Certificate Minimum in Excess
Balance Pass-Through Rate Denomination of Minimum
----------------- ----------------- ------------ ----------------
<S> <C> <C> <C> <C>
Class A-1 $25,551,000.00 6.75% $25,000 $1,000
Class A-2 $24,197,000.00 7.05% $25,000 $1,000
Class A-3 $17,091,000.00 7.25% $25,000 $1,000
Class A-4 $19,071,000.00 7.30% $25,000 $1,000
Class A-5 $18,451,000.00 7.55% $25,000 $1,000
Class A-6 $13,750,237.00 7.60% $25,000 $1,000
Class A-7 $8,664,911.00 7.75% $25,000 $1,000
Class A-8 $15,200,000.00 7.75% $25,000 $1,000
Class A-9 $37,353,763.00 (1) $25,000 $1,000
Class A-10 (2) (1) $25,000(3) $1,000(3)
Class A-11 $12,165,000.00 7.75% $25,000 $1,000
Class A-12 $18,243,000.00 7.75% $25,000 $1,000
Class PO $505,052.00 (4) $25,000 $1,000
Class X (2) (5) $25,000(3) $1,000(3)
Class A-R(6) $ 100.00 7.75% $100 N/A
Class B-1 $9,572,042.00 7.75% $25,000 $1,000
Class B-2 $3,190,681.00 7.75% $25,000 $1,000
Class B-3 $2,051,151.00 7.75% $25,000 $1,000
Class B-4 $1,139,529.00 7.75% $100,000 $1,000
Class B-5 $569,765.00 7.75% $100,000 $1,000
Class B-6 $1,139,529.00 7.75% $100,000 $1,000
</TABLE>
_______________
(1) The Class A-9 and Class A-10 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>
Formula for
Initial Pass- Maximum/Minimum Calculation of
Class Through Rate Pass-Through Rate Pass-Through Rate
------- ------------- -------------------
<S> <C> <C>
A-9 5.8375% 9.50%/0.40% LIBOR + 40 basis points
A-10 3.6625% 9.10%/0.00% 9.10% - LIBOR
</TABLE>
(2) The Class A-10 and Class X Certificates will be Notional Amount
Certificates, will have no principal balance and will bear interest on
their respective Notional Amounts (initially $37,353,763 and
$202,443,177, respectively).
(3) The minimum denomination is based on the Notional Amount.
(4) The Class PO Certificates will be Principal Only Certificates and will
not bear interest.
(5) The Pass-Through Rate for the Class X Certificates for any Distribution
Date will be equal to the excess of (a) the weighted average of the
Adjusted Net Mortgage Rates of the Non-Discount Mortgage Loans over (b)
7.75% per annum. The Pass-Through Rate for the Class X Certificates for
the first Distribution Date is 0.613% per annum.
(6) The Class A-R Certificates will represent the beneficial ownership of
the SR Interest (described in the table below) and the MR Interest. The
initial principal balance and interest rate applicable to the MR
Interest shall be equal to the initial Class Certificate Balance and
Pass-Through Rate, respectively, of the Class A-R Certificates.
Principal of and interest on the Subsidiary REMIC Regular Interests and
the SR Interest shall be allocated to the Corresponding Classes of
Certificates in the manner set forth in the following table:
<TABLE>
Corresponding Class of Certificates(1)
<CAPTION>
Subsidiary REMIC Initial Principal Allocation Allocation
Interest Balance Interest Rate of Principal of Interest
--------------------- ------------------- --------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
1 $25,551,000.00 6.75% A-1 A-1
2 $24,197,000.00 7.05% A-2 A-2
3 $17,091,000.00 7.25% A-3 A-3
4 $19,071,000.00 7.30% A-4 A-4
5 $18,451,000.00 7.55% A-5 A-5
6 $13,750,237.00 7.60% A-6 A-6
7 $8,664,911.00 7.75% A-7 A-7
8 $15,200,000.00 7.75% A-8 A-8
9 $37,353,763.00 9.50% A-9 A-9 A-10 (2)
10 $12,165,000.00 7.75% A-11 A-11
11 $18,243,763.00 7.75% A-12 A-12
12 $505,502.00 (3) PO PO
13 $9,572,042.00 7.75% B-1 B-1
14 $3,190,681.00 7.75% B-2 B-2
15 $2,051,151.00 7.75% B-3 B-3
16 $1,139,529.00 7.75% B-4 B-4
17 $569,765.00 7.75% B-5 B-5
18 $1,139,529.00 7.75% B-6 B-6
19 (4) (5) -- X
20 $100.00 7.75% M-R(6) M-R(6)
SR (7) (7) A-R A-R
</TABLE>
_______________
(1) The amount of principal and interest allocable from a Subsidiary REMIC
Regular Interest to its Corresponding Class of Certificates on any
Distribution Date shall be 100%.
(2) Interest on Subsidiary REMIC Regular Interest 10 will be allocated to
the Class A-9 Certificates and the Class A-10 Certificates on a pro rata
basis in accordance with their respective Pass-Through Rates.
(3) Subsidiary REMIC Regular Interest 12 will be a principal only Subsidiary
REMIC Regular Interest and will not bear interest.
(4) The Notional Amount of Subsidiary REMIC Interest 19 with respect to any
Distribution Date will be equal to the Notional Amount of the Class X
Certificates with respect to such Distribution Date.
(5) The Interest Rate for Subsidiary REMIC Interest 19 for any Distribution
Date will be equal to the Pass-Through Rate applicable to the Class X
Certificates with respect to such Distribution Date.
(6) The beneficial ownership of the MR Interest and the SR Interest is
represented by the Class A-R Certificates.
(7) The SR Interest will have no principal balance and will not bear
interest.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Accretion Directed
Certificates None.
Accrual Certificates None.
Book-Entry Certificates All Classes of Certificates other than the
Physical Certificates.
COFI Certificates None.
Component Certificates None.
Components For purposes of calculating distributions
of principal, the Component Certificates,
if any, 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.
ERISA-Restricted
Certificates Class PO Certificates, Class X
Certificates, Residual Certificates and
Subordinated Certificates.
Floating Rate Certificates Class A-9 Certificates.
Inverse Floating Rate
Certificates Class A-10 Certificates.
LIBOR Certificates Class A-9 and Class A-10 Certificates.
Non-Delay Certificates The LIBOR Certificates.
Notional Amount Certificates Class A-10 and Class X Certificates.
Offered Certificates All Classes of Certificates other than the
Private Certificates.
Physical Certificates Class A-R Certificates and Private
Certificates.
Planned Principal Classes None.
Primary Planned Principal
Classes None.
Principal Only Certificates Class PO Certificates.
Private Certificates Class B-4, Class B-5 and Class B-6
Certificates.
Rating Agencies S&P and Duff & Phelps.
Regular Certificates All Classes of Certificates other than the
Class A-R Certificates.
Residual Certificates Class A-R Certificates.
Scheduled Principal Classes None.
Secondary Planned
Principal Classes 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 A-9, Class A-10, Class A-
11, Class A-12, Class PO, Class X and
Class A-R Certificates.
Subordinated Certificates Class B-1, Class B-2, Class B-3, Class B-
4, Class B-5 and Class B-6 Certificates.
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.
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 Class of Accrual Certificates
--------------
and any Distribution Date prior to the 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)(ii).
Accrual Certificates: As specified in the Preliminary Statement.
--------------------
Accrual Termination Date: Not applicable.
------------------------
Additional Collateral: With respect to any Mortgage 100(Service
---------------------
Mark) Loan, the marketable securities held from time to time as security for
the repayment of such Mortgage 100(Service Mark) Loan and any related
collateral. With respect to any Parent Power(Service Mark) Loan, the third-
party guarantee for such Parent Power(Service Mark) Loan, together with (i)
any marketable securities held from time to time as security for the
performance of such guarantee and any related collateral or (ii) any
mortgaged property securing the performance of such guarantee, the related
home equity line of credit loan and any related collateral.
Additional Collateral Loan: Each Mortgage Loan that is a Mortgage
--------------------------
100(Service Mark) Loan or a Parent Power(Service Mark) Loan.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any time,
----------------------
the per annum rate equal to the Mortgage Rate less the sum of the Master
Servicing Fee Rate and the related 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 and
the Master Servicing Fee, 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 the applicable 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 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)(i).
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 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, the value of the Mortgaged
Property based upon the appraisal made at the time of the origination of such
Refinancing 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 3.11(a) and amounts
permitted to be withdrawn from the Distribution Account pursuant to clauses
(i) - (iii), inclusive, of Section 3.11(b), (b) the amount of the related
Advance, (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 and (d) any amount
deposited on the related Distribution Account Deposit Date pursuant to
Section 3.12.
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 3.08(e)
with a depository institution in the name of the Master Servicer for the
benefit of the Trustee on behalf of Certificateholders and designated
"Independent National Mortgage Corporation in trust for the registered
holders of CWMBS, Inc. Mortgage Pass-Through Certificates Series 1997-D".
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 4.05 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.
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).
Class Optimal Interest Distribution Amount: With respect to any
------------------------------------------
Distribution Date and interest-bearing Class, 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 or
Notional Amount, as applicable, subject to reduction pursuant to Section
4.02(d), and (ii) any Class Unpaid Interest Amounts for such Class.
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 fraction (expressed as
a percentage) the numerator of which is the Class Certificate Balance of such
Class of Subordinated Certificates immediately prior to such Distribution
Date and the denominator of which is the aggregate of the Class Certificate
Balances of all Classes of Certificates immediately prior to such
Distribution Date.
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: April 29, 1997.
------------
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.
-----------------
Collection Account: The Eligible Account or Accounts established
------------------
and maintained by the Master Servicer in accordance with Section 3.08(c).
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.
----------------------
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.
Cooperative Loan: Any Mortgage Loan secured by Cooperative 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 Cooperative Shares of the Cooperative
Corporation.
Cooperative Shares: Shares issued by a 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, CWMBS, Inc. Series 1997-D), 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 appearing
opposite such Subsidiary REMIC Regular Interest in the Preliminary Statement.
Cut-off Date: April 1, 1997.
------------
Cut-off Date Pool Principal Balance: $227,905,761.
-----------------------------------
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.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
------------------------------------
became the subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required to
-----------------------
be repurchased pursuant to Section 2.02 or 2.03.
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.
------------------
Deleted Mortgage Loan: As defined in Section 2.03(c).
---------------------
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: CWMBS, 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 18th day of
------------------
each month or if such 18th day is not a Business Day the next succeeding
Business Day; provided, however, that if such next succeeding Business Day
-------- -------
is less than two Business Days prior to the related Distribution Date, then
the Determination Date shall be the next Business Day preceding the 18th day
of such month.
Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net
----------------------
Mortgage Rate that is less than the Required Coupon.
Distribution Account: The separate Eligible Account created and
--------------------
maintained by the Trustee pursuant to Section 3.08(f) in the name of the
Trustee for the benefit of the Certificate-holders and designated "The Bank
of New York in trust for registered holders of CWMBS, Inc. Mortgage Pass-
Through Certificates, Series 1997-D". 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 May 1997.
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 E.
Monroe Street, 35th 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, but only if
Moody's is not a Rating Agency) 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 or the SAIF (to the limits established
by the FDIC or the SAIF) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to the Trustee and to each Rating Agency, the Certificateholders have a claim
with respect to the funds in such account or a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in
which such account is maintained, or (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered
depository institution or 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.
ERISA-Restricted Certificate: As specified in the Preliminary
----------------------------
Statement.
Escrow Account: The Eligible Account or Accounts established and
--------------
maintained pursuant to Section 3.09(a).
Event of Default: As defined in Section 7.01.
----------------
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 3.11(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 Fees: As to each Mortgage Loan, the sum of the related
------------
Servicing Fee, Master Servicing Fee, and Trustee Fee.
Expense Rate: As to each Mortgage Loan, the sum of the related
------------
Servicing Fee Rate, Master Servicing Fee Rate and 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 Investors Service, L.P., 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
Investors Service, L.P., 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.
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, $4,558,115
--------------------------
subject to reduction from time to time, by the amount of Fraud Losses
allocated to the Certificates. 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 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 4.07 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 Loss Coverage Amount: $100,000.
---------------------------------------
Initial Component Balance: As specified in the Preliminary
-------------------------
Statement.
Initial LIBOR Rate: 5.4375%
------------------
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, corresponding Subsidiary REMIC Regular Interest and any
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to each Class of Non-Delay Certificates, corresponding
Subsidiary REMIC Regular Interest and any 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.
Interest Rate: With respect to each Subsidiary REMIC Interest, the
-------------
applicable rate set forth or calculated in the manner described in the
Preliminary Statement.
Last Scheduled Distribution Date: The Distribution Date in the
--------------------------------
month immediately following the month of the latest scheduled maturity date
for any of the Mortgage Loans.
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.
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 certified (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.
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 REMIC: As described in the Preliminary Statement.
------------
Master Servicer: Independent National Mortgage Corporation, a
---------------
Delaware 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 equal to one month's interest at the related
Master Servicing Fee Rate on the Stated Principal Balance of such Mortgage
Loan or, in the event of any payment of interest which accompanies a
Principal Prepayment in Full made by the Mortgagor, interest at the Master
Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan for
the period covered by such payment of interest, subject to reduction as
provided in Section 3.17.
Master Servicing Fee Rate: With respect to each Mortgage Loan,
-------------------------
0.125% per annum.
Monthly Statement: The statement delivered to the
-----------------
Certificateholders pursuant to Section 4.06.
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 100(Service Mark) Loan: A Mortgage Loan that has a Loan
-------------------------------
to-Value Ratio at origination in excess of 95.00% and that is secured by
Additional Collateral, and is designated a "Mortgage 100(Service Mark) Loan".
Mortgage File: The mortgage documents listed in Section 2.01
-------------
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.
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 PUD, (c) a
condominium unit, (d) a two- to four-unit residential property, or (e) a
Cooperative Unit;
(xi) the Mortgage Rate;
(xii) the Servicing Fee Rate;
(xiii) the purpose for the Mortgage Loan;
(xiv) the type of documentation program pursuant to which the
Mortgage Loan was originated; and
(xv) whether the Mortgage Loan is a Mortgage 100(Service Mark) Loan
or Parent Power(Service Mark) Loan;
Such schedule shall also set forth the total of the amounts described under
(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.
Mortgaged Property: The underlying property securing a Mortgage
------------------
Loan, which, with respect to a Cooperative Loan, is the related Cooperative
Shares and Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
---------
MR Interest: The sole class of "residual interest" in the Master
-----------
REMIC.
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 the 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 Liquidation Proceeds allocable
to principal received during the calendar month preceding the month of such
Distribution Date with respect to such Mortgage Loan, and (f) all partial and
full 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 Non-Discount Mortgage Loan, 100%.
Nonrecoverable Advance: Any portion of an Advance or Servicer
----------------------
Advance previously made or proposed to be made by the Master Servicer or the
related Servicer, as the case may be, that, in the good faith judgment of the
Master Servicer or such 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 (i) 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) and (ii) the Class A-10 Certificates,
the Class Certificate Balance of the Class A-9 Certificates.
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.
Optional Termination: The termination of the trust created
--------------------
hereunder in connection with the purchase of the Mortgage Loans pursuant to
Section 9.01(a).
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 B-1 7.75%
Class B-2 3.55%
Class B-3 2.15%
Class B-4 1.25%
Class B-5 0.75%
Class B-6 0.50%
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.
Parent Power(Service Mark) Loan: A Mortgage Loan that has a Loan
-------------------------------
to-Value Ratio at origination in excess of 95.00% and that is supported by
Additional Collateral, and is designated a "Parent Power(Service Mark) Loan".
Pass-Through Rate: For any interest-bearing Class of Certificates,
-----------------
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 that 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 the Rating Agencies, as
evidenced by a signed writing delivered 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 the
Rating Agencies, as evidenced by a signed writing delivered 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 ratings then assigned to the Certificates by the Rating Agencies,
as evidenced by a signed writing delivered by each 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 acceptable to the Rating Agencies
at the time of the issuance of such agreements, as evidenced by a signed
writing delivered by each Rating Agency;
(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 ratings then assigned to
the Certificates by the Rating Agencies, 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 (i) if Fitch or Duff &
Phelps is a Rating Agency and has not rated the portfolio, the highest
rating assigned by Moody's and (ii) if S&P is a Rating Agency, "AAAm-G"
by S&P) 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 ratings then assigned to the
Certificates by the Rating Agencies, 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)(1) 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, or an
estate or trust whose income from sources without the United States is
includible in gross income for federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form 4224, 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 either 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 sub-
division 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, limited liability company, joint-stock company, trust, unincor-
porated organization or government, or any agency or political subdivision
thereof.
Physical Certificates: 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 allo-
cable 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 Liquidation Proceeds allocable
to principal received with respect to such Mortgage Loan during the calendar
month preceding the month of such Distribution Date with respect to such
Mortgage Loan and (f) all partial and full 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%.
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 Shortfall: As to any Distribution Date,
-----------------------------
Mortgage Loan and Principal Prepayment, the amount, if any, by which one
month's interest at the related Mortgage Rate (net of the related Master
Servicing Fee) on such Principal Prepayment exceeds the amount of interest
paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the calendar month
-----------------
preceding the month of such Distribution Date.
Prepayment Shift Percentage: As to any Distribution Date occurring
---------------------------
during the five years beginning on the first Distribution Date, 0%.
Thereafter, the Prepayment 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%.
Primary Insurance Policy: Each policy of primary mortgage guaranty
------------------------
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Principal Only Certificates: 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 sum of (i) the product of (A) Scheduled Principal Distribution Amounts
(B) the Senior Percentage and (C) the Priority Percentage, each as of such
Distribution Date and (ii) the product of (A) Unscheduled Principal
Distribution Amounts, (B) the Prepayment Shift Percentage, (C) the Senior
Prepayment Percentage and (D) the Priority Percentage, each as of such
Distribution Date.
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-8, Class A-11 and Class A-12 Certificates on such Distribution Date,
and the denominator of which is equal to the aggregate Class Certificate
Balances of all of the Senior Certificates (other than the Class PO
Certificates) on such Distribution Date.
Private Certificates: 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 Cooperative Shares.
Prospectus Supplement: The Prospectus Supplement dated April 28,
---------------------
1997 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 or purchased at the
option of the Master Servicer pursuant to Section 3.14, 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 appli-
cable 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- or FHLMC-approved mortgage insurer or
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 either 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.
References herein to a given rating or 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 applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.08.
--------------
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.
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: 7.75% 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).
------------------
SAIF: The Savings Association Insurance Fund, or any successor
----
thereto.
S&P: Standard & Poor's, a division of The McGraw-Hill Companies.
---
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.
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.
Scheduled Principal Distribution Amounts: As to any Distribution
----------------------------------------
Date, an amount equal to the sum of all amounts described in clauses (a)
through (d) 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 Scheduled Principal Distribution Amounts will
be reduced on the related Distribution Date by the applicable Non-PO
Percentage of the principal portion of such Bankruptcy Loss.
Securities Act: The Securities Act of 1933, as amended.
--------------
Security Agreement: With respect to any Cooperative Loan, the
------------------
agreement between the owner of the related Cooperative Shares and the
originator of the related Mortgage Note, which defines the terms of the
security interest in such Cooperative Shares and the related Proprietary
Lease.
Seller: Independent National Mortgage Corporation, a Delaware
------
corporation, and its successors and assigns, in its capacity as seller of the
Mortgage Loans to the Depositor.
Seller/Servicer Guide: The Seller/Servicer Guide for Independent
---------------------
National Mortgage Corporation's mortgage loan purchase and conduit servicing
program and all amendments and supplements thereto.
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 the
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 of the foregoing
Distribution Dates the Subordinated Percentage is less than the initial
Subordinated 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 if, as
of the first Distribution Date as to which any such decrease 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 Subordinated Certificates as of such date,
is equal to or greater than 50% or (ii) cumulative Realized Losses with
respect to the Mortgage Loans 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.
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
any 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 preceding calendar month, the Senior
Percentage of the applicable Non-PO 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 applicable Non-PO Percentage of the
principal portion of such Bankruptcy Loss.
Servicer: Any person with which the Master Servicer has entered
--------
into a Servicing Agreement for the servicing of all or a portion of the
Mortgage Loans pursuant to Section 3.02.
Servicer Advance: The meaning ascribed to such term in Section
----------------
3.08(d).
Servicing Account: The separate Eligible Account or Accounts
-----------------
created and maintained pursuant to Section 3.08(b).
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) expenses reimbursable to the Master Servicer pursuant to
Section 3.14 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 3.12.
Servicing Agreement: The Seller/Servicer Contract as contemplated
-------------------
by the Seller/Servicer Guide between the Master Servicer and any Servicer
relating to servicing and/or administration of certain Mortgage Loans as
provided in Section 3.02.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
-------------
an amount equal to one month's interest at the applicable Servicing Fee Rate
on the Stated Principal Balance of such Mortgage Loan.
Servicing Fee Rate: With respect to any Mortgage Loan, the per
------------------
annum rate set forth in the Mortgage Loan Schedule for such Mortgage Loan.
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.
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 3.10 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.
Special Hazard Loss Coverage Amount: With respect to the first
-----------------------------------
Distribution Date, $3,000,000. 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.
SR Interest: The sole class of "residual interest" in the
-----------
Subsidiary REMIC.
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.
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.
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 allocable to principal received with
respect to such Mortgage Loan after application of such amounts 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 which the Master Servicer has
-----------
contracted for the servicing of all or a portion of the Mortgage Loans
pursuant to Section 3.02.
Subsidiary REMIC: As described in the Preliminary Statement.
----------------
Subsidiary REMIC Interest: Any one of the Subsidiary REMIC Regular
-------------------------
Interests or the SR Interest.
Subsidiary REMIC Regular Interest: Any one of the "regular
---------------------------------
interests" in the Subsidiary REMIC described in the Preliminary Statement.
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
(net of the related Servicing Fee) 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 or be
supported by Additional Collateral if such Substitute Mortgage Loan has a
Loan-to-Value Ratio in excess of 95%; (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.
Substitution Adjustment Amount: The meaning ascribed to such term
------------------------------
pursuant to Section 2.03.
Targeted Balance: Not applicable.
----------------
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 Section 1.860F-4(d) and
temporary Treasury regulation Section 301.6231(a)(7)-1T. Initially, the Tax
Matters Person shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
------------------------------
Denomination of $1.00.
Transfer: Any direct or indirect transfer or sale of any Ownership
--------
Interest in a Residual Certificate.
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, other than such amounts which were
due on the Mortgage Loans on or before the Cut-off Date; (ii) the Certificate
Account and the Distribution Account and 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.
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.
Unscheduled Principal Distribution Amounts: As to any Distribution
------------------------------------------
Date, an amount equal to the sum of (i) with respect to each Mortgage Loan
that became a Liquidated Mortgage Loan during the calendar month preceding
the month of such Distribution Date, the Non-PO Percentage of the Liquidation
Proceeds allocable to principal received with respect to such Mortgage Loan
and (ii) the applicable Non-PO Percentage of the amount described in clause
(f) of the definition of "Non-PO Formula Principal Amount" for such
Distribution Date.
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.
Withdrawal Date: The 18th day of each month, or if such day is not
---------------
a Business Day, the next preceding Business Day.
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. 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 the first Distribution Account
Deposit Date an amount equal to one month's interest at the related Adjusted
Net Mortgage Rate on the Cut-off Date Principal Balance of such Mortgage
Loan. If the Seller shall fail to deposit such amount by the first
Distribution Account Deposit Date, the Trustee shall deposit such amount.
(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 for the benefit of the Certificateholders the following documents
or instruments with respect to each Mortgage Loan so assigned:
(i) 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
it to the Trustee (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);
(ii) except as provided below, the original recorded Mortgage
or a copy of such Mortgage certified by the Seller (or, in the case
of a Mortgage for which the related Mortgaged Property is located
in the Commonwealth of Puerto Rico, a copy of such Mortgage
certified by the applicable notary) 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; provided, further
-------- -------
that such assignment of Mortgage need not be delivered in the
case of a Mortgage for which the related Mortgage Property is
located in the Commonwealth of Puerto Rico.
(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 Cooperative 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 perfect the Seller's interest in the
Cooperative 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 Loan 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, later than 120 days following the Closing Date; provided,
--------
however, that 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 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.
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 record-
ing in the appropriate public office for real property records within thirty
(30) days after receipt thereof 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 assignment of
a 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 the receipt thereof, and 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 (including Puerto Rico) under the laws of which, as evidenced by
an Opinion of Counsel delivered by the Seller (at the Seller's expense) to
the Trustee, 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.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.
-----------------------------------------------
The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit G and declares
that it holds and will hold such documents and the other documents delivered
to it constituting the Mortgage Files, and that it holds or will hold such
other assets 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 G. 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.
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
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, 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 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 the Master Servicer.
- ------------------------------
(a) Indy Mac, 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 repre-
sentations 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 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 2.03; 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 substi
-------- -------
tution 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, if any, and 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 2.03 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 Mort-
gage 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 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 and Servicer Advances with respect to
such Deleted Mortgage Loans shall be deposited into 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 3.08 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 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), 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 and Repurchases.
- -----------------------------
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or 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 either REMIC hereunder 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.
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) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements
of the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor or the Trustee and prepared by the Master Servicer
pursuant to this Agreement will contain any untrue statement of a material
fact or omit to state a material fact necessary to make such information,
certificate, statement or report not misleading.
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 Servicers as provided in Section 3.02, 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 Certificate-holders 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 or Additional Collateral securing any
Mortgage Loan; provided that the Master Servicer shall not take, or permit
--------
any Servicer to take, any action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificate-holders 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 term of any Mortgage Loan
which would cause either REMIC 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 any Servicer or the Depositor and the Trustee, is
hereby authorized and empowered by the Depositor and the Trustee, when the
Master Servicer or the Servicer, as the case may be, 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.
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
3.09, and further as provided in Section 3.11. 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 Servicer pursuant to a Servicing 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. Each Servicer of a Mortgage Loan shall be entitled to receive and
retain, as provided in the related Servicing Agreement and in Section 3.17,
the related Servicing Fee from payments of interest received on such Mortgage
Loan after payment of all amounts required to be remitted to the Master
Servicer in respect of such Mortgage Loan. 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 Servicer on behalf of the Master Servicer. Each Servicing
Agreement will be based upon such terms and conditions as are generally
required or permitted by the Seller/Servicer Guide and are not inconsistent
with this Agreement and as the Master Servicer and the Servicer have agreed.
With the approval of the Master Servicer, a Servicer may delegate its
servicing obligations to third-party servicers, but such Servicer will remain
obligated under the related Servicing Agreement. The Master Servicer and
Servicer may enter into amendments to the related Servicing Agreement or a
different form of Servicing Agreement; provided, however, that any such
-------- -------
amendments or different forms shall be consistent with and not violate the
provisions of either this Agreement or the Seller/Servicer Guide in a manner
which would materially and adversely affect the interests of the
Certificateholders.
(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 Servicer regardless of whether
such payments are remitted by the Servicer to the Master Servicer.
(c) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
use its best reasonable efforts to enforce the obligations of each Servicer
under the related Servicing Agreement, to the extent that the non-performance
of any such obligation would have material and adverse effect on a Mortgage
Loan. Such enforcement, including, without limitation, the legal prosecution
of claims, termination of Servicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Master
Servicer shall pay the costs of such enforcement at its own expense, and
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement to the extent, if any, that such recovery exceeds all
amounts due in respect of the related Mortgage Loan or (ii) from a specific
recovery of costs, expenses or attorneys fees against the party against whom
such enforcement is directed.
SECTION 3.03. Successor Servicers.
-------------------
The Master Servicer shall be entitled to terminate any Servicing
Agreement that may exist in accordance with the terms and conditions of such
Servicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Servicing
- -------- -------
Agreement by the Master Servicer or the Servicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Servicing
Agreement with a successor Servicer which will be bound by the terms of the
related Servicing Agreement. If the Master Servicer or any affiliate of the
Master Servicer acts as servicer, it will not assume liability for the
representations and warranties of the Servicer which it replaces. If the
Master Servicer enters into a Servicing Agreement with a successor Servicer,
the Master Servicer shall use reasonable efforts to have the successor
Servicer assume liability for the representations and warranties made by the
terminated Servicer in respect of the related Mortgage Loans and, in the
event of any such assumption by the successor Servicer, the Master Servicer
may, in the exercise of its business judgment, release the terminated
Servicer from liability for such representations and warranties.
SECTION 3.04. Liability of the Master Servicer.
--------------------------------
Notwithstanding any Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or a Servicer or references to actions taken through a Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Trustee and Certificateholders for the servicing and administering of the
Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Servicing
Agreements or arrangements or by virtue of indemnification from the Servicer
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.
The Master Servicer shall be entitled to enter into any agreement with a
Servicer or Seller for indemnification of the Master Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between Servicers and
-------------------------------------------------
the Trustee.
- -----------
Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer
in its capacity as such and not as an originator shall be deemed to be
between the Servicer and the Master Servicer alone and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Servicer in its capacity as such except as set forth in Section 3.07.
SECTION 3.06. 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 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 3.07. 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 3.12 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 pursuant to Section 2.02 or 2.03,
(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.
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
Servicing Agreement. The Trustee or the successor servicer for the Trustee
shall be deemed to have assumed all of the Master Servicer's interest therein
and to have replaced the Master Servicer as a party to any Servicing
Agreement entered into by the Master Servicer as contemplated by Section 3.02
to the same extent as if the Servicing Agreement had been assigned to the
assuming party except that the Master Servicer shall not be relieved of any
liability or obligations under any such Servicing 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 Servicing Agreement or substitute servicing
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
Servicing Agreement to the assuming party.
SECTION 3.08. Collection of Mortgage Loan Payments; Servicing
-----------------------------------------------
Accounts; Collection Account; 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 120 days; provided, however, that the
-------- -------
Master Servicer cannot extend the maturity of any such Mortgage Loan 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) In those cases where a Servicer is servicing Mortgage Loans
pursuant to a Servicing Agreement, the Master Servicer shall cause the
Servicer, pursuant to the Servicing Agreement, to establish and maintain one
or more Servicing Accounts, each of which shall be an Eligible Account. The
Servicer will be required under its Servicing Agreement to deposit into the
Servicing Account on a daily basis no later than the Business Day following
receipt, all proceeds of Mortgage Loans received by the Servicer, less its
Servicing Fees and unreimbursed Servicer Advances and expenses, to the extent
permitted by the Servicing Agreement. The Servicer shall not be required to
deposit in the Servicing Account payments or collections in the nature of
prepayment charges or late charges.
(c) The Master Servicer shall establish and maintain a Collection
Account into which the Master Servicer shall deposit or cause to be deposited
on or before each Withdrawal Date payments, collections and Servicer Advances
remitted by Servicers in respect of the Mortgage Loans.
(d) On or before the Withdrawal Date in each calendar month, the
Master Servicer shall cause the Servicer, pursuant to the Servicing
Agreement, to remit to the Master Servicer for deposit in the Collection
Account all funds held in the Servicing Account with respect to each Mortgage
Loan serviced by such Servicer that are required to be remitted to the Master
Servicer. The Servicer will also be required, pursuant to the Servicing
Agreement, to advance on or before each such Withdrawal Date amounts equal to
any Scheduled Payments (net of its Servicing Fees with respect thereto) not
received on any Mortgage Loans by the Servicer (such amount, a "Servicer
Advance"). The Servicer's obligation to advance with respect to each
Mortgage Loan will continue up to and including the first day of the month
following the date on which the related Mortgaged Property is sold at a
foreclosure sale or is acquired by the Trust Fund by deed in lieu of
foreclosure or otherwise. All such Servicer Advances received by the Master
Servicer shall be deposited promptly by it in the Collection Account or the
Certificate Account, as appropriate.
Within five Business Days after the receipt by a Servicer of a
Principal Prepayment in Full or any Liquidation Proceeds or Insurance
Proceeds (not required to be applied to the restoration or repair of the
related Mortgaged Property), the Master Servicer shall cause such Servicer,
pursuant to the related Servicing Agreement, to remit such amounts to the
Master Servicer for deposit in the Collection Account.
(e) 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 Servicers 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 and the principal component
of any Servicer Advance;
(ii) all payments on account of interest on the Mortgage
Loans, net of the sum of the related Master Servicing Fee and
related Servicing Fee, and the interest component of any Servicer
Advance;
(iii) all Insurance Proceeds and Liquidation Proceeds (net of
any related expenses of the related Servicer), 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 3.08(g) in connection with any losses
on Permitted Investments;
(v) any amounts required to be deposited by the Master
Servicer pursuant to Sections 3.12 and 3.14;
(vi) all Purchase Prices from the Master Servicer or Seller
and 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 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
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 3.08. All funds deposited in the Certificate Account shall be held
in trust for the Certificateholders until withdrawn in accordance with
Section 3.11.
(f) 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 3.11(a);
(ii) any amount deposited by the Master Servicer pursuant to
Section 3.08(g) 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 3.11. In no event shall the Trustee
incur liability for withdrawals from the Distribution Account at the
direction of the Master Servicer.
(g) 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 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 3.08.
(h) 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 not later than 30 days and not more than
45 days 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 not later than 30
days and not more than 45 days prior to any change thereof.
SECTION 3.09. 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 cause each Servicer to
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 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 or any 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 or the related Servicer out of related
collections for any payments made pursuant to Sections 3.12 (with respect to
taxes and assessments and insurance premiums) and 3.13 (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. The Escrow Accounts shall not be
a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to in
Section 3.09(a) that are not timely paid by the Mortgagors or advanced by the
Servicers 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 3.10. Access to Certain Documentation and Information
-----------------------------------------------
Regarding the Mortgage Loans.
- ----------------------------
The Master Servicer shall afford, or shall cause the Servicers to
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, or will cause the Servicers to 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
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and any Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Master Servicer or
such Servicer in providing such reports and access.
SECTION 3.11. Permitted Withdrawals from the Certificate Account
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and the Distribution Account.
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(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 or the related Servicer
(to the extent not previously retained), the servicing compensation
to which it is entitled pursuant to Section 3.17, and to pay to the
Master Servicer, as additional master servicing compensation,
earnings on or investment income with respect to funds in or
credited to the Certificate Account;
(ii) to reimburse the Master Servicer or the related
Servicer for unreimbursed Advances or Servicer 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 or Servicer 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 3.09 and (b) for
unpaid Master Servicing Fees as provided in Section 3.14;
(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 3.14, 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;
(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, to the extent on deposit,
and remit such amount to the Trustee for deposit in the Distri-
bution Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01.
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
Loan(s) and their respective portions of such Nonrecoverable Advance.
(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.
SECTION 3.12. 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. To the extent it may do so
without breaching the related Servicing Agreement, the Master Servicer shall
replace any Servicer that does not cause such insurance, to the extent it is
available, to be maintained. 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 or the related
Servicing Account, as applicable. Any cost incurred by the Master Servicer
or any 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 3.11. 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 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.
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 3.12, 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 3.12, 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 Certificate-holders, claims under any
such blanket policy.
(b) The Master Servicer shall not take, or permit any Servicer to
take, any action which would result in non-coverage under any applicable
Primary Insurance Policy of any loss which, but for the actions of the Master
Servicer or any 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 Certif-
icates 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. The Master Servicer shall not be
required to maintain any Primary Insurance Policy 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. 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.
In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present, or cause the related
Servicer to present, on behalf of itself, the Trustee and the
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 a Servicer or the Master
Servicer under any Primary Insurance Policies shall be deposited in the
Servicing Account, the Collection Account or the Certificate Account, as
applicable.
SECTION 3.13. Enforcement of Due-On-Sale Clauses; Assumption
----------------------------------------------
Agreements.
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(a) Except as otherwise provided in this Section 3.13, when any
property subject to a Mortgage has been conveyed by the Mortgagor, the Master
Servicer or the related 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, neither the Master Servicer nor the
related Servicer is 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 (i) the Master Servicer or the related Servicer
is prohibited by law from enforcing any such due-on-sale clause, (ii)
coverage under any Required Insurance Policy would be adversely affected,
(iii) the Mortgage Note does not include a due-on-sale clause or (iv)
nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.13(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
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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 3.13(b), is also authorized with the prior
approval of the insurers under any Required Insurance Policies to enter into
a substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted
as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Master Servicer shall not be deemed to be in default under
this Section 3.13 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 3.13(a), in any case in
which a Mortgaged Property has been conveyed to a Person by a Mortgagor, and
such Person is to enter into an assumption agreement or modification
agreement or supplement to the Mortgage Note or Mortgage that requires the
signature of the Trustee, or if an instrument of release signed by the
Trustee is required releasing the Mortgagor from liability on the Mortgage
Loan, the Master Servicer shall prepare and deliver or cause to be prepared
and delivered to the Trustee for signature and shall direct, in writing, the
Trustee to execute the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding
assumptions or the transfer of the Mortgaged Property to such Person. In
connection with any such assumption, no material term of the Mortgage Note
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, or cause the related Servicer to 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 or any Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional master servicing compensation.
SECTION 3.14. 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
provided that (i) the Master Servicer shall not proceed with respect to such
Additional Collateral in any manner that would impair the ability to recover
against the related Mortgaged Property, and (ii) the Master Servicer shall
proceed with respect to any REO Property in a manner that preserves the
ability to apply the proceeds of such Additional Collateral against amounts
owed under the defaulted Mortgage Loan. Any proceeds realized from such
Additional Collateral (other than amounts to be released to the Mortgagor or
the related guarantor in accordance with procedures that the Master Servicer
would follow in servicing loans held for its own account, subject to the
terms and conditions of the related Mortgage and Mortgage Note and to the
terms and conditions of any security agreement, guarantee agreement, mortgage
or other agreement governing the disposition of the proceeds of such
Additional Collateral) shall be deposited in the Collection Account, subject
to withdrawal pursuant to Section 3.08. Any other payment received by the
Master Servicer in respect of such Additional Collateral shall be deposited
in the Collection Account subject to withdrawal pursuant to Section 3.08. In
connection with such foreclosure or other conversion, the Master Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable, as shall be normal and usual in its general mortgage servicing
activities and as shall meet the requirements of the insurer under any
Required Insurance Policy; provided, however, that the
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Servicer may enter into, and shall give the Rating Agencies notice of, a
special servicing agreement with an unaffiliated holder of 100% Percentage
Interest of one or more Classes of Subordinated Certificates or a holder of a
class of securities representing interests in one or more Classes of
Subordinated Certificates and provided, further, that entering into such
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special servicing agreement shall not result in the downgrading or withdrawal
of the respective ratings when assigned to the Certificates. Any such
agreement may contain provisions whereby such holder may instruct the
Servicer to commence or delay foreclosure proceedings with respect to
delinquent Mortgage Loans and will contain provisions for the deposit of cash
by the holder that would be available for distribution to Certificateholders
if Liquidation Proceeds are less than they otherwise may have been had the
Servicer acted in accordance with its normal procedures. Notwithstanding the
foregoing, 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 Mort-
gaged Property, consider such risks and only take action in accordance with
its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the Certificate-
holders, 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 hereunder. 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, if 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" on either REMIC as defined in section 860F of the Code or cause
either REMIC 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 either REMIC to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under Section
860G(c) of the Code or otherwise, unless the Master Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of
any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of
bringing such a proceeding. The income earned from the management of any 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, Servicing Fees, Advances,
Servicer 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
adjustments, if applicable, to the Mortgage Rate were being made in
accordance with the terms of the Mortgage Note) 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 or the related Servicer
for any related unreimbursed Servicing Advances, Master Servicing Fees and
Servicing Fees, as applicable; second, to reimburse the Master Servicer or
the related Servicer for any unreimbursed Advances or Servicer Advances, as
applicable, and to reimburse the Certificate Account for any Nonrecoverable
Advances (or portions thereof) that were previously withdrawn by the Master
Servicer pursuant to Section 3.11(a)(iii) that related to such Mortgage Loan;
third, to accrued and unpaid interest (to the extent no Advance or Servicer
Advance has been made for such amount or any such Advance or Servicer 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 fourth, 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 3.17.
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 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 3.15. 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 cancella-
tion 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 or, at the Master Servicer's
direction, to the related 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 remedies or rights provided by the Mortgage Note or the
Mortgage or otherwise available at law or in equity.
SECTION 3.16. Documents, Records and Funds in Possession of the
-------------------------------------------------
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 Servicing
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 3.17. Servicing Compensation.
----------------------
As compensation for its activities hereunder, the Master Servicer
shall be entitled out of each payment of interest on a Mortgage Loan (or
portion thereof) included in the Trust Fund to retain or withdraw from the
Certificate Account an amount equal to the Master Servicing Fee for such
Distribution Date.
Additional master servicing compensation in the form of Excess
Proceeds, 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 pursuant to Section 3.08. The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
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.
As compensation for is activities under its Servicing Agreement,
each Servicer shall be entitled to retain out of each payment of interest on
a Mortgage Loan (or portion thereof) included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
Additional servicing compensation in the form of prepayment
penalties, assumption fees and late payment charges shall be retained by the
Servicers to the extent not required to be deposited in the Servicing
Accounts pursuant to the related Servicing Agreement. Each Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities under its Servicing Agreement (including payment of any premium
for hazard insurance and any Primary Insurance Policy and maintenance of the
other forms of insurance coverage required by this Agreement and its
Servicing Agreement) and shall not be entitled to reimbursement therefor
except as specifically provided in its Servicing Agreement and not
inconsistent with this Agreement.
In the event of any Prepayment Interest Shortfall, the aggregate
Master Servicing Fee for such Distribution Date shall be reduced (but not
below zero) by an amount equal to such Prepayment Interest Shortfall.
SECTION 3.18. 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 3.18 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 or any Servicer to provide access as provided
in this Section 3.18 as a result of such obligation shall not constitute a
breach of this Section 3.18.
SECTION 3.19. 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 1997 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, (ii) to the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Servicer has fulfilled all its obligations under
its Servicing 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 3.20. Annual Independent Public Accountants' Servicing
------------------------------------------------
Statement; Financial Statements.
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On or before 120 days after the end of the Master Servicer's fiscal
year, commencing with its 1997 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 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 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 that such statement is delivered by the Master Servicer to
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the Trustee.
SECTION 3.21. Errors and Omissions Insurance; Fidelity Bonds.
----------------------------------------------
The Master Servicer shall obtain and maintain in force, and shall
cause each Servicer to 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 or as Servicer under its Servicing
Agreement, as the case may be, 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.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances.
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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 4.01 as provided in Section 3.11. 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 inform the Trustee of the amount of the Advance to be made on each
Master Servicer Advance Date no later than the second Business Day before the
related Distribution Date.
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) 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 pro
rata 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;
(ii) (Reserved for distribution of Accrual Amount, if any.)
(iii) to each Class of Senior Certificates concurrently as
follows:
(w) 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;
(x) 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 principal to
the following Classes of Senior Certificates, in the following
order of priority:
(1) concurrently, 33.327486406% of the Priority
Amount to the Class A-8 Certificates and 66.672513594% of
the Priority Amount to the Class A-11 Certificates, until
the Class Certificate Balance of the Class A-11
Certificates has been reduced to zero;
(2) concurrently, 33.327486406% of the Priority
Amount to the Class A-8 Certificates and 66.672513594% of
the Priority Amount to the Class A-12 Certificates, until
the Class Certificate Balances thereof have been reduced
to zero;
(3) to the Class A-R Certificates until the Class
Certificate Balance thereof has been reduced to zero;
(4) concurrently, 63.636363636% to the Class A-1
Certificates and 36.363636364% to the Class A-9
Certificates, until the Class Certificate Balance of the
Class A-1 Certificates has been reduced to zero;
(5) concurrently, 71.428571429% to the Class A-2
Certificates and 28.571428571% to the Class A-9
Certificates, until the Class Certificate Balance of the
Class A-2 Certificates has been reduced to zero;
(6) concurrently, 77.777777778% to the Class A-3
Certificates and 22.222222222% to the Class A-9
Certificates, until the Class Certificate Balance of the
Class A-3 Certificates has been reduced to zero;
(7) concurrently, 79.545454545% to the Class A-4
Certificates and 20.454545455% to the Class A-9
Certificates, until the Class Certificate Balance of the
Class A-4 Certificates has been reduced to zero;
(8) concurrently, 89.743589744% to the Class A-5
Certificates and 10.256410256% to the Class A-9
Certificates, until the Class Certificate Balance of the
Class A-5 Certificates has been reduced to zero;
(9) concurrently, 92.105263158% to the Class A-6
Certificates and 7.894736842% to the Class A-9
Certificates, until the Class Certificate Balances
thereof have been reduced to zero;
(10) to the Class A-7, until the Class Certificate
Balance thereof has been reduced to zero;
(11) concurrently, 33.327486406% to the Class A-8
Certificates and 66.672513594% to the Class A-11
Certificates, until the Class Certificate Balance of the
Class A-11 Certificates has been reduced to zero; and
(12) concurrently, 33.327486406% to the Class A-8
Certificates and 66.672513594% to the Class A-12
Certificates, until the Class Certificate Balances
thereof have been reduced to zero;
(iv) 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) and then from (iii)
of the definition of Subordinated Principal Distribution Amount);
(v) to each Class of Subordinated Certificates, subject to
paragraph (e) below, in the following order of priority:
(A) 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;
(B) 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;
(C) 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;
(D) 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;
(E) to the Class B-3 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-3 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-4 Certificates, an amount allocable
to interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(H) 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 is reduced to
zero;
(I) 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;
(J) 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;
(K) to the Class B-6 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-6 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; and
(vi) to the Class A-R Certificates, in respect of the MR
Interest, any remaining funds in the Master REMIC and in respect of
the SR Interest, any remaining funds in the Subsidiary REMIC.
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 (a)(iii) 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 for allocation of Accrual Amount, if any.)
(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)(iii)(x), the portion of Available Funds available to be
distributed to the Senior Certificates specified in such Section will be
distributed among such Classes, pro rata, on the basis of their respective
Class Certificate Balances (prior to making any distributions on such
Distribution Date) and 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 such
Distribution Date for each Class of Certificates shall be reduced by (i) the
related Class' pro rata share (based on the Class Optimal Interest
Distribution Amount for each Class before reduction pursuant to this Section
4.02(d)) of 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 Loss 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), 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 the 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
set forth in Section 4.02(a)(v).
(f) On each Distribution Date, Available Funds shall be applied to
distributions on the Subsidiary REMIC Regular Interests, in each case in an
amount sufficient to make the distributions on the respective Corresponding
Classes of Certificates on such Distribution Date in accordance with the
provisions of Section 4.02(a).
SECTION 4.03. (Reserved)
SECTION 4.04. (Reserved)
SECTION 4.05. 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.
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) (A) 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, until the respective Class Certificate Balance of each
such Class is reduced to zero and second, to the Senior Certificates (other
than the Class A-10, Class PO and Class X Certificates), pro rata, on
the basis of their respective Class Certificate Balances in each case
immediately prior to the related Distribution Date until the respective
Class Certificate Balance of each such Class is reduced to zero;
(B) the applicable Non-PO Percentage of any Excess Losses
shall be allocated to the Senior Certificates (other than the Class
PO Certificates) and the Subordinated Certificates then
outstanding, pro rata, on the basis of their respective Class
Certificate Balances until the Class Certificate Balances thereof
have been reduced to zero.
(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 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 4.05(b) 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 4.05(b) 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 4.06. Monthly Statements to Certificate-
----------------------------------
holders.
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(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;
(vii) the amount of the Master Servicing Fees and Servicing
Fees paid to or retained by the Master Servicer and the Servicers
(with respect to the Servicers, in the aggregate) 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) for each of the preceding 12 calendar months, or all
calendar months since the Cut-off Date, whichever is less, the
aggregate dollar amount of the Scheduled Payments (A) due on all
Outstanding Mortgage Loans on each of the Due Dates in each such
month and (B) delinquent 60 days or more on each of the Due Dates
in each such month;
(xii) 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;
(xiii) 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;
(xiv) the Senior Prepayment Percentage for the following
Distribution Date;
(xv) the aggregate amount of Realized Losses incurred during
the preceding calendar month and aggregate Realized Losses through
such Distribution Date; and
(xvi) 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.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer.
The Trustee will send a copy of each statement provided pursuant to this
Section 4.06 to each Rating Agency.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at
any time during the calendar year was a Certificate-holder, 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 (1) to 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
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 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 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.
SECTION 4.08. Determination of Pass-Through Rates for LIBOR
---------------------------------------------
Certificates.
- ------------
On each Interest Determination Date so long as the LIBOR
Certificates are outstanding, 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 to
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.
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, the Initial LIBOR Rate.
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.
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 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 4.08.
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.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
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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 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 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 any
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
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Exchange of Certificates.
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(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for
the Trust Fund in which, subject to the provisions of subsections (b) and (c)
below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for
registration of transfer of any Certificate, the Trustee shall 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 Certificate-
holder 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 form 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
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 or a Residual 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 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, or (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 under-
taken 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 or a Residual Certificate, in the event the
representation letter referred to in the preceding sentence is not 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 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 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 either 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 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 registra-
tion, 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
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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 hold
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 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.
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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.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the
-----------------------------------------------
Master Servicer.
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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
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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
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
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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 the 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, 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.
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 (other than
a payment required to be made under Section 4.01) 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 shall continue unremedied for a period of 60 days after the
date on which written notice of such failure shall have been given
to the Master Servicer by the Trustee or the Depositor, or to the
Master Servicer and the Trustee by the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the
Certificates; 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 assignment
for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or
(vi) so long as the Master Servicer is the Seller, any failure
by the Seller to observe or perform in any material respect any
other of the covenants or agreements on the part of the Seller
contained in this Agreement, which failure shall continue
unremedied for a period of 60 days after the date on which written
notice of such failure shall have been given to the Seller by the
Trustee or the Depositor, or to the Seller and the Trustee by the
Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
(vii) any failure of the Master Servicer to make any Advance in
the manner and at the time required to be made pursuant to Section
4.01 which continues unremedied for a period of one Business Day
after the date of such failure.
If an Event of Default described in clauses (i) to (vi) of this
Section 7.01 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 25% 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. If an Event of Default
described in clause (vii) shall occur, the Trustee shall, by notice in
writing to the Master Servicer and the Depositor, 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 thereupon make any
Advance described in clause (vii) subject to Section 3.04. 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 3.11(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, the Trustee shall, subject to and to
the extent provided in Section 3.07, 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 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, 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 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, which is willing to service the
Mortgage Loans and which executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, containing 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 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; provided that each Rating Agency acknowledges
--------
that its rating of the Certificates in effect immediately prior to such
assignment and delegation will not be qualified or reduced, as a result of
such assignment and delegation. 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 3.07, 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.
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 Certificate-holders notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the 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 authori-
ties 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 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);
(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 countersignature 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) 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 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 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 the Trustee.
----------------------------------------
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with
a credit rating 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) as
evidenced in writing by each Rating Agency. 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. 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 Seller, the Depositor
- -------
or the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
SECTION 8.07. Resignation and Removal of the 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, 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 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 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 shall be delivered to
the Trustee, one copy 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 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.
SECTION 8.08. Successor Trustee.
-----------------
Any successor trustee appointed as provided in Section 8.07 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 provisions of Section 8.06 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 the 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 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 Certificate-holders,
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 Certificate-holders 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 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.
SECTION 8.11. Tax Matters.
-----------
It is intended that the assets with respect to which any REMIC
election pertaining to the Trust Fund 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 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 an election 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 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 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 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 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
such REMIC, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of such
REMIC, and otherwise act on behalf of 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 such 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 or the Seller, in the case of any such minimum tax, 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 or (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 3.11(b).
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 CWMBS, 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.
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, aggre-
gating 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 Certificate-holder. 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 Certificate-
holders 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 not later than the 10th day of the 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 speci-
fied. The Master Servicer will give such notice to each Rating Agency at the
time such notice is given to Certificateholders.
In the event such notice is given, the Master Servicer shall cause
all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the
Trust Fund and the receipt by the Trustee of a Request for Release therefor,
the Trustee shall promptly release to the Master Servicer the Mortgage Files
for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in
each case on the final Distribution Date and in the order set forth in
Section 4.02, in the case of the Certificateholders, 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 allocated to such Certificate 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) In 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 the Master REMIC or the Subsidiary REMIC as defined in
Section 860F of the Code, or (ii) cause the Master REMIC or the Subsidiary
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(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, the Tax Matters Person or the Trust Fund), 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 each 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.
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 to cure any ambiguity, or to correct or supplement any
provisions herein, or to make such other provisions with respect to matters
or questions arising under this Agreement as shall not be inconsistent with
any other provisions herein; provided that such action 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 no
-------- -------
such Opinion of Counsel shall be required 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 maintain the qualification of any REMIC as a REMIC under the Code
or to 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, 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 maintain such qualification or to avoid or minimize the risk of
the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer 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 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 10.01 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 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
(i) of the Mortgage Loans by the Seller to the Depositor and (ii) of the
Trust Fund by the Depositor to the Trustee each be, and be construed as, an
absolute sale thereof. It is, further, not the intention of the parties that
such conveyances be deemed a pledge thereof. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Seller or Depositor, as the case may be, or if for any other
reason this Agreement is held or deemed to create a security interest in
either 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 conveyances provided for in this Agreement shall be
deemed to be an assignment and a grant (i) by the Seller to the Depositor or
(ii) by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Seller and 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
Certificateholders.
SECTION 10.05. Notices.
-------
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which
it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
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 4.06;
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, CWMBS, Inc., 155 North Lake Avenue, Pasadena,
California 91101, Attention: David A. Spector, (b) in the case of the Master
Servicer, Independent National Mortgage Corporation, 35 North Lake Avenue,
Pasadena, California 91101, Attention: Michael W. Perry 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 1997-D, or such other address as the Trustee may
hereafter furnish to the Depositor or Master Servicer; and (d) in the case of
each 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.
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.
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 Certificate-holders 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.
* * * * * *
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.
CWMBS, INC.
as Depositor
By:
--------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------------
Name:
Title:
INDEPENDENT NATIONAL MORTGAGE
CORPORATION,
as Seller and Master Servicer
By:
--------------------------------
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
(Delivered at Closing to Trustee)
SCHEDULE II
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1997-D
Representations and Warranties of the Seller/Master Servicer
------------------------------------------------------------
Independent National Mortgage Corporation ("Indy Mac") 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 Indy Mac, as seller and master servicer,
CWMBS, Inc., as depositor, and The Bank of New York, as trustee.
(1) Indy Mac is duly organized as a Delaware corporation and
is validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Indy Mac 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) Indy Mac 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 Indy Mac 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 Indy Mac, enforceable against
Indy Mac in accordance with its terms, except that (a) the enforce-
ability 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 Indy Mac, the sale and servicing of the Mortgage Loans by
Indy Mac 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 compliance with the terms thereof
are in the ordinary course of business of Indy Mac and will not (A)
result in a material breach of any term or provision of the charter or
by-laws of Indy Mac 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 Indy Mac is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to Indy Mac of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Indy Mac; and Indy
Mac 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 Indy Mac's ability to perform or meet any of its
obligations under the Pooling and Servicing Agreement.
(4) Each Servicer is an approved servicer of conventional
mortgage loans for FNMA or FHLMC or 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 Indy Mac's
knowledge, threatened against Indy Mac that would materially and
adversely affect the execution, delivery or enforceability of the
Pooling and Servicing Agreement or the ability of Indy Mac 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 Indy Mac of, or compliance by Indy Mac 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, Indy Mac has obtained the same.
(7) Indy Mac intends to treat the transfer of the Mortgage
Loans to the Depositor as a sale for all tax, accounting and regulatory
purposes.
SCHEDULE III
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1997-D
Representations and Warranties as to the Mortgage Loans
-------------------------------------------------------
Independent National Mortgage Corporation ("Indy Mac") 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 Indy Mac, as seller and master servicer,
CWMBS, 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) Except for the one Additional Collateral Loan,
representing approximately 0.04% of the Cut-off Date Pool Principal
Balance, all of the Mortgage Loans had a Loan-to-Value Ratio at
origination of 95% or less.
(4) With respect to any Mortgage Loan that is not a
Cooperative Loan, each Mortgage is a valid and enforceable first lien on
the Mortgaged Property subject only to (a) the lien of nondelinquent
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.
(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 is 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 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 indebted-
ness 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, 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 under-
writing 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.
(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) Except for seven Mortgage Loans, 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 original
principal balance of the related Mortgage Loan at least equal to the
product of the original principal balance thereof and a fraction, the
numerator of which is the excess of the original principal balance of
the related Mortgage Loan over 75% of the lesser of the appraised value
and selling price of the related Mortgaged Property and the denominator
of which is the original principal balance of the related Mortgage Loan,
plus accrued interest thereon and related foreclosure expenses. Each
such Primary Insurance Policy is issued by a Qualified Insurer
acceptable to each of the Rating Agencies. 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 the Mortgagor thereunder to maintain such insurance and to pay
all premiums and charges in connection therewith. 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 pending or threatened for the total or partial condemnation
of any Mortgaged Property, nor is such a proceeding currently occurring.
(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.
(32) Other than with respect to Mortgaged Property underlying
a Cooperative Loan, 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 mobile homes and does not constitute other than real
property under state law.
(33) Each Mortgage Loan is being serviced by the Master
Servicer or a Servicer as provided in Section 3.02 of the Pooling and
Servicing Agreement.
(34) There is no obligation on the part of the Seller or any
other party under the terms of the Mortgage or related Mortgage Note to
make payments in addition to those made by the Mortgagor.
(35) 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.
(36) There are no defaults in complying with the terms of the
Mortgage, and 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 install-
ment of principal and interest, including without limitation taxes and
insurance payments, the Seller 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.
(37) Each Mortgage Loan was underwritten in all material
respects in accordance with the Seller's underwriting guidelines as set
forth in the Prospectus Supplement.
(38) 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 or FHLMC.
(39) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan; none of the Mortgage
Loans are subject to buydown or similar arrangements.
(40) 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.
(41) All but ________ of the Mortgage Loans have a payment
date on or before the Due Date in the month of the first Distribution
Date.
(42) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
(43) No more than 0.40% (by aggregate Stated Principal
Balance) of the Mortgage Loans are Cooperative Loans.
(44) Each Cooperative Loan is secured by a valid, subsisting
and enforceable perfected first lien and security interest in the
related Mortgaged Property, subject only to (i) the rights of the
Cooperative Corporation to collect Maintenance and assessments from the
Mortgagor, (ii) the lien of the Blanket Mortgage, if any, on the
Cooperative Property and of real property taxes, water and sewer
charges, rents and assessments on the Cooperative Property not yet due
and payable, and (iii) other matters to which like Cooperative Units are
commonly subject which do not materially interfere with the benefits of
the security intended to be provided by the Security Agreement or the
use, enjoyment, value or marketability of the Cooperative Unit. Each
original UCC financing statement, continuation statement or other
governmental filing or recordation necessary to create or preserve the
perfection and priority of the first priority lien and security interest
in the Cooperative Shares and Proprietary Lease has been timely and
properly made. Any security agreement, chattel mortgage or equivalent
document related to the Cooperative Loan and delivered to the Sponsor or
its designee establishes in the Seller a valid and subsisting perfected
first lien on and security interest in the property described therein,
and the Seller has full right to sell and assign the same.
(45) Each Cooperative Corporation qualifies as a "cooperative
housing corporation" as defined in Section 216 of the Code.
SCHEDULE IV
Planned Balance Schedules
(Not applicable)
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 THE 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 AUTHO-
RIZED 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 :
CWMBS, 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
CWMBS, 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 CWMBS, 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, Independent National Mortgage Corporation, 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.
* * *
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
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 THE 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 AUTHO-
RIZED 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 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, IF
SUCH TRANSFEROR IS AN INSURANCE COMPANY, A REPRESENTATION IN ACCORDANCE WITH
THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN, 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.
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates
of this Class : $
CWMBS, 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
CWMBS, 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 the denominations 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
CWMBS, 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, Independent National Mortgage
Corporation, 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.
(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.
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
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.
Certificate No. :
Cut-off Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWMBS, 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
CWMBS, 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 the
denominations 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 CWMBS, 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, Independent National Mortgage Corporation, 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.
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.
* * *
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
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.)
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 :
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 199_-_
evidencing the distributions allocable to the Class X 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
CWMBS, 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 CWMBS, 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, Independent
National Mortgage Corporation, 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.
* * *
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
EXHIBIT E
(Form of Reverse of Certificates)
CWMBS, INC.
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as CWMBS, 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 Certificate-
holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced 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 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 Cer-
tificate. 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 Cut-off Date Pool Principal Balance, 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.
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.
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
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.
EXHIBIT F
(RESERVED)
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(date)
(Depositor)
(Master Servicer)
(Seller)
_____________________
_____________________
Re: Pooling and Servicing Agreement among CWMBS, Inc., as
Depositor, Independent National Mortgage Corporation, as
Seller and Master Servicer, and The Bank of New York, as
Trustee, Mortgage Pass-Through Certificates,
Series 199 -
--------------------------------------------
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 listed in the attached
schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the following
form: "Pay to the order of ________, without recourse"; 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: ________________________
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
(date)
(Depositor)
(Master Servicer)
(Seller)
_____________________
_____________________
Re: Pooling and Servicing Agreement among CWMBS, Inc., as
Depositor, Independent National Mortgage Corporation, as
Seller and Master Servicer, and The Bank of New York, as
Trustee, Mortgage
Pass-Through Certificates, Series 199 -
--------------------------------------------------------------
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; 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, 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.
(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. Notwithstanding anything herein to the contrary, the Trustee
has made no determination and makes no representations 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 sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.
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: ________________________
EXHIBIT I
TRANSFER AFFIDAVIT
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 199_-_
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 CWMBS,
Inc., as depositor (the "Depositor"), Independent National Mortgage
Corporation, 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 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.
* * *
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__.
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 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 "Inter-
national 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.
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 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.
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 199__
CWMBS, Inc.
155 North Lake Avenue
Pasadena, CA 91101
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12W
New York, NY 10286
Attention: Mortgage-Backed
Securities Group Series 199 -
Re: CWMBS, Inc. Mortgage Pass-Through Certificates,
Series 199 -_, 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
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
__________, 199__
CWMBS, Inc.
155 North Lake Avenue
Pasadena, CA 91101
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12W
New York, NY 10286
Attention: Mortgage-Backed
Securities Group Series 199 -
Re: CWMBS, Inc. Mortgage Pass-Through Certificates,
Series 199 - , 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) 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, (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 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
EXHIBIT L
FORM OF RULE 144A LETTER
____________, 199__
CWMBS, Inc.
155 North Lake Avenue
Pasadena, CA 91101
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12W
New York, NY 10286
Attention: Mortgage-Backed
Securities Group Series 199 -
Re: CWMBS, Inc. Mortgage Pass-Through Certificates,
Series 199 - , 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) 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 using the assets of any such plan or
arrangement to effect such acquisition, (e) we have not, nor has anyone
acting on our behalf offered, transferred, pledged, sold or otherwise
disposed of the Certificates, any interest in the Certificates or any other
similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or taken any other action, that would constitute a distribution of the
Certificates under the Securities Act or that would render the disposition of
the Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed 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.
ANNEX 1 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
- --------------------
/F1/ Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that
case, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities.
(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 $ _______________ /F1/ 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.
___ 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 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: ____________________________
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 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 understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on
Rule 144A. In addition, the Buyer will only purchase for the Buyer's own
account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
------------------------------
Print Name of Buyer or Adviser
By: __________________________
Name:
Title:
IF AN ADVISER:
------------------------------
Print Name of Buyer
Date: _________________________
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 199_-_
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, Independent National Mortgage
Corporation, as Seller and Master Servicer and CWMBS, 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 ____________, 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.
INDEPENDENT NATIONAL MORTGAGE
CORPORATION
By ___________________________
Its __________________________
Date: _____________, 19__
EXHIBIT N
REQUEST FOR RELEASE OF DOCUMENTS
To: The Bank of New York Attn: Mortgage Custody
Services
Re: The Pooling & Servicing Agreement dated among Countrywide
Home Loans, Inc., as Seller and as Master Servicer, CWMBS, 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 CWMBS, 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 (INMC hereby certifies that all amounts
have been received.)
_______2. Mortgage Loan Liquidated (INMC hereby certifies that all proceeds
of foreclosure, insurance, or other liquidation have been finally
received.)
_______3. Mortgage Loan in Foreclosure.
_______4. Other (explain): ____________________________________
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 an 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.
INDEPENDENT NATIONAL MORTGAGE 35 North Lake Ave.- MS 8-13
CORPORATION Pasadena, CA 91101
By:________________________
Name:______________________
Title:____________________
Date:______________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By:________________________
Name:______________________
Title:____________________
Date:______________________
