______________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported): November 1, 1996
CWMBS, INC. (as depositor under the Pooling and
Servicing Agreement, dated as of November 1, 1996,
providing for the issuance of the CWMBS, INC.,
Residential Asset Securitization Trust 1996-A9,
Mortgage Pass-Through Certificates, Series 1996-M).
CWMBS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-08389 95-4449516
---------------------------- ------------ ------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
155 North Lake Avenue
Pasadena, California 91101
--------------------- ----------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (818) 304-5591
----- --------
_____________________________________________________________________
Item 5. Other Events.
------ ------------
On November 1, 1996, CWMBS, Inc. (the "Company") entered into a
Pooling and Servicing Agreement dated as of November 1, 1996 (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 1996-M (the "Certificates"). The Pooling and
Servicing Agreement is annexed hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial
---- -----------------------------------------
Information and Exhibits.
------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99.1. Pooling and Servicing Agreement, dated as of November 1,
1996, 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
-------------------------
David A. Spector
Vice President
Dated: December 2, 1996
Exhibit Index
-------------
Exhibit Page
------- ----
99.1. Pooling and Servicing Agreement,
dated as of November 1, 1996, by
and among, the Company, INMC
and the Trustee 5
EXHIBIT 99.1
------------
EXECUTION COPY
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 November 1, 1996
______________________________________
RESIDENTIAL ASSET
SECURITIZATION TRUST 1996-A9
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1996-M
TABLE OF CONTENTS
-----------------
Page
----
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-4
Class Interest Shortfall . . . . . . . . . . . . . . . . . . . . . . I-4
Class Optimal Interest Distribution Amount . . . . . . . . . . . . . I-5
Class PO Deferred Amount . . . . . . . . . . . . . . . . . . . . . . I-5
Class Subordination Percentage . . . . . . . . . . . . . . . . . . . I-5
Class Unpaid Interest Amounts . . . . . . . . . . . . . . . . . . . . I-5
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
COFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
COFI Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Component Balance . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Component Certificates . . . . . . . . . . . . . . . . . . . . . . . I-6
Cooperative Corporation . . . . . . . . . . . . . . . . . . . . . . . I-6
Coop Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Cooperative Loan . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Cooperative Property . . . . . . . . . . . . . . . . . . . . . . . . I-6
Cooperative Unit . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . I-6
Cut-off Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Cut-off Date Pool Principal Balance . . . . . . . . . . . . . . . . . I-6
Cut-off Date Principal Balance . . . . . . . . . . . . . . . . . . . I-6
Debt Service Reduction . . . . . . . . . . . . . . . . . . . . . . . I-6
Debt Service Reduction Mortgage Loan . . . . . . . . . . . . . . . . I-7
Defective Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-7
Deficient Valuation . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . I-7
Delay Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Deleted Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . I-7
Denomination . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Depository Participant . . . . . . . . . . . . . . . . . . . . . . . I-7
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Discount Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-8
Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . I-8
Distribution Account Deposit Date . . . . . . . . . . . . . . . . . . I-8
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Due Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Duff & Phelps . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Eligible Account . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
ERISA-Restricted Certificate . . . . . . . . . . . . . . . . . . . . I-9
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Excess Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Excess Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Expense Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Expense Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
FHLMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
FIRREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Fitch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
FNMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Fraud Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Fraud Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Fraud Loss Coverage Amount . . . . . . . . . . . . . . . . . . . . . I-10
Fraud Loss Coverage Termination Date . . . . . . . . . . . . . . . . I-10
Indirect Participant . . . . . . . . . . . . . . . . . . . . . . . . I-10
Initial Bankruptcy Loss Coverage Amount . . . . . . . . . . . . . . . I-10
Initial Component Balance . . . . . . . . . . . . . . . . . . . . . . I-11
Initial LIBOR Rate . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Insured Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Interest Accrual Period . . . . . . . . . . . . . . . . . . . . . . . I-11
Interest Determination Date . . . . . . . . . . . . . . . . . . . . . I-11
Last Scheduled Distribution Date . . . . . . . . . . . . . . . . . . I-11
Latest Possible Maturity Date . . . . . . . . . . . . . . . . . . . . I-11
LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
LIBOR Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Liquidated Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . I-12
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . I-12
Loan-to-Value Ratio . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Majority in Interest . . . . . . . . . . . . . . . . . . . . . . . . I-12
Master REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Master Servicer Advance Date . . . . . . . . . . . . . . . . . . . . I-12
Master Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . I-12
Master Servicing Fee Rate . . . . . . . . . . . . . . . . . . . . . . I-13
Monthly Statement . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Mortgage File . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Mortgage Loan Schedule . . . . . . . . . . . . . . . . . . . . . . . I-13
Mortgage Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Mortgage Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Mortgaged Property . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Mortgagor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
MR Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Net Prepayment Interest Shortfalls . . . . . . . . . . . . . . . . . I-14
Non-Delay Certificates . . . . . . . . . . . . . . . . . . . . . . . I-14
Non-Discount Mortgage Loan . . . . . . . . . . . . . . . . . . . . . I-15
Non-PO Formula Principal Amount . . . . . . . . . . . . . . . . . . . I-15
Non-PO Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Nonrecoverable Advance . . . . . . . . . . . . . . . . . . . . . . . I-15
Notice of Final Distribution . . . . . . . . . . . . . . . . . . . . I-15
Notional Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
Notional Amount Certificates . . . . . . . . . . . . . . . . . . . . I-16
Offered Certificates . . . . . . . . . . . . . . . . . . . . . . . . I-16
Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . I-16
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . I-16
Optional Termination . . . . . . . . . . . . . . . . . . . . . . . . I-16
Original Applicable Credit Support Percentage . . . . . . . . . . . . I-16
Original Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-16
Original Subordinated Principal Balance . . . . . . . . . . . . . . . I-16
OTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16
Outside Reference Date . . . . . . . . . . . . . . . . . . . . . . . I-17
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Outstanding Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . I-17
Ownership Interest . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Pass-Through Rate . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Percentage Interest . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . I-17
Permitted Transferee . . . . . . . . . . . . . . . . . . . . . . . . I-19
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Physical Certificates . . . . . . . . . . . . . . . . . . . . . . . . I-20
Planned Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . I-20
Planned Principal Classes . . . . . . . . . . . . . . . . . . . . . . I-20
PO Formula Principal Amount . . . . . . . . . . . . . . . . . . . . . I-20
PO Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-20
Pool Stated Principal Balance . . . . . . . . . . . . . . . . . . . . I-20
Prepayment Interest Shortfall . . . . . . . . . . . . . . . . . . . . I-20
Prepayment Period . . . . . . . . . . . . . . . . . . . . . . . . . . I-20
Primary Insurance Policy . . . . . . . . . . . . . . . . . . . . . . I-21
Principal Only Certificates . . . . . . . . . . . . . . . . . . . . . I-21
Principal Prepayment . . . . . . . . . . . . . . . . . . . . . . . . I-21
Principal Prepayment in Full . . . . . . . . . . . . . . . . . . . . I-21
Private Certificates . . . . . . . . . . . . . . . . . . . . . . . . I-21
Pro Rata Share . . . . . . . . . . . . . . . . . . . . . . . . . . . I-21
Proprietary Lease . . . . . . . . . . . . . . . . . . . . . . . . . . I-21
Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . . . I-21
PUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-21
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . I-21
Qualified Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . I-22
Rating Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-22
Realized Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-22
Recognition Agreement . . . . . . . . . . . . . . . . . . . . . . . . I-22
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Reference Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Refinancing Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . I-23
Regular Certificates . . . . . . . . . . . . . . . . . . . . . . . . I-23
Relief Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Relief Act Reductions . . . . . . . . . . . . . . . . . . . . . . . . I-23
REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
REMIC Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . I-23
REMIC Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
REO Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Request for Release . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Required Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
Required Insurance Policy . . . . . . . . . . . . . . . . . . . . . . I-23
Residual Certificates . . . . . . . . . . . . . . . . . . . . . . . . I-24
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Restricted Classes . . . . . . . . . . . . . . . . . . . . . . . . . I-24
SAIF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
S&P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Scheduled Balances . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Scheduled Classes . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Scheduled Payment . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Segregated Senior Principal Distribution Amount . . . . . . . . . . . I-24
Segregated Senior Pro Rata Principal Distribution Amount . . . . . . I-25
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Seller/Servicer Guide . . . . . . . . . . . . . . . . . . . . . . . . I-25
Senior Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Senior Credit Support Depletion Date . . . . . . . . . . . . . . . . I-25
Senior Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Senior Prepayment Percentage . . . . . . . . . . . . . . . . . . . . I-26
Senior Principal Distribution Amount . . . . . . . . . . . . . . . . I-26
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Servicer Advance . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Servicing Account . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Servicing Advances . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Servicing Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Servicing Officer . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
Special Hazard Coverage Termination Date . . . . . . . . . . . . . . I-27
Special Hazard Loss . . . . . . . . . . . . . . . . . . . . . . . . . I-28
Special Hazard Loss Coverage Amount . . . . . . . . . . . . . . . . . I-28
Special Hazard Mortgage Loan . . . . . . . . . . . . . . . . . . . . I-29
SR Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Startup Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-29
Stated Principal Balance . . . . . . . . . . . . . . . . . . . . . . I-29
Subordinated Certificates . . . . . . . . . . . . . . . . . . . . . . I-29
Subordinated Percentage . . . . . . . . . . . . . . . . . . . . . . . I-29
Subordinated Prepayment Percentage . . . . . . . . . . . . . . . . . I-29
Subordinated Principal Distribution Amount . . . . . . . . . . . . . I-29
Subservicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-30
Subsidiary REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . I-30
Subsidiary REMIC Interest . . . . . . . . . . . . . . . . . . . . . . I-30
Subsidiary REMIC Regular Interest . . . . . . . . . . . . . . . . . . I-30
Substitute Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . I-30
Substitution Adjustment Amount . . . . . . . . . . . . . . . . . . . I-30
Targeted Balance . . . . . . . . . . . . . . . . . . . . . . . . . . I-30
Targeted Principal Classes . . . . . . . . . . . . . . . . . . . . . I-30
Tax Matters Person . . . . . . . . . . . . . . . . . . . . . . . . . I-30
Tax Matters Person Certificate . . . . . . . . . . . . . . . . . . . I-31
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Trustee Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Trustee Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
Withdrawal Date . . . . . . . . . . . . . . . . . . . . . . . . . . . I-31
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-8
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-5
SECTION 4.04. (Reserved) . . . . . . . . . . . . . . . . . . . . . . IV-6
SECTION 4.05. Allocation of Realized Losses . . . . . . . . . . . . IV-6
SECTION 4.06. Monthly Statements to Certificate-
holders . . . . . . . . . . . . . . . . . . . . . IV-7
SECTION 4.07. Determination of Pass-Through Rates for COFI
Certificates . . . . . . . . . . . . . . . . . . . . . IV-9
SECTION 4.08. Determination of Pass-Through Rates for LIBOR
Certificates . . . . . . . . . . . . . . . . . . . . IV-11
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 . . . . . . . . . . . . . IX-1
SECTION 9.01. Termination upon Liquidation or Purchase of all
Mortgage Loans . . . . . . . . . . . . . . . . . . . . IX-1
SECTION 9.02. Final Distribution on the Certificates . . . . . . . . IX-1
SECTION 9.03. Additional Termination Requirements . . . . . . . . . IX-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 November 1,
1996, 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 Certif-
icates, 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 $101,246,970.00 7.50% $25,000 $1,000
Class A-2 $5,250,000.00 6.15% $25,000 $1,000
Class A-3 $26,968,030.00 (1) $25,000 $1,000
Class A-4 (3) (1) $25,000(5) $1,000(5)
Class A-5 $3,304,000.00 7.75% $25,000 $1,000
Class A-6 $12,289,000.00 7.75% $25,000 $1,000
Class A-7 $2,963,000.00 7.75% $25,000 $1,000
Class A-8 $4,811,000.00 7.75% $25,000 $1,000
Class A-9 $24,189,418.00 7.75% $25,000 $1,000
Class PO $1,051.00 (2) $25,000 $1,000
Class X (3) (4) $25,000(5) $1,000(5)
Class A-R $ 100.00 7.75% $100 N/A
Class B-1 $7,935,236.00 7.75% $25,000 $1,000
Class B-2 $3,967,618.00 7.75% $25,000 $1,000
Class B-3 $2,479,761.00 7.75% $25,000 $1,000
Class B-4 $1,289,475.00 7.75% $100,000 $1,000
Class B-5 $495,952.00 7.75% $100,000 $1,000
Class B-6 $1,190,287.00 7.75% $100,000 $1,000
</TABLE>
----------------------------
(1) The Class A-3 and Class A-4 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 Calculation of Pass-
Initial Pass-Through Maximum/Minimum Pass-Through Through Rate
Class Rate Rate
<S> <C> <C> <C>
A-3 5.9375% 9.00%/0.50% LIBOR + 0.50 basis points
A-4 3.0625% 8.50%/0.00% 8.50% - LIBOR
</TABLE>
(2) The Class PO Certificates will be Principal Only Certificates and
will not bear interest.
(3) The Class A-4 and Class X Certificates will be Notional Amount
Certificates, will have no principal balance and will bear interest
on
their respective Notional Amounts (initially $26,968,030.00 and
$198,380,901.00, respectively).
(4) 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 0.96% per
annum.
(5) The minimum denomination is based on the Notional Amount.
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>
<CAPTION> Corresponding Class of Certificates(1)
Subsidiary REMIC Initial Principal Allocation Allocation
Interest Balance Interest Rate of Principal of Interest
-------- ------- ------------- ------------ -----------
<S> <C> <C> <C> <C>
1 $101,246,970.00 7.50% A-1 A-1
2 $5,250,000.00 6.15% A-2 A-2
3 $26,968,030.00 9.00% A-3 A-3, A-4
4 $26,968,030.00 7.75% A-5 A-5
5 $3,304,000.00 7.75% A-6 A-6
6 $12,289,000.00 7.75% A-7 A-7
7 $2,963,000.00 7.75% A-8 A-8
8 $4,811,000.00 7.75% A-9 A-9
9 $7,935,236.00 7.75% B-1 B-1
10 $3,967,618.00 7.75% B-2 B-2
11 $2,479,761.00 7.75% B-3 B-3
12 $1,289,745.00 7.75% B-4 B-4
13 $495,952.00 7.75% B-5 B-5
14 $1,190,287.00 7.75% B-6 B-6
15 (2) (3) -- X
16 $ 100 % M-R(4) M-R(4)
SR (5) (5) 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) The Notional Amount of a Subsidiary REMIC Interest 15 with respect to
any Distribution Date will be equal to the Notional Amount of the
Class X Certificates with respect to such Distribution Date.
(3) The Interest Rate for Subsidiary REMIC Interest 15 for any
Distribution Date will be equal to the Pass-Through Rate applicable
to the Class X Certificates with respect to such Distribution Date.
(4) The beneficial ownership of the MR Interest and the SR Interest is
represented by the Class A-R Certificates.
(5) 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 All Classes of Certificates other than the
Certificates 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, if any.
ERISA-Restricted
Certificates Class PO Certificates, Class X Certificates,
Residual Certificates and Subordinated Certificates.
Floating Rate Class A-3 Certificates.
Certificates
Inverse Floating Rate
Certificates Class A-4 Certificates.
LIBOR Certificates Class A-3 and Class A-4 Certificates.
Non-Delay Certificates Class A-3 and Class A-4 Certificates.
Notional Amount Class A-4 and Class X Certificates.
Certificates
Offered Certificates All Classes of Certificates other than the
Private Certificates.
Physical Certificates Class A-R, Class B-1, Class B-2 and Private
Certificates.
Planned Principal None.
Classes
Primary Planned
Principal Classes None.
Principal Only Class PO Certificates.
Certificates
Private Certificates Class B-4, Class B-5 and Class B-6 Certifi-
cates.
Rating Agencies Moody's, Duff & Phelps and Fitch.
Regular Certificates All Classes of Certificates other than the
Class A-R Certificates.
Residual Certificates Class A-R Certificates.
Scheduled Principal None.
Classes
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 PO, Class X and Class A-R Certificates.
Subordinated Class B-1, Class B-2, Class B-3, Class
Certificates B-4, Class B-5 and Class B-6
Certificates.
Targeted Principal None.
Classes
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)(iii).
Accrual Certificates: As specified in the Preliminary Statement.
--------------------
Accrual Termination Date: Not applicable.
------------------------
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)(ii).
Amount Held for Future Distribution: As to any Distribution Date,
-----------------------------------
the aggregate amount held in the Certificate Account at the close of
business on the related Determination Date on account of (i) Principal
Prepayments 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 1996-M".
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 Certificate 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: November 27, 1996.
------------
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.
Coop Shares: Shares issued by a Cooperative Corporation.
-----------
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and
----------------
a Proprietary Lease.
Cooperative Property: The real property and improvements owned
--------------------
by the Cooperative Corporation, including the allocation of individual
dwelling units to the holders of the Coop Shares of the Cooperative
Corporation.
Cooperative Unit: A single family dwelling located in a
----------------
Cooperative Property.
Corporate Trust Office: The designated office of the Trustee in
----------------------
the State of New York at which at any particular time its corporate trust
business with respect to this Agreement shall be administered, which
office at the date of the execution of this Agreement is located at 101
Barclay Street, 12E, New York, New York 10286 (Attn: Mortgage-Backed
Securities Group, CWMBS,
Inc. Series 1996-M), 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: November 1, 1996.
------------
Cut-off Date Pool Principal Balance: $198,380,901.
-----------------------------------
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 1996-M". 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 December
1996.
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, $3,967,615.96
--------------------------
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 (or, in the case of the first
such anniversary, as of the Cut-off Date) over the cumulative amount of
Fraud Losses allocated to the Certificates since such preceding
anniversary or the Cut-off Date, as the case may be; 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 Interests 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 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; and
(xiv) the type of documentation program pursuant to which the
Mortgage Loan was originated.
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 Coop
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-4 Certificates,
the Class Certificate Balance of the Class A-3 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 8.75%
Class B-2 4.75%
Class B-3 2.75%
Class B-4 1.50%
Class B-5 0.85%
Class B-6 0.60%
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.
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 Owner-
ship Interest in a Residual Certificate to such Person may cause the REMIC
hereunder to fail to qualify as a REMIC at any time that the Certificates
are outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the
Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political 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,
unincorporated 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 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 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.
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.
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 Coop Shares.
Prospectus Supplement: The Prospectus Supplement dated November
---------------------
27, 1996 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 applicable Mortgage Rate (or at the applicable Adjusted
Mortgage Rate if (x) the purchaser is the Master Servicer or (y) if the
purchaser is the Seller and the Seller is the Master Servicer) from the
date through which interest was last paid by the Mortgagor to the Due Date
in the month in which the Purchase Price is to be distributed to
Certificateholders.
Qualified Insurer: A mortgage guaranty insurance company duly
-----------------
qualified as such under the laws of the state of its principal place of
business and each state having jurisdiction over such insurer in
connection with the insurance policy issued by such insurer, duly
authorized and licensed in such states to transact a mortgage guaranty
insurance business in such states and to write the insurance provided by
the insurance policy issued by it, approved as a FNMA- 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 Ratings Group, 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 Ratings Group, 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.
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 Coop Shares and the originator
of the related Mortgage Note, which defines the terms of the security
interest in such Coop Shares and the related Proprietary Lease.
Segregated Senior Principal Distribution Amount: For any
-----------------------------------------------
Distribution Date, an amount equal to (a) zero with respect to any
Distribution Date occurring prior to the fifth anniversary of the first
Distribution Date; (b) 30% of the Segregated Senior Pro Rata Principal
Distribution Amount for any Distribution Date occurring after the fifth
anniversary of the first Distribution Date and prior to the sixth
anniversary of the first Distribution Date; (c) 40% of the Segregated
Senior Pro Rata Principal distribution Amount for any Distribution Date
occurring after the sixth anniversary of the first Distribution Date and
prior to the seventh anniversary of the first Distribution Date; (d) 60%
of the Segregated Senior Pro Rata Principal Distribution Amount for any
Distribution Date occurring after the seventh anniversary of
the first Distribution Date and prior to the eighth anniversary of the
first Distribution Date; (e) 80% of the Segregated Senior Pro Rata
Principal Distribution Amount for any Distribution Date occurring after
the eighth anniversary of the first Distribution Date and prior to the
ninth anniversary of the first Distribution Date; and (f) 100% of the
Segregated Senior Pro Rata Principal Distribution Amount for any
Distribution Date thereafter. Notwithstanding the foregoing, if on any
Distribution Date the Class Certificate Balances of the Senior
Certificates (other the Class PO, Class A-8 and Class A-9 Certificates)
have been reduced to zero, any portion of the Senior Principal
Distribution Amount not otherwise distributed to the Senior Certificates
pursuant to Section 4.02(a)(iv)(y)(2) through (5) shall be distributed to
the Class A-8 and Class A-9 Certificates pursuant to Section
4.02(a)(iv)(y)(1) (without regard to the Segregated Senior Principal
Distribution Amount), and thereafter the Segregated Senior Principal
Distribution Amount shall equal the Senior Principal Distribution Amount.
Segregated Senior Pro Rata Principal Distribution Amount: For any
--------------------------------------------------------
Distribution Date, an amount equal to the product of (a) the Senior
Principal Distribution Amount for such Distribution Date and (b) a
fraction, the numerator of which is the sum of the Class Certificate
Balances of the Class A-8 and Class A-9 Certificates and the denominator
of which is the aggregate of the Class Certificate Balances of the Senior
Certificates (other than the Class PO Certificates) for such Distribution
Date.
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 Senior Percentage exceeds the initial
Senior Percentage, in which case the Senior Prepayment Percentage for such
Distribution Date will once again equal 100%). Notwithstanding the
foregoing, no decrease in the Senior Prepayment Percentage will occur 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 Subordinate
Certificates (averaged over the preceding six month period), 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 each Mortgage Loan that became a Liquidated Mortgage Loan
during the calendar month preceding the month of such Distribution Date,
the lesser of (x) the Senior Percentage of the applicable Non-PO
Percentage of the Stated Principal Balance of such Mortgage Loan and (y)
either (A) the Senior Prepayment Percentage or (B) if an Excess Loss was
sustained with respect to such Liquidated Mortgage Loan during such
preceding calendar month, the Senior Percentage of the applicable
Non-PO Percentage 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.
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, $1,998,725. 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 pre-
ceding 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; (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.
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 Trustee acknowledges the deposit into
the Distribution Account on the Closing Date, of 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.
(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 accor-
dance 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 assuranceor substitution agreement, if any;
(v) except as provided below, the original or duplicate
original lender's title policy and all riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of
the following documents or instruments:
(a) The Coop Shares, together with a stock power in blank;
(b) The executed Security Agreement;
(c) The executed Proprietary Lease;
(d) The executed Recognition Agreement;
(e) The executed assignment of Recognition Agreement;
(f) The executed UCC-1 financing statement with evidence
of recording thereon which have been filed in all
places required to perfect the Seller's interest in
the Coop Shares and the Proprietary Lease; and
(g) Executed UCC-3 financing statements or other
appropriate UCC financing statements required by state
law, evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation).
In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) the original recorded Mortgage, (b) all
interim recorded assignments or (c) the lender's title policy (together
with all riders thereto) satisfying the requirements of clause (ii), (iii)
or (v) above, respectively, concurrently with the execution and delivery
hereof because such document or documents have not been returned from the
applicable public recording office in the case of clause (ii) or (iii)
above, or because the title policy has not been delivered to either the
Master Servicer or the Depositor by the applicable title insurer in the
case of clause (v) above, the Depositor shall promptly deliver to the
Trustee, in the case of clause (ii) or (iii) above, such original Mortgage
or such interim assignment, as the case may be, with evidence of recording
indicated thereon upon receipt thereof from the public recording office,
or a copy thereof, certified, if appropriate, by the relevant recording
office, but in no event shall any such delivery of the original Mortgage
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 recording 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
representations and warranties set forth in Schedule III hereto, and by
this reference incorporated herein, to the Depositor and the Trustee, as
of the Closing Date, or if so specified therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made pursuant to Section 2.03(b) that
materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, the party discovering 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 substitution pursuant to (i) above shall not be effected prior
to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05, 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 Certifi-
cateholders the Mortgage Note, the Mortgage, the related assignment of the
Mortgage, and such other documents and agreements as are required by
Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.01. No substitution is permitted to be made in any
calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Substitute Mortgage Loans in the month of
substitution shall not be part of the Trust Fund and will be retained by
the Seller on the next succeeding Distribution Date. For the month of
substitution, distributions to Certificateholders will include the monthly
payment due on any Deleted Mortgage Loan for such month and thereafter the
Seller shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan.
The Master Servicer shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such
Deleted Mortgage Loan and the substitution of the Substitute Mortgage Loan
or Loans and the Master Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Substitute Mortgage
Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to
such Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to
Section 2.03(b) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Certificate Account of the 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 theaggregate 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 Certificate-
holders, 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 Certificateholders and the
Trustee, customary consents or waivers and other instruments and docu-
ments, (ii) to consent to transfers of any Mortgaged Property and
assumptions of the Mortgage Notes and related Mortgages (but only in the
manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan; provided that
--------
the Master Servicer shall not take, or permit any Servicer to take, any
action that is inconsistent with or prejudices the interests of the Trust
Fund or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor, the Trustee and the Certificateholders under
this Agreement. The Master Servicer shall represent and protect the
interests of the Trust Fund in the same manner as it protects its own
interests in mortgage loans in its own portfolio in any claim, proceeding
or litigation regarding a Mortgage Loan and shall not make or permit any
modification, waiver or amendment of any 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
--------
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 and the Distribution Account.
------------------------------------
(a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:
(i) to pay to the Master Servicer 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
Distribution 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 Mort-
gagor 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
Certificateholders, 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 Certificates and is required to be kept in force hereunder
unless the replacement Primary Insurance Policy for such canceled or non-
renewed policy is maintained with a Qualified Insurer. 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 Certif-
icate Account, as applicable.
SECTION 3.13. Enforcement of Due-On-Sale Clauses; Assumption
----------------------------------------------
Agreements.
----------
(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 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. 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 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 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 Mortgaged Property, consider
such risks and only take action in accordance with its established
environmental review procedures.
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or 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 instru-
ments 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 cancellation thereon. Expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the related Mortgagor. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan,
including for such purpose collection under any policy of flood insurance,
any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the
Mortgage or any of the other documents included in the Mortgage File, the
Trustee shall, upon delivery to the Trustee of a Request for Release in
the form of Exhibit M signed by a Servicing Officer, release the Mortgage
File to the Master Servicer 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 1996 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.
-------------------------------
On or before 120 days after the end of the Master Servicer's
fiscal year, commencing with its 1996 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 Attestation
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 Audit 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 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.
--------
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) (Reserved for payment of bond insurance premiums, if
any)
(ii) to each interest-bearing Class of Senior Certificates,
an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being
allocated among such Classes in proportion to the amount of the
Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall;
(iii) (Reserved for distribution of Accrual Amount, if any.)
(iv) to each Class of Senior Certificates concurrently as
follows:
(x) to the Class PO Certificates, an amount allocable
to principal equal to the PO Formula Principal Amount, up
to the outstanding Class Certificate Balance of the Class
PO Certificates;
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date, the Non-PO Formula Principal
Amount, up to the amount of the Senior Principal
Distribution Amount for such Distribution Date, will be
distributed as principal to the following Classes of Senior
Certificates, in the following order of priority:
(1) an amount up to the Segregated Senior
Distribution Amount, sequentially, to the Class A-8
and the Class A-9 Certificates, in that order, until
the respective Class Certificate Balances thereof have
been reduced to zero;
(2) to the Class A-R Certificates until the
Class Certificate Balance thereof has been reduced to
zero;
(3) concurrently, 75.19746972% to the Class A-1
Certificates, 4.28232552% to the Class A-2
Certificates and 20.52020475% to the Class A-3
Certificates until the Class Certificate Balance of
the Class A-2 Certificates has been reduced to zero;
(4) concurrently, 83.33753043% to the Class A-1
Certificates and 16.66246957% to the Class A-3
Certificates, until the Class Certificate Balances
thereof have been reduced to zero; and
(5) sequentially, to the Class A-5, Class A-6
and Class A-7 Certificates, in that order, until the
respective Class Certificate Balances thereof have
been reduced to zero;
(v) to the Class PO Certificates, any Class PO Deferred
Amount, up to an amount not to exceed the amount calculated
pursuant to clause (A) of the definition of the Subordinated
Principal Distribution Amount actually received or advanced for
such Distribution Date (with such amount to be allocated
first from amounts calculated pursuant to (A)(i) and (ii) and
then from (A)(iii) of the definition of Subordinated Principal
Distribution Amount);
(vi) to each Class of Subordinated Certificates, subject to
paragraph (e) below, in the following order of priority:
(A) to the Class 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
(vii) 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)(iv) 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)(iv)(y), 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)(vi).
(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 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 or, 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.
-------
(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 Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii) and
(a)(vii) of this Section 4.06 aggregated for such calendar year or
applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code
as from time to time in effect.
SECTION 4.07. Determination of Pass-Through Rates for COFI
--------------------------------------------
Certificates.
------------
The Pass-Through Rate for each Class of COFI Certificates for
each Interest Accrual Period after the initial Interest Accrual Period
shall be determined by the Trustee as provided below on the basis of the
Index and the applicable formulae appearing in footnotes corresponding to
the COFI Certificates in (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.
----------------
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 Certifi-
cateholder 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 Exchange of Certificates.
----------------------------
(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 trans-
fers and exchanges of Certificates as herein provided. Upon surrender for
registration of transfer of any Certificate, the Trustee shall execute and
deliver, in the name of the designated transferee or transferees, one or
more new Certificates of the same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest upon
surrender of the Certificates to be exchanged at the office or agency of
the Trustee. Whenever any Certificates are so surrendered for exchange,
the Trustee shall execute, authenticate, and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of transfer or exchange of Certificates, but payment of a
sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates may be
required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is
exempt from the registration requirements under said Act and such state
securities laws. In the event that a transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the
Certificateholder desiring to effect such transfer and such
Certificateholder's prospective transferee shall each certify to the
Trustee in writing the facts surrounding the transfer in substantially the
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 undertaken in this Agreement
or to any liability. For purposes of the preceding sentence, with respect
to an ERISA-Restricted Certificate that is not a Private Certificate 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 registration, the Trustee shall issue the Definitive
Certificates. Neither the Master Servicer, the Depositor nor the Trustee
shall be liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in relying on, such
instructions. The Master Servicer shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer
of Definitive Certificates. Upon the issuance of Definitive Certificates
all references herein to obligations imposed upon or to be performed by
the Depository shall be deemed to be imposed upon and performed by the
Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder; provided that the
--------
Trustee shall not by virtue of its assumption of such obligations become
liable to any party for any act or failure to act of the Depository.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Trustee,
or the Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate and (b) there is delivered to the Master
Servicer and the Trustee such security or indemnity as may be required by
them to 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.
---------
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.
---------------
The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
-----------------------------------------------
Master Servicer.
---------------
The Depositor and the Master Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the
laws of the United States or under the laws of one of the states thereof
and will each obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement, or any of the Mortgage Loans and to perform its respective
duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may
be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a
party, or any person succeeding to the business of the Depositor or the
Master Servicer, shall be the successor of the Depositor or the Master
Servicer, as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that
-------- -------
the successor or surviving Person to the Master Servicer shall be
qualified to sell mortgage loans to, and to service mortgage loans on
behalf of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the
---------------------------------------------
Seller, the Master Servicer and Others.
--------------------------------------
None of the Depositor, the Seller, the Master Servicer or any of
the directors, officers, employees or agents of the Depositor, the Seller
or the Master Servicer shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
-------- -------
Depositor, the Seller, the Master Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Seller, the Master Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. The
Depositor, the Seller, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Seller or the Master Servicer may
rely in good faith on any document of any kind prima facie properly
----- -----
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, the Seller, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Seller or the Master Servicer
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy
or judicial proceeding relating to a governmental taxing authority or
any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor,
the Seller or the Master Servicer shall be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to
its respective duties hereunder and which in its opinion may involve it
in any expense or liability; provided, however, that any of the Depositor,
-------- -------
the Seller or the Master Servicer may in its discretion undertake any
such action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of
the Trustee and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Depositor, the Seller and the Master Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account.
SECTION 6.04. Limitation on Resignation of 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 Certificateholders
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 authorities respecting any matters
arising hereunder;
(ii) the Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be finally
proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Holders of
Certificates evidencing not less than 25% of the Voting Rights
of Certificates relating to the time, method and place of
conducting any proceeding for any remedy 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 Certificateholders, such title to the Trust Fund or any part thereof,
whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If
the Master Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request to do so, or in the case an
Event of Default shall have occurred and be continuing, the Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.06 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) To the extent necessary to effectuate the purposes of
this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee, except for the obligation
of the Trustee under this Agreement to advance funds on behalf
of 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, aggregating
less than ten percent of the aggregate Cut-off Date Principal Balance of
the Mortgage Loans.
SECTION 9.02. Final Distribution on the Certificates.
--------------------------------------
If on any Determination Date, the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets
in the Trust Fund other than the funds in the Certificate Account, the
Master Servicer shall direct the Trustee promptly to send a final
distribution notice to each Certificateholder. If the Master Servicer
elects to terminate the Trust Fund pursuant to clause (a) of Section 9.01,
at least 20 days prior to the date notice is to be mailed to the affected
Certificateholders the Master Servicer shall notify the Depositor and the
Trustee of the date the Master Servicer intends to terminate the Trust
Fund and of the applicable repurchase price of the Mortgage Loans and REO
Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall
be given promptly by the Trustee by letter to Certificateholders mailed
not earlier than the 15th day and 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 Certifi-
cates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Master Servicer will
give such notice to each Rating Agency at the time such notice is given to
Certificateholders.
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 on
the final Distribution Date and in the order set forth in Section 4.02, 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 Certificate
holders 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 Certifi-
cateholders 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 1996-M, 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 1996-M
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 enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of the Pooling and
Servicing Agreement by Indy Mac, the sale and servicing of the Mort-
gage 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 viola-
tion of any material indenture or other material agreement or instru-
ment, 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 1996-M
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) No Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95%.
(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 indebtedness secured by the insured Mortgage,
as to the first priority lien of the Mortgage subject to the exceptions
set forth in paragraph (4) above; to the best of the Seller's knowledge,
no claims have been made under such mortgage title insurance policy
and no prior holder of the related Mortgage, including the Seller,
has done, by act or omission, anything which would impair the coverage
of such mortgage title insurance policy.
(13) Each Mortgage Loan was originated (within the meaning
of Section 3(a)(41) of the Securities Exchange Act of 1934, as
amended) by an entity that satisfied at the time of origination the
requirements of Section 3(a)(41) of the Securities Exchange Act of
1934, as amended.
(14) To the best of the Seller's knowledge, all of the
improvements which were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(15) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
(16) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms and under
applicable law. To the best of the Seller's knowledge, all parties
to the Mortgage Note and the Mortgage had legal capacity to execute
the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed by such parties.
(17) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor
have been complied with. All costs, fees and expenses incurred in
making, or closing or recording the Mortgage Loans were paid.
(18) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including, (i) in the case
of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure.
(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 substan-
tially 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 8 Mortgage Loans representing approximately
0.577% of the Cut-off Date Pool Principal Balance, 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 out
standing 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 installment 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 appli-
cation, 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 is 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 four 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 0.19% (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 Coop 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 AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.)
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates
of this Class : $
CUSIP :
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 firstliens 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 AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.)
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN
CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
(THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING
THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER
THE CODE TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS
----------- , 199_. THE INITIAL PER ANNUM RATE OF INTEREST ON THIS
CERTIFICATE IS ____%. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN
ASSUMED RATE OF PREPAYMENT OF ____% PER ANNUM (THE "PREPAYMENT ASSUMPTION"),
THIS CERTIFICATE HAS BEEN ISSUED WITH $__________ OF OID PER $1,000 OF
THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE; THE ANNUAL YIELD TO
MATURITY OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING THE ACCRUAL OF OID
IS APPROXIMATELY _________% (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE
TO THE SHORT FIRST ACCRUAL PERIOD IS $_________ PER $1,000 OF THE
ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE COMPUTED USING THE MONTHLY
YIELD AND DAILY COMPOUNDING DURING THE SHORT ACCRUAL PERIOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE. THE ACTUAL YIELD
TO MATURITY MAY DIFFER FROM THAT SET FORTH ABOVE, AND THE ACCRUAL OF OID
WILL BE ADJUSTED, IN ACCORDANCE WITH SECTION 1272(a)(6) OF THE CODE, TO TAKE
INTO ACCOUNT EVENTS WHICH HAVE OCCURRED DURING ANY ACCRUAL PERIOD. THE
PREPAYMENT 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 ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, OR, IF SUCH PURCHASER 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.
Residential Asset Securitization Trust 199_-_
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 firstliens 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 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 ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, OR, IF SUCH PURCHASER 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 :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWMBS, INC.
Residential Asset Securitization Trust 199_-_
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 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 (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, (ii) if the purchaser is an insurance company, a representation
that the purchaser is an insurance company which is purchasing such
Certificate with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificate 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 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 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 this Class
A-R Certificate and by a beneficial owner's acceptance of its interest in
such Certificate.) 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.
Residential Asset Securitization Trust 199_-_
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 mortgage 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
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to
any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby,
and the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to
the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement. The Record Date applicable to each Distribution Date is the
last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least
five Business Days prior to the related Record Date and such
Certificateholder shall satisfy the conditions to receive such form of
payment set forth in the Agreement, or, if not, by check mailed by first
class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be
made in like manner, but only upon presentment and surrender of such
Certificate at the Corporate Trust Office or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of
the Trustee and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer and the Trustee with the
consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent
of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in New York, New York, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Seller and the Trustee and
any agent of the Depositor or the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, nor any such agent shall be
affected by any notice to the contrary.
On any Distribution Date on which the Pool Stated Principal Balance
is less than 10% of the 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
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________________
___________________________________________________________________________,
___________________________________________________________________________,
for the account of ________________________________________________________,
account number ________________ , or, if mailed by check, to _____________
___________________________________________________________________________.
Applicable statements should be mailed to _________________________________
___________________________________________________________________________,
___________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ______________________________________________,
as its agent.
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
"International Organization" shall have the meanings set forth in Code
Section 7701 or successor provisions. A corporation will not be treated
as an instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and, with
the exception of the FHLMC, a majority of its board of directors is not
selected by such governmental unit.
"Person": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by
the Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
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, 12E
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, 12E
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) if an insurance company, we are purchasing
the Certificates with funds contained in an "insurance company general
account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and our purchase and holding of the
Certificates are covered under PTCE 95-60, (f) 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 (h) below), (g) 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 (h) 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, 12E
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) if an insurance company, we are purchasing the
Certificates with funds contained in an "insurance company general
account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and our purchase and holding of the
Certificates are covered under PTCE 95-60, (f) 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 Act or that would render the
disposition of the Certificates a violation of Section 5 of the Act or
require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (g) we are a "qualified institutional buyer" as that term
is defined in Rule 144A under the Act ("Rule 144A") and have completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2, (h) we are aware that the sale to us is being made in
reliance on Rule 144A, and (i) 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 (A) 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 (B) pursuant to another exemption from
registration under the Act.
Very truly yours,
________________________
Print Name of Transferee
By:
--------------------------
Authorized Officer
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 Independent
National Mortgage Corporation as Master Servicer, Inc, 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:______________________
