______________________________________________________________________
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) January 29, 1998
CWMBS, INC. (as depositor under the Pooling and Servicing
Agreement, dated as of January 1, 1998, providing for the
issuance of the CWMBS, INC., Mortgage Pass-Through
Certificates, Series 1998-2).
CWMBS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-40145 95-4449516
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
4500 Park Granada
Calabasas, California 91302
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (818) 304-5591
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_____________________________________________________________________
Item 5. Other Events.
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On January 29, 1998, CWMBS, Inc. (the "Company") entered into a Pooling
and Servicing Agreement dated as of January 1, 1998 (the "Pooling and
Servicing Agreement"), by and among the Company, as depositor, Countrywide
Home Loans, Inc. ("CHL"), as seller and as master servicer, and The Bank of
New York, as trustee (the "Trustee"), providing for the issuance of the
Company's Mortgage Pass-Through Certificates, Series 1998-2. 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. The Pooling and Servicing Agreement, dated as of January 1,
1998, by and among the Company, CHL 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: January __, 1998
Exhibit Index
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Exhibit Page
- ------- ----
99.1. Pooling and Servicing Agreement,
dated as of January 1, 1998, by
and among, the Company, CHL
and the Trustee. 64
EXHIBIT 99.1
------------
(insert pooling agreement here)
EXECUTION COPY
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CWMBS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller and Master Servicer
and
THE BANK OF NEW YORK,
Trustee
___________________________________
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1998
__________________________________
MORTGAGE PASS-THROUGH CERTIFICATES, Series 1998-2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Accretion Directed Certificates . . . . . . . . . . . . . . . . . . I-1
Accrual Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Accrual Components . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Adjusted Mortgage Rate . . . . . . . . . . . . . . . . . . . . . . . I-1
Adjusted Net Mortgage Rate . . . . . . . . . . . . . . . . . . . . . I-1
Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Allocable Share . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Amount Available for Senior Principal . . . . . . . . . . . . . . . I-2
Amount Held for Future Distribution . . . . . . . . . . . . . . . . I-2
Applicable Credit Support Percentage . . . . . . . . . . . . . . . . I-2
Appraised Value . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
Bankruptcy Coverage Termination Date . . . . . . . . . . . . . . . . I-2
Bankruptcy Loss . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
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-3
Certificate Owner . . . . . . . . . . . . . . . . . . . . . . . . . I-3
Certificate Register . . . . . . . . . . . . . . . . . . . . . . . . I-3
Certificateholder or Holder . . . . . . . . . . . . . . . . . . . . I-3
Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
Class Certificate Balance . . . . . . . . . . . . . . . . . . . . . I-4
Class Interest Shortfall . . . . . . . . . . . . . . . . . . . . . . I-4
Class Optimal Interest Distribution Amount . . . . . . . . . . . . . I-4
Class PO Deferred Amount . . . . . . . . . . . . . . . . . . . . . . I-4
Class Subordination Percentage . . . . . . . . . . . . . . . . . . . I-4
Class Unpaid Interest Amounts . . . . . . . . . . . . . . . . . . . I-4
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
COFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
COFI Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Component Balance . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Component Certificates . . . . . . . . . . . . . . . . . . . . . . . I-5
Cooperative Corporation . . . . . . . . . . . . . . . . . . . . . . I-5
Coop Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Cooperative Loan . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Cooperative Property . . . . . . . . . . . . . . . . . . . . . . . . I-5
Cooperative Unit . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . I-5
Corresponding Classes of Certificates . . . . . . . . . . . . . . . I-5
Cut-off Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
Cut-off Date Pool Principal Balance . . . . . . . . . . . . . . . . I-5
Cut-off Date Principal Balance . . . . . . . . . . . . . . . . . . . I-6
Debt Service Reduction . . . . . . . . . . . . . . . . . . . . . . . I-6
Defective Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . I-6
Deficient Valuation . . . . . . . . . . . . . . . . . . . . . . . . I-6
Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . I-6
Delay Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Deleted Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-6
Denomination . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Depository Participant . . . . . . . . . . . . . . . . . . . . . . . I-6
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Discount Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . I-6
Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . I-7
Distribution Account Deposit Date . . . . . . . . . . . . . . . . . I-7
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Due Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Duff & Phelps . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Eligible Account . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
ERISA-Restricted Certificate . . . . . . . . . . . . . . . . . . . . I-7
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
Excess Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Excess Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Expense Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
FHLMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
FIRREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Fitch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
FNMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Fraud Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Fraud Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
Fraud Loss Coverage Amount . . . . . . . . . . . . . . . . . . . . . I-8
Fraud Loss Coverage Termination Date . . . . . . . . . . . . . . . . I-9
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Indirect Participant . . . . . . . . . . . . . . . . . . . . . . . . I-9
Initial Bankruptcy Coverage Amount . . . . . . . . . . . . . . . . . I-9
Initial Component Balance . . . . . . . . . . . . . . . . . . . . . I-9
Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Insured Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Interest Accrual Period . . . . . . . . . . . . . . . . . . . . . . I-9
Interest Determination Date . . . . . . . . . . . . . . . . . . . . I-9
Latest Possible Maturity Date . . . . . . . . . . . . . . . . . . . I-9
LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
LIBOR Certificates . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Liquidated Mortgage Loan . . . . . . . . . . . . . . . . . . . . . I-10
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . . . I-10
Loan-to-Value Ratio . . . . . . . . . . . . . . . . . . . . . . . I-10
Lost Mortgage Note . . . . . . . . . . . . . . . . . . . . . . . . I-10
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Majority in Interest . . . . . . . . . . . . . . . . . . . . . . . I-10
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Master Servicer Advance Date . . . . . . . . . . . . . . . . . . . I-10
Master Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . I-10
Master Servicing Fee Rate . . . . . . . . . . . . . . . . . . . . I-10
Monthly Statement . . . . . . . . . . . . . . . . . . . . . . . . I-10
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Mortgage File . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Mortgage Loan Schedule . . . . . . . . . . . . . . . . . . . . . . I-11
Mortgage Note . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Mortgage Rate . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Mortgaged Property . . . . . . . . . . . . . . . . . . . . . . . . I-12
Mortgagor . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
National Cost of Funds Index . . . . . . . . . . . . . . . . . . . I-12
Net Prepayment Interest Shortfalls . . . . . . . . . . . . . . . . I-12
Non-Delay Certificates . . . . . . . . . . . . . . . . . . . . . . I-12
Non-Discount Mortgage Loan . . . . . . . . . . . . . . . . . . . . I-12
Non-PO Formula Principal Amount . . . . . . . . . . . . . . . . . I-12
Non-PO Percentage . . . . . . . . . . . . . . . . . . . . . . . . I-13
Nonrecoverable Advance . . . . . . . . . . . . . . . . . . . . . . I-13
Notice of Final Distribution . . . . . . . . . . . . . . . . . . . I-13
Notional Amount . . . . . . . . . . . . . . . . . . . . . . . . . I-13
Notional Amount Certificates . . . . . . . . . . . . . . . . . . . I-13
Offered Certificates . . . . . . . . . . . . . . . . . . . . . . . I-13
Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . I-13
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . I-13
Optional Termination . . . . . . . . . . . . . . . . . . . . . . . I-13
Original Applicable Credit Support Percentage . . . . . . . . . . I-14
Original Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . I-14
Original Subordinated Principal Balance . . . . . . . . . . . . . I-14
OTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Outside Reference Date . . . . . . . . . . . . . . . . . . . . . . I-14
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
Outstanding Mortgage Loan . . . . . . . . . . . . . . . . . . . . I-14
Ownership Interest . . . . . . . . . . . . . . . . . . . . . . . . I-14
Pass-Through Rate . . . . . . . . . . . . . . . . . . . . . . . . I-14
Percentage Interest . . . . . . . . . . . . . . . . . . . . . . . I-14
Permitted Investments . . . . . . . . . . . . . . . . . . . . . . I-14
Permitted Transferee . . . . . . . . . . . . . . . . . . . . . . . I-16
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16
Physical Certificate . . . . . . . . . . . . . . . . . . . . . . . I-16
Planned Balance . . . . . . . . . . . . . . . . . . . . . . . . . I-16
Planned Principal Classes . . . . . . . . . . . . . . . . . . . . I-17
PO Formula Principal Amount . . . . . . . . . . . . . . . . . . . I-17
PO Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
Pool Stated Principal Balance . . . . . . . . . . . . . . . . . . I-17
Prepayment Interest Excess . . . . . . . . . . . . . . . . . . . . I-17
Prepayment Interest Shortfall . . . . . . . . . . . . . . . . . . I-17
Prepayment Period . . . . . . . . . . . . . . . . . . . . . . . . I-17
Prepayment Shift Percentage . . . . . . . . . . . . . . . . . . . I-17
Primary Insurance Policy . . . . . . . . . . . . . . . . . . . . . I-18
Primary Planned Principal Classes . . . . . . . . . . . . . . . . I-18
Principal Prepayment . . . . . . . . . . . . . . . . . . . . . . . I-18
Principal Prepayment in Full . . . . . . . . . . . . . . . . . . . I-18
Priority Amount . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Priority Percentage . . . . . . . . . . . . . . . . . . . . . . . I-18
Private Certificate . . . . . . . . . . . . . . . . . . . . . . . I-18
Pro Rata Share . . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Proprietary Lease . . . . . . . . . . . . . . . . . . . . . . . . I-18
Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . I-18
PUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . I-18
Qualified Insurer . . . . . . . . . . . . . . . . . . . . . . . . I-19
Rating Agency . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Realized Loss . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Recognition Agreement . . . . . . . . . . . . . . . . . . . . . . I-19
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Reference Bank . . . . . . . . . . . . . . . . . . . . . . . . . . I-19
Refinancing Mortgage Loan . . . . . . . . . . . . . . . . . . . . I-20
Regular Certificates . . . . . . . . . . . . . . . . . . . . . . . I-20
Relief Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-20
Relief Act Reductions . . . . . . . . . . . . . . . . . . . . . . I-20
REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-20
REMIC Change of Law . . . . . . . . . . . . . . . . . . . . . . . I-20
REMIC Provisions . . . . . . . . . . . . . . . . . . . . . . . . . I-20
REO Property . . . . . . . . . . . . . . . . . . . . . . . . . . . I-20
Request for Release . . . . . . . . . . . . . . . . . . . . . . . I-20
Required Coupon . . . . . . . . . . . . . . . . . . . . . . . . . I-20
Required Insurance Policy . . . . . . . . . . . . . . . . . . . . I-20
Residual Certificates . . . . . . . . . . . . . . . . . . . . . . I-20
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . I-20
Restricted Classes . . . . . . . . . . . . . . . . . . . . . . . . I-20
Scheduled Balances . . . . . . . . . . . . . . . . . . . . . . . . I-20
Scheduled Classes . . . . . . . . . . . . . . . . . . . . . . . . I-21
Scheduled Payment . . . . . . . . . . . . . . . . . . . . . . . . I-21
Scheduled Principal Distribution Amount . . . . . . . . . . . . . I-21
Secondary Planned Principal Clauses . . . . . . . . . . . . . . . I-21
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . I-21
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-21
Senior Certificates . . . . . . . . . . . . . . . . . . . . . . . I-21
Senior Credit Support Depletion Date . . . . . . . . . . . . . . . I-21
Senior Percentage . . . . . . . . . . . . . . . . . . . . . . . . I-21
Senior Prepayment Percentage . . . . . . . . . . . . . . . . . . . I-21
Senior Principal Distribution Amount . . . . . . . . . . . . . . . I-22
Senior Step Down Conditions . . . . . . . . . . . . . . . . . . . I-22
Servicing Advances . . . . . . . . . . . . . . . . . . . . . . . . I-22
Servicing Officer . . . . . . . . . . . . . . . . . . . . . . . . I-22
Shift Percentage . . . . . . . . . . . . . . . . . . . . . . . . . I-22
Special Hazard Coverage Termination Date . . . . . . . . . . . . . I-22
Special Hazard Loss . . . . . . . . . . . . . . . . . . . . . . . I-22
Special Hazard Loss Coverage Amount . . . . . . . . . . . . . . . I-23
Special Hazard Mortgage Loan . . . . . . . . . . . . . . . . . . . I-24
S&P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Startup Day . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Stated Principal Balance . . . . . . . . . . . . . . . . . . . . . I-24
Streamlined Documentation Mortgage Loan . . . . . . . . . . . . . I-24
Subordinated Certificates . . . . . . . . . . . . . . . . . . . . I-24
Subordinated Percentage . . . . . . . . . . . . . . . . . . . . . I-24
Subordinated Prepayment Percentage . . . . . . . . . . . . . . . . I-24
Subordinated Principal Distribution Amount . . . . . . . . . . . . I-24
Subservicer . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
Substitute Mortgage Loan . . . . . . . . . . . . . . . . . . . . . I-24
Substitution Adjustment Amount . . . . . . . . . . . . . . . . . . I-25
Support Classes . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Targeted Balances . . . . . . . . . . . . . . . . . . . . . . . . I-25
Targeted Principal Classes . . . . . . . . . . . . . . . . . . . . I-25
Tax Matters Person . . . . . . . . . . . . . . . . . . . . . . . . I-25
Tax Matters Person Certificate . . . . . . . . . . . . . . . . . . I-25
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Trustee Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Trustee Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
Unscheduled Principal Distribution Amount . . . . . . . . . . . . I-26
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans . . . . . . . . . . . II-1
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans . . . . II-3
SECTION 2.03. Representations, Warranties and Covenants of the
Seller and Master Servicer . . . . . . . . . . . . II-5
SECTION 2.04. Representations and Warranties of the Depositor as
to the Mortgage Loans . . . . . . . . . . . . . . . II-7
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions . . . . . . . . . . . . . . . . . . . II-7
SECTION 2.06. Execution and Delivery of Certificates . . . . . . . II-8
SECTION 2.07. REMIC Matters . . . . . . . . . . . . . . . . . . . II-8
SECTION 2.08. Covenants of the Master Servicer . . . . . . . . . II-8
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. Rights of the Depositor and the Trustee in Respect
of the Master Servicer . . . . . . . . . . . . . . III-2
SECTION 3.04. Trustee to Act as Master Servicer . . . . . . . . . III-2
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account . . . . . . . . . . . III-3
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts . . . . . . . . . . . . . . . . . . III-5
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans . . . . . . . . . . . III-6
SECTION 3.08. Permitted Withdrawals from the Certificate Account
and Distribution Account . . . . . . . . . . . . . III-6
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies . . . . . . . . . . . . III-8
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements . . . . . . . . . . . . . . . . . . . . III-9
SECTION 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans . . . . . . III-10
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files . III-12
SECTION 3.13. Documents Records and Funds in Possession of Master
Servicer to be Held for the Trustee . . . . . . . III-13
SECTION 3.14. Servicing Compensation . . . . . . . . . . . . . III-13
SECTION 3.15. Access to Certain Documentation . . . . . . . . . III-14
SECTION 3.16. Annual Statement as to Compliance . . . . . . . . III-14
SECTION 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements . . . . . . . . . III-14
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds . III-15
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. Allocation of Realized Losses . . . . . . . . . . . IV-5
SECTION 4.06. Monthly Statements to Certificateholders . . . . . IV-6
SECTION 4.07. Determination of Pass-Through Rates for COFI
Certificates . . . . . . . . . . . . . . . . . . . IV-8
SECTION 4.08. Determination of Pass-Through Rates for LIBOR
Certificates . . . . . . . . . . . . . . . . . . . IV-10
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates . . . . . . . . . . . . . . . . . . V-1
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates . . . . . . . . . . . . V-1
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . . V-5
SECTION 5.04. Persons Deemed Owners . . . . . . . . . . . . . . . . V-6
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses . . . . . . . . . . . . . . . . . . . . . . V-6
SECTION 5.06. Maintenance of Office or Agency . . . . . . . . . . . V-6
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 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-2
SECTION 7.03. Notification to Certificateholders . . . . . . . . VII-3
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee . . . . . . . . . . . . . . . . VIII-1
SECTION 8.02. Certain Matters Affecting the Trustee . . . . . . VIII-2
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans . . . . . . . . . . . . . . . . . . . . . . VIII-3
SECTION 8.04. Trustee May Own Certificates . . . . . . . . . . VIII-3
SECTION 8.05. Trustee's Fees and Expenses . . . . . . . . . . . VIII-3
SECTION 8.06. Eligibility Requirements for Trustee . . . . . . VIII-4
SECTION 8.07. Resignation and Removal of Trustee . . . . . . . VIII-4
SECTION 8.08. Successor Trustee . . . . . . . . . . . . . . . . VIII-5
SECTION 8.09. Merger or Consolidation of Trustee . . . . . . . VIII-5
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee . . VIII-5
SECTION 8.11. Tax Matters . . . . . . . . . . . . . . . . . . . VIII-7
SECTION 8.12. Periodic Filings. . . . . . . . . . . . . . . . . VIII-8
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all
Mortgage Loans . . . . . . . . . . . . . . . . . . IX-1
SECTION 9.02. Final Distribution on the Certificates . . . . . . IX-1
SECTION 9.03. Additional Termination Requirements . . . . . . . . IX-2
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-2
SECTION 10.04. Intention of Parties . . . . . . . . . . . . . . . . X-2
SECTION 10.05. Notices . . . . . . . . . . . . . . . . . . . . . . . X-3
SECTION 10.06. Severability of Provisions . . . . . . . . . . . . . X-4
SECTION 10.07. Assignment . . . . . . . . . . . . . . . . . . . . . X-4
SECTION 10.08. Limitation on Rights of Certificateholders . . . . . X-4
SECTION 10.09. Inspection and Audit Rights . . . . . . . . . . . . . X-5
SECTION 10.10. Certificates Nonassessable and Fully Paid . . . . . . X-5
SCHEDULES
Schedule I: Mortgage Loan Schedule . . . . . . . . . . . . . . S-I-1
Schedule II: Representations and Warranties of the
Seller/Master Servicer . . . . . . . . . . . . . S-II-1
Schedule III: Representations and Warranties as to
the Mortgage Loans . . . . . . . . . . . . . . S-III-1
Schedule IV: Form of Monthly Master Service Report . . . . . . S-IV-1
EXHIBITS
Exhibit A: Form of Senior Certificate
(excluding Notional Amount Certificates) . . . . . . A-1
Exhibit B: Form of Subordinated Certificate . . . . . . . . . . B-1
Exhibit C: Form of Class A-R Certificate . . . . . . . . . . . . C-1
Exhibit D: Form of Notional Amount Certificate . . . . . . . . . D-1
Exhibit E: Form of Reverse of Certificates . . . . . . . . . . . E-1
Exhibit F: (Reserved) . . . . . . . . . . . . . . . . . . . . . F-1
Exhibit G: Form of Initial Certificates . . . . . . . . . . . . G-1
Exhibit H: Form of Final Certification of Trustee . . . . . . . H-1
Exhibit I: Transfer Affidavit . . . . . . . . . . . . . . . . . I-1
Exhibit J: Form of Transferor Certificate . . . . . . . . . . . J-1
Exhibit K: Form of Investment Letter (Non-Rule 144A) . . . . . . K-1
Exhibit L: Form of Rule 144A Letter . . . . . . . . . . . . . . L-1
Exhibit M: Request for Release (for Trustee) . . . . . . . . . . M-1
Exhibit N: Request for Release (Mortgage Loan)
Paid in Full, Repurchased and Replaced) . . . . . . .N-1
Exhibit O: Form of Financial Guaranty Insurance Policy . . . . . O-1
THIS POOLING AND SERVICING AGREEMENT, dated as of January 1, 1998,
among CWMBS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (in such
capacity, the "Seller") and as master servicer (in such capacity, the "Master
Servicer"), and THE BANK OF NEW YORK, a banking corporation organized under
the laws of the State of New York, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund for
federal income tax purposes will consist of a single REMIC. The Certificates
will represent the entire beneficial ownership interest in the Trust Fund.
The Regular Certificates will represent the "regular interests" in the Trust
Fund and the Residual Certificates will represent the single "residual
interest" in the Trust Fund. The "latest possible maturity date" for federal
income tax purposes of all interests created hereby will be the Latest
Possible Maturity Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess
thereof in which such Classes shall be issuable (except that one Certificate
of each Class of Certificates may be issued in a different amount and, in
addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
<TABLE>
<CAPTION> Integral
Initial Class Multiples
Certificate Pass-Through Minimum in Excess of
Balance Rate Denomination Minimum
<S> <C> <C> <C> <C>
Class A-1 $195,212,599.00 6.50% $25,000 $1,000
Class A-2 $5,000,000.00 6.25% $ 1,000 $1,000
Class A-3 $5,000,000.00 6.75% $ 1,000 $1,000
Class A-4 $45,116,324.00 6.50% $25,000 $1,000
Class A-5 $50,000,000.00 6.75% $25,000 $1,000
Class A-6 $1,923,077.00 (2) $25,000 $1,000
Class A-7 $25,000,000.00 6.50% $25,000 $1,000
Class A-8 $45,500,000.00 6.50% $25,000 $1,000
Class A-9 $10,982,060.00 6.50% $25,000 $1,000
Class A-10 $45,000,000.00 6.50% $25,000 $1,000
Class PO $ 469.00 (2) $25,000 $1,000
Class X (1) (3) $25,000 (4) $1,000 (4)
Class A-R $100.00 6.50% $100 N/A
Class M $10,128,000.00 6.50% $25,000 $1,000
Class B-1 $ 4,500,000.00 6.50% $25,000 $1,000
Class B-2 $ 2,700,000.00 6.50% $25,000 $1,000
Class B-3 $ 1,800,000.00 6.50% $100,000 $1,000
Class B-4 $ 900,000.00 6.50% $100,000 $1,000
Class B-5 $ 1,352,467.00 6.50% $100,000 $1,000
</TABLE>
_____________________
(1) The Class X Certificates will be Notional Amount Certificates, will have
no principal balance and will bear interest on their Notional Amount
(initially $449,776,089).
(2) The Class A-6 and the Class PO Certificates will be Principal Only
Certificates and will not bear interest.
(3) The Pass-Through Rate for the Class X Certificates for any Distribution
Date will be equal to the excess of (a) the average of the Adjusted Net
Mortgage Rates of the Non-Discount Mortgage Loans, weighted on the basis
of their respective Stated Principal Balances over (b) 6.50% per annum.
The Pass-Through Rate of the Class X Certificates for the first
Distribution Date is 0.983%.
(4) Minimum Denomination is based on the Notional Amount of such Class.
Set forth below are designations of Classes of Certificates to the categories
used herein:
Accretion Directed
Certificates. . . . . . None.
Accrual Components . . . None.
Book-Entry Certificates . . All Classes of Certificates other than the
Physical Certificates.
Component Certificates . . None.
Components . . . . . . For purposes of calculating distributions, the
Component Certificates will be comprised of
multiple payment components having the
designations, Initial Component Balances and
Pass-Through Rates set forth below:
Initial
Component
Designation Balance Pass-Through Rate
- ------------------------------------ ------- -----------------
N/A N/A N/A
Delay Certificates . . . All interest-bearing Classes of Certificates
other than the Non-Delay Certificates, if any.
ERISA-Restricted
Certificates . . . . . Class PO and Class X Certificates, Residual
Certificates and Subordinated Certificates.
Floating Rate Certificates. None.
Inverse Floating Rate
Certificates . . . . . None.
COFI Certificates. . . . None.
LIBOR Certificates . . . None.
Non-Delay Certificates . . None.
Notional Amount
Certificates . . . . . Class X Certificates.
Offered Certificates . . All Classes of Certificates other than the
Private Certificates.
Physical Certificates . . Class X and Class PO Certificates, the Private
Certificates and Residual Certificates.
Planned Principal Classes . None.
Primary Planned Principal
Classes . . . . . . . None.
Principal Only
Certificates . . . . . Class A-6 and Class PO Certificates.
Private Certificates . . Class B-3, Class B-4 and Class B-5
Certificates.
Rating Agencies . . . . S&P and Fitch.
Regular Certificates . . All Classes of Certificates, other than the
Residual Certificates.
Residual Certificates . . Class A-R Certificates.
Scheduled Principal
Classes . . . . . . . None.
Secondary Planned Principal
Class . . . . . . . None.
Senior Certificates . . . Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8,
Class A-9, Class A-10, Class PO, Class X and
Class A-R Certificates.
Subordinated Certificates . Class M, Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5 Certificates.
Support Classes . . . . None.
Targeted Principal
Classes . . . . . . . None.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined
terms and provisions herein relating to statistical rating agencies not
designated above as Rating Agencies shall be of no force or effect.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: As specified in the
-------------------------------
Preliminary Statement.
Accrual Amount: With respect to any Accrual Components and any
--------------
Distribution Date prior to the applicable Accrual Termination Date, the
amount allocable to interest on each such Class of Accrual Certificates with
respect to such Distribution Date pursuant to Section 4.02(a)(iii).
Accrual Components: As specified in the Preliminary Statement.
------------------
Adjusted Mortgage Rate: As to each Mortgage Loan, and at any
----------------------
time, the per annum rate equal to the Mortgage Rate less the Master Servicing
Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at
--------------------------
any time, the per annum rate equal to the Mortgage Rate less the related
Expense Rate. For purposes of determining whether any Substitute Mortgage
Loan is a Discount Mortgage Loan or a Non-Discount Mortgage Loan and for
purposes of calculating the applicable PO Percentage and applicable Non-PO
Percentage, each Substitute Mortgage Loan shall be deemed to have an Adjusted
Net Mortgage Rate equal to the Adjusted Net Mortgage Rate of the Deleted
Mortgage Loan for which it is substituted.
Advance: The payment required to be made by the Master Servicer
-------
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such payment being equal to the aggregate of payments of principal and
interest (net of the Master Servicing Fee and net of any net income in the
case of any REO Property) on the Mortgage Loans that were due on the related
Due Date and not received as of the close of business on the related
Determination Date, less the aggregate amount of any such delinquent payments
that the Master Servicer has determined would constitute a Nonrecoverable
Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all
---------
amendments or supplements hereto.
Allocable Share: As to any Distribution Date and any Mortgage
---------------
Loan (i) with respect to the Class X Certificates, (a) the ratio that (x) the
excess, if any, of the Adjusted Net Mortgage Rate with respect to such
Mortgage Loan over the Required Coupon bears to (y) such Adjusted Net
Mortgage Rate or (b) if the Adjusted Net Mortgage Rate with respect to such
Mortgage Loan does not exceed the Required Coupon, zero, (ii) with respect to
the Class PO Certificates, zero and (iii) with respect to each other Class of
Certificates the product of (a) the lesser of (I) the ratio that the Required
Coupon bears to such Adjusted Net Mortgage Rate and (II) one, multiplied by
(b) the ratio that the amount calculated with respect to such Distribution
Date for such Class pursuant to clause (i) of the definition of Class Optimal
Interest Distribution Amount (without giving effect to any reduction of such
amount pursuant to Section 4.02(d)) bears to the amount calculated with
respect to such Distribution Date for each Class of Certificates pursuant to
clause (i) of the definition of Class Optimal Interest Distribution Amount
(without giving effect to any reduction of such amount pursuant to Section
4.02(d)).
Amount Available for Senior Principal: As to any Distribution
-------------------------------------
Date, Available Funds for such Distribution Date reduced by the aggregate
amount distributable (or allocable to the Accrual Amount, if applicable) on
such Distribution Date in respect of interest on the Senior Certificates
pursuant to Section 4.02(a)(ii).
Amount Held for Future Distribution: As to any Distribution
-----------------------------------
Date, the aggregate amount held in the Certificate Account at the close of
business on the related Determination Date on account of (i) Principal
Prepayments received during the related Prepayment Period and Liquidation
Proceeds received in the month of such Distribution Date and (ii) all
Scheduled Payments due after the related Due Date.
Applicable Credit Support Percentage: As defined in Section
------------------------------------
4.02(e).
Appraised Value: With respect to any Mortgage Loan, the
---------------
Appraised Value of the related Mortgaged Property shall be: (i) with respect
to a Mortgage Loan other than a Refinancing Mortgage Loan, the lesser of (a)
the value of the Mortgaged Property based upon the appraisal made at the time
of the origination of such Mortgage Loan and (b) the sales price of the
Mortgaged Property at the time of the origination of such Mortgage Loan; (ii)
with respect to a Refinancing Mortgage Loan other than a Streamlined
Documentation Mortgage Loan, the value of the Mortgaged Property based upon
the appraisal made-at the time of the origination of such Refinancing
Mortgage Loan; and (iii) with respect to a Streamlined Documentation Mortgage
Loan, (a) if the loan-to-value ratio with respect to the Original Mortgage
Loan at the time of the origination thereof was 75% or less, (or 70% or less
for Mortgaged Properties in California) the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of the Original
Mortgage Loan and (b) if the loan-to-value ratio with respect to the Original
Mortgage Loan at the time of the origination thereof was greater than 75% (or
greater than 70% Mortgaged Properties in California, the value of the
Mortgaged Property based upon the appraisal (which may be a drive-by
appraisal) made at the time of the origination of such Streamlined
Documentation Mortgage Loan.
Available Funds: As to any Distribution Date, the sum of (a)
---------------
the aggregate amount held in the Certificate Account at the close of business
on the related Determination Date net of the Amount Held for Future
Distribution and net of amounts permitted to be withdrawn from the
Certificate Account pursuant to clauses (i)-(viii), inclusive, of Section
3.08(a) and amounts permitted to be withdrawn from the Distribution Account
pursuant to clauses (i)-(iii) inclusive of Section 3.08(b), (b) the amount of
the related Advance and (c) in connection with Defective Mortgage Loans, as
applicable, the aggregate of the Purchase Prices and Substitution Adjustment
Amounts deposited on the related Distribution Account Deposit Date.
Bankruptcy Code: The United States Bankruptcy Reform Act of
---------------
1978, as amended.
Bankruptcy Coverage Termination Date: The point in time at
------------------------------------
which the Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
---------------
Valuation or Debt Service Reduction; provided, however, that a Bankruptcy
-------- -------
Loss shall not be deemed a Bankruptcy Loss hereunder so long as the Master
Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the
related Mortgage Loan and either (A) the related Mortgage Loan is not in
default with regard to payments due thereunder or (B) delinquent payments of
principal and interest under the related Mortgage Loan and any related
escrow payments in respect of such Mortgage Loan are being advanced on a
current basis by the Master Servicer, in either case without giving effect
to any Debt Service Reduction or Deficient Valuation.
Bankruptcy Loss Coverage Amount: As of any Determination Date,
-------------------------------
the Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy
Coverage Amount as reduced by (i) the aggregate amount of Bankruptcy Losses
allocated to the Certificates since the Cut-off Date and (ii) any permissible
reductions in the Bankruptcy Loss Coverage Amount as evidenced by a letter of
each Rating Agency to the Trustee to the effect that any such reduction will
not result in a downgrading of the then current ratings assigned to the
Classes of Certificates rated by it.
Blanket Mortgage: The mortgage or mortgages encumbering the
----------------
Cooperative Property.
Book-Entry Certificates: As specified in the Preliminary
-----------------------
Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or
------------
(ii) a day on which banking institutions in the City of New York, New York,
or the State of California or the city in which the Corporate Trust Office of
the Trustee is located are authorized or obligated by law or executive order
to be closed.
Certificate: Any one of the Certificates executed by the
-----------
Trustee in substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account or Accounts
-------------------
created and maintained by the Master Servicer pursuant to Section 3.05 with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of Certificateholders and designated "Countrywide Home
Loans, Inc. in trust for the registered holders of CWMBS, Inc. Mortgage
Pass-Through Certificates Series 1998-2."
Certificate Balance: With respect to any Certificate at any
-------------------
date, the maximum dollar amount of principal to which the Holder thereof is
then entitled hereunder, such amount being equal to the Denomination thereof
(A) minus the sum of (i) all distributions of principal previously made with
respect thereto and (ii) all Realized Losses allocated thereto and, in the
case of any Subordinated Certificates, all other reductions in Certificate
Balance previously allocated thereto pursuant to Section 4.03 and (B) in the
case of any Class of Accrual Certificates, increased by the Accrual Amount
added to the Class Certificate Balance of such Class prior to such date.
Certificate Owner: With respect to a Book-Entry Certificate,
-----------------
the Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
--------------------
Section 5.02 hereof.
Certificateholder or Holder: The person in whose name a
---------------------------
Certificate is registered in the Certificate Register, except that, solely
for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect such consent
has been obtained; provided, however, that if any
-------- -------
such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the
taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any affiliate of the Depositor in
determining which Certificates are registered in the name of an affiliate of
the Depositor.
Class: All Certificates bearing the same class designation as
-----
set forth in the Preliminary Statement.
Class Certificate Balance: With respect to any Class and as to
-------------------------
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and
------------------------
Class, the amount by which the amount described in clause (i) of the
definition of Class Optimal Interest Distribution Amount for such Class
exceeds the amount of interest actually distributed on such Class on such
Distribution Date pursuant to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
------------------------------------------
Distribution Date and interest bearing Class or, with respect to any interest
bearing Component, any Component thereof, the sum of (i) one month's interest
accrued during the related Interest Accrual Period at the Pass-Through Rate
for such Class on the related Class Certificate Balance, Component Balance or
Notional Amount, as applicable, subject to reduction as provided in Section
4.02(d) and (ii) any Class Unpaid Interest Amounts for such Class or
Component.
Class PO Deferred Amount: As to any Distribution Date, the
------------------------
aggregate of the applicable PO Percentage of each Realized Loss, other than
any Excess Loss, to be allocated to the Class PO Certificates on such
Distribution Date on or prior to the Senior Credit Support Depletion Date or
previously allocated to the Class PO Certificates and not yet paid to the
Holders of the Class PO Certificates.
Class Subordination Percentage: With respect to any
------------------------------
Distribution Date and each Class of Subordinated Certificates, the quotient
(expressed as a percentage) of (a) the Class Certificate Balance of such
Class of Certificates immediately prior to such Distribution Date divided by
(b) the aggregate of the Class Certificate Balances immediately prior to such
Distribution Date of all Classes of Certificates.
Class Unpaid Interest Amounts: As to any Distribution Date and
-----------------------------
Class of interest bearing Certificates, the amount by which the aggregate
Class Interest Shortfalls for such Class on prior Distribution Dates exceeds
the amount distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of the definition of Class Optimal Interest Distribution Amount.
Closing Date: January 29, 1998.
------------
Code: The Internal Revenue Code of 1986, including any
----
successor or amendatory provisions.
COFI: The Monthly Weighted Average Cost of Funds Index for the
----
Eleventh District Savings Institutions published by the Federal Home Loan
Bank of San Francisco.
COFI Certificates: As specified in the Preliminary Statement.
-----------------
Component: As specified in the Preliminary Statement.
---------
Component Balance: With respect to any Component and any
-----------------
Distribution Date, the Initial Component Balance thereof on the Closing Date,
less all amounts applied in reduction of the principal balance of such
Component and Realized Losses allocated thereto on previous Distribution
Dates.
Component Certificates: As specified in the Preliminary
- --------------------------------
Statement.
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 1998-2, facsimile no. (212) 815-4135, and which is
the address to which notices to and correspondence with the Trustee should be
directed.
Corresponding Classes of Certificates: With respect to each
-------------------------------------
Subsidiary REMIC Regular Interest, any Class of Certificates or Components
appearing opposite such Subsidiary REMIC Regular Interest in the Preliminary
Statement.
Cut-off Date: January 1, 1998.
------------
Cut-off Date Pool Principal Balance: $450,115,097.
-----------------------------------
Cut-off Date Principal Balance: As to any Mortgage Loan, the
------------------------------
Stated Principal Balance thereof as of the close of business on the Cut-off
Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
----------------------
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of
principal.
Defective Mortgage Loan: Any Mortgage Loan which is required to
-----------------------
be repurchased pursuant to Section 2.02 or 2.03.
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(b) hereof.
---------------------
Denomination: With respect to each Certificate, the amount set
------------
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the "Initial Notional Amount of this Certificate" or, if
neither of the foregoing, the Percentage Interest appearing on the face
thereof.
Depositor: 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 22nd day
------------------
of each month or if such 22nd day is not a Business Day the next preceding
Business Day; provided, however, that if such 22nd day or such Business
-------- -------
Day, whichever is applicable, is less than two Business Days prior to the
related Distribution Date, the Determination Date shall be the first Business
Day which is two Business Days preceding such Distribution Date.
Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net
----------------------
Mortgage Rate that is less than the Required Coupon.
Distribution Account: The separate Eligible Account created and
--------------------
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New
York in trust for registered holders of CWMBS, Inc. Mortgage Pass-Through
Certificates, Series 1998-2." 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 February 1998.
Due Date: With respect to any Distribution Date, the first day
--------
of the month in which the related Distribution Date occurs.
Duff & Phelps: Duff & Phelps Credit Rating Company, or any
-------------
successor thereto. If Duff & Phelps is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for
notices to Duff & Phelps shall be Duff & Phelps Credit Rating Company, 55
East Monroe Street, 38th floor, Chicago, Illinois 60603, Attention: MBS
Monitoring, or such other address as Duff & Phelps may hereafter furnish to
the Depositor and the Master Servicer.
Eligible Account: Any of (i) an account or accounts maintained
----------------
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the debt obligations of such holding company) have the
highest short-term ratings of each Rating Agency at the time any amounts are
held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC
(to the limits established by the FDIC) and the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or
a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution or trust company in which such account is maintained, or (iii) a
trust account or accounts maintained with (a) the trust department of a
federal or state chartered depository institution or (b) a trust company,
acting in its fiduciary capacity or (iv) any other account acceptable to each
Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
-----
amended.
ERISA-Restricted Certificate: As specified in the Preliminary
----------------------------
Statement.
Escrow Account: The Eligible Account or Accounts established
--------------
and maintained pursuant to Section 3.06(a) hereof.
Event of Default: As defined in Section 7.01 hereof.
----------------
Excess Loss: The amount of any (i) Fraud Loss realized after
-----------
the Fraud Loss Coverage Termination Date, (ii) Special Hazard Loss realized
after the Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss
realized after the Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
---------------
the amount, if any, by which the sum of any Liquidation Proceeds of such
Mortgage Loan received in the calendar month in which such Mortgage Loan
became a Liquidated Mortgage Loan, net of any amounts previously reimbursed
to the Master Servicer as Nonrecoverable Advance(s) with respect to such
Mortgage Loan pursuant to Section 3.08(a)(iii), exceeds (i) the unpaid
principal balance of such Liquidated Mortgage Loan as of the Due Date in the
month in which such Mortgage Loan became a Liquidated Mortgage Loan plus (ii)
accrued interest at the Mortgage Rate from the Due Date as to which interest
was last paid or advanced (and not reimbursed) to Certificateholders up to
the Due Date applicable to the Distribution Date immediately following the
calendar month during which such liquidation occurred.
Expense Rate: As to each Mortgage Loan, the sum of the related
------------
Master Servicing Fee Rate and the Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any
----
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
-----
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA: The Financial Institutions Reform, Recovery, and
------
Enforcement Act of 1989.
Fitch: Fitch IBCA, Inc., or any successor thereto. If Fitch is
-----
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch IBCA, Inc.,
One State Street Plaza, New York, New York 10004, Attention: Residential
Mortgage Surveillance Group, or such other address as Fitch may hereafter
furnish to the Depositor and the Master Servicer.
FNMA: The Federal National Mortgage Association, a federally
----
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
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, $9,002,302
--------------------------
subject to reduction from time to time, by the amount of Fraud Losses
allocated to the Certificates. In addition, on each anniversary of the
Cut-off Date, the Fraud Loss Coverage Amount will be reduced as follows: (a)
on the first, second, third and fourth anniversaries of the Cut- off Date,
to an amount equal to the lesser of (i) 1% of the then current Pool Stated
Principal Balance and (ii) the excess of the Fraud Loss Coverage Amount as
of the preceding anniversary of the Cut-off Date over the cumulative amount
of Fraud Losses allocated to the Certificates since such preceding
anniversary; and (b) on the fifth anniversary of the Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at
------------------------------------
which the Fraud Loss Coverage Amount is reduced to zero.
Index: With respect to any Interest Accrual Period for the COFI
-----
Certificates, the then-applicable index used by the Trustee pursuant to
Section 4.05 to determine the applicable Pass-Through Rate for such Interest
Accrual Period for the COFI Certificates.
Indirect Participant: A broker, dealer, bank or other financial
--------------------
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Bankruptcy Coverage Amount: $116,842.
----------------------------------
Initial Component Balance: As specified in the Preliminary
-------------------------
Statement.
Insurance Policy: With respect to any Mortgage Loan included in
----------------
the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
------------------
Insurance Policy, in each case other than any amount included in such
Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
----------------
any other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay
-----------------------
Certificates and any Distribution Date, the calendar month prior to the month
of such Distribution Date. With respect to any Non-Delay Certificates and
any Distribution Date, the one month period commencing on the 25th day of the
month preceding the month in which such Distribution Date occurs and ending
on the 24th day of the month in which such Distribution Date occurs.
Interest Determination Date: With respect to (a) any Interest
---------------------------
Accrual Period for any LIBOR Certificates and (b) any Interest Accrual Period
for the COFI Certificates for which the applicable Index is LIBOR, the second
Business Day prior to the first day of such Interest Accrual Period.
Latest Possible Maturity Date: The Distribution Date following
-----------------------------
the third anniversary of the scheduled maturity date of the Mortgage Loan
having the latest scheduled maturity date as of the Cut-off Date.
LIBOR: The London interbank offered rate for one-month United
-----
States dollar deposits calculated in the manner described in Section 4.08.
LIBOR Certificates: As specified in the Preliminary Statement.
------------------
Liquidated Mortgage Loan: With respect to any Distribution
------------------------
Date, a defaulted Mortgage Loan (including any REO Property) which was
liquidated in the calendar month preceding the month of such Distribution
Date and as to which the Master Servicer has determined (in accordance with
this Agreement) that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan, including the final
disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
--------------------
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise
or amounts received in connection with any condemnation or partial release of
a Mortgaged Property and any other proceeds received in connection with an
REO Property, less the sum of related unreimbursed Master Servicing Fees,
Servicing Advances and Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as
-------------------
to any date of determination, the fraction (expressed as a percentage) the
numerator of which is the principal balance of the related Mortgage Loan at
such date of determination and the denominator of which is the Appraised
Value of the related Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which was
------------------
permanently lost or destroyed and has not been replaced.
Maintenance: With respect to any Cooperative Unit, the rent paid
-----------
by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
Majority in Interest: As to any Class of Regular Certificates,
--------------------
the Holders of Certificates of such Class evidencing, in the aggregate, at
least 51% of the Percentage Interests evidenced by all Certificates of such
Class.
Master Servicer: Countrywide Home Loans, Inc., a New York
---------------
corporation, and its successors and assigns, in its capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date,
----------------------------
12:30 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any
--------------------
Distribution Date, an amount payable out of each full payment of interest
received on such Mortgage Loan and equal to one-twelfth of the Master
Servicing Fee Rate multiplied by the Stated Principal Balance of such
Mortgage Loan as of the Due Date in the month of such Distribution Date
(prior to giving effect to any Scheduled Payments due on such Mortgage Loan
on such Due Date), subject to reduction as provided in Section 3.14.
Master Servicing Fee Rate: With respect to each Mortgage Loan,
-------------------------
0.25% per annum.
Monthly Statement: The statement delivered to the
-----------------
Certificateholders pursuant to Section 4.04.
Moody's: Moody's Investors Service, Inc., or any successor
-------
thereto. If Moody's is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to
Moody's shall be Moody's Investors Service, Inc., 99 Church Street, New York,
New York 10007, Attention: Residential Pass-Through Monitoring, or such other
address as Moody's may hereafter furnish to the Depositor or the Master
Servicer.
Mortgage: The mortgage, deed of trust or other instrument
--------
creating a first lien on an estate in fee simple or leasehold interest in
real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
-------------
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
--------------
assigned to the Trustee pursuant to the provisions hereof as from time to
time are held as a part of the Trust Fund (including any REO Property), the
mortgage loans so held being identified in the Mortgage Loan Schedule,
notwithstanding foreclosure or other acquisition of title of the related
Mortgaged Property.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
----------------------
time to time amended by the Master Servicer to reflect the addition of
Substitute Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant
to the provisions of this Agreement) transferred to the Trustee as part of
the Trust Fund and from time to time subject to this Agreement, attached
hereto as Schedule I, setting forth the following information with respect to
each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is either
(a) a detached single family dwelling (b) a dwelling in a de
minimis PUD, (c) a condominium unit or PUD (other than a de minimis
PUD), (d) a two- to four-unit residential property or (e) a
Cooperative Unit;
(xi) the Mortgage Rate;
(xii) the purpose for the Mortgage Loan;
(xiii) the type of documentation program pursuant to which the
Mortgage Loan was originated; and
(xiv) the Master Servicing Fee for the Mortgage Loan.
Such schedule shall also set forth the total of the amounts
described under (iv) and (v) above for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
-------------
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage
-------------
Note from time to time, net of any interest premium charged by the mortgagee
to obtain or maintain any Primary Insurance Policy.
Mortgaged Property: The underlying property securing a Mortgage
------------------
Loan, which, with respect to a Cooperative Loan, is the related Coop Shares
and Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
---------
National Cost of Funds Index: The National Monthly Median Cost
----------------------------
of Funds Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.
Net Prepayment Interest Shortfalls: As to any Distribution
----------------------------------
Date, the amount by which the aggregate of Prepayment Interest Shortfalls
during the related Prepayment Period exceeds an amount equal to one-half of
the aggregate Master Servicing Fee for such Distribution Date before
reduction of the Master Servicing Fee in respect of such Prepayment Interest
Shortfalls.
Non-Delay Certificates: As specified in the Preliminary
----------------------
Statement.
Non-Discount Mortgage Loan: Any Mortgage Loan with an Adjusted
--------------------------
Net Mortgage Rate that is greater than or equal to the Required Coupon.
Non-PO Formula Principal Amount: As to any Distribution Date,
-------------------------------
the sum of the applicable Non-PO Percentage of (a) the principal portion of
each Scheduled Payment (without giving effect, prior to the Bankruptcy
Coverage Termination Date, to any reductions thereof caused by any Debt
Service Reductions or Deficient Valuations) due on each Mortgage Loan on the
related Due Date, (b) the Stated Principal Balance of each Mortgage Loan that
was repurchased by the Seller or the Master Servicer pursuant to this
Agreement as of such Distribution Date, (c) the Substitution Adjustment
Amount in connection with any Deleted Mortgage Loan received with respect to
such Distribution Date, (d) any Insurance Proceeds or Liquidation Proceeds
allocable to recoveries of principal of Mortgage Loans that are not yet
Liquidated Mortgage Loans received during the calendar month preceding the
month of such Distribution Date, (e) with respect to each Mortgage Loan that
became a Liquidated Mortgage Loan during the calendar month preceding the
month of such Distribution Date, the amount of the Liquidation Proceeds
allocable to principal received during the calendar month preceding the month
of such Distribution Date with respect to such Mortgage Loan and (f) all
Principal Prepayments received during the related Prepayment Period.
Non-PO Percentage: As to any Discount Mortgage Loan, a fraction
-----------------
(expressed as a percentage) the numerator of which is the Adjusted Net
Mortgage Rate of such Discount Mortgage Loan and the denominator of which is
the Required Coupon. As to any Non-Discount Mortgage Loan, 100%.
Nonrecoverable Advance: Any portion of an Advance previously
----------------------
made or proposed to be made by the Master Servicer that, in the good faith
judgment of the Master Servicer, will not be ultimately recoverable by the
Master Servicer from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided
----------------------------
pursuant to Section 9.02 to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender thereof.
Notional Amount: With respect to any Distribution Date and the
---------------
Class X Certificates, the aggregate of the Stated Principal Balances of the
Non-Discount Mortgage Loans as of the Due Date in the month of such
Distribution Date (prior to giving effect to any Scheduled Payments due on
such Mortgage Loans on such Due Date).
Notional Amount Certificates: As specified in the Preliminary
----------------------------
Statement.
Offered Certificates: As specified in the Preliminary
--------------------
Statement.
Officer's Certificate: A certificate (i) signed by the Chairman
---------------------
of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President (however denominated), an Assistant Vice
President, the Treasurer, the Secretary, or one of the Assistant Treasurers
or Assistant Secretaries of the Depositor or the Master Servicer, or (ii), if
provided for in this Agreement, signed by a Servicing Officer, as the case
may be, and delivered to the Depositor and the Trustee, as the case may be,
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
------------------
counsel for the Depositor or the Master Servicer, including, in-house
counsel, reasonably acceptable to the Trustee; provided, however, that
-------- -------
with respect to the interpretation or application of the REMIC Provisions,
such counsel must (i) in fact be independent of the Depositor and the Master
Servicer, (ii) not have any direct financial interest in the Depositor or the
Master Servicer or in any affiliate of either, and (iii) not be connected
with the-Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the trust created
--------------------
hereunder in connection with the purchase of the Mortgage Loans pursuant to
Section 9.01(a) hereof.
Original Applicable Credit Support Percentage: With respect to
---------------------------------------------
each of the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
Class M 4.75%
Class B-1 2.50%
Class B-2 1.50%
Class B-3 .90%
Class B-4 .50%
Class B-5 .30%
Original Mortgage Loan: The mortgage loan refinanced in
----------------------
connection with the origination of a Refinancing Mortgage Loan.
Original Subordinated Principal Balance: The aggregate of the
---------------------------------------
Class Certificate Balances of the Subordinated Certificates as of the Closing
Date.
OTS: The Office of Thrift Supervision.
---
Outside Reference Date: As to any Interest Accrual Period for
----------------------
the COFI Certificates, the close of business on the tenth day thereof.
Outstanding: With respect to the Certificates as of any date of
-----------
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
-------------------------
with a Stated Principal Balance greater than zero-which was not the subject
of a Principal Prepayment in Full prior to such Due Date and which did not
become a Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any
------------------
ownership interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial.
Pass-Through Rate: For any interest bearing Class of
-----------------
Certificates or Component, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
-------------------
interest evidenced thereby in distributions required to be made on the
related Class, such percentage interest being set forth on the face thereof
or equal to the percentage obtained by dividing the Denomination of such
Certificate by the aggregate of the Denominations of all Certificates of the
same Class.
Permitted Investments: At any time, any one or more of the
---------------------
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each
Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial
paper and/or long term unsecured debt obligations of such
depository institution or trust company (or in the case of the
principal depository institution in a holding company system, the
commercial paper or long-term unsecured debt obligations of such
holding company, but only if Moody's is not a Rating Agency) are
then rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities, or
such lower ratings as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
either Rating Agency;
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation containing, at the time of
the issuance of such agreements, such terms and conditions as will
not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by either Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into with a depository institution or trust company (acting as
principal) described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or
any state thereof which, at the time of such investment, have one
of the two highest ratings of each Rating Agency (except if the
Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of Moody's for any such securities), or
such lower rating as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
either Rating Agency, as evidenced by a signed writing delivered by
each Rating Agency;
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if Fitch or Duff &
Phelps is a Rating Agency and has not rated the portfolio, the
highest rating assigned by Moody's) and restricted to obligations
issued or guaranteed by the United States of America or entities
whose obligations are backed by the full faith and credit of the
United States of America and repurchase agreements collateralized
by such obligations; and
(x) such other investments bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by either Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency.
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument.
Permitted Transferee: Any person other than (i) the United
--------------------
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives
described in section 521 of the Code) which is exempt from tax imposed by
Chapter 1 of the Code (including the tax imposed by section 511 of the Code
on unrelated business taxable income) on any excess inclusions (as defined in
section 860E(c)(l) of the Code) with respect to any Residual Certificate,
(iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of
the United States, a corporation, partnership, or other entity created or
organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust whose income from sources without
the United States is includible in gross income for United States federal
income tax purposes regardless of its connection with the conduct of a trade
or business within the United States unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service
Form 4224, and (vi) any other Person so designated by the Depositor based
upon an Opinion of Counsel that the Transfer of an Ownership Interest in a
Residual Certificate to such Person may cause the REMIC hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding. The
terms "United States," "State" and "International Organization" shall have
the meanings set forth in section 7701 of the Code or successor provisions.
A corporation will not be treated as an instrumentality of the United States
or of any State or political subdivision thereof for these purposes if all of
its activities are subject to tax and, with the exception of the Federal Home
Loan Mortgage Corporation, a majority of its board of directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization
or government, or any agency or political subdivision thereof.
Physical Certificate: As specified in the Preliminary
--------------------
Statement.
Planned Balance: Not applicable.
---------------
Planned Principal Classes: As specified in the Preliminary
-------------------------
Statement.
PO Formula Principal Amount: As to any Distribution Date, the
---------------------------
sum of the applicable PO Percentage of (a) the principal portion of each
Scheduled Payment (without giving effect, prior to the Bankruptcy Coverage
Termination Date, to any reductions thereof caused by any Debt Service
Reductions or Deficient Valuations) due on each Mortgage Loan on the related
Due Date, (b) the Stated Principal Balance of each Mortgage Loan that was
repurchased by the Seller or the Master Servicer pursuant to this Agreement
as of such Distribution Date, (c) the Substitution Adjustment Amount in
connection with any Deleted Mortgage Loan received with respect to such
Distribution Date, (d) any Insurance Proceeds or Liquidation Proceeds
allocable to recoveries of principal of Mortgage Loans that are not yet
Liquidated Mortgage Loans received during the calendar month preceding the
month of such Distribution Date, (e) with respect to each Mortgage Loan that
became a Liquidated Mortgage Loan during the month preceding the calendar
month of such Distribution Date, the amount of Liquidation Proceeds allocable
to principal received during the month preceding the month of such
Distribution Date with respect to such Mortgage Loan and (f) all Principal
Prepayments received during the related Prepayment Period.
PO Percentage: As to any Discount Mortgage Loan, a fraction
-------------
(expressed as a percentage) the numerator of which is the excess of the
Required Coupon over the Adjusted Net Mortgage Rate of such Discount Mortgage
Loan and the denominator of which is the Required Coupon. As to any
Non-Discount Mortgage Loan, 0%.
Pool Stated Principal Balance: As to any Distribution Date, the
-----------------------------
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month
of such Distribution Date.
Prepayment Interest Excess: As to any Principal Prepayment
--------------------------
received by the Master Servicer from the first day through the fifteenth day
of any calendar month (other than the calendar month in which the Cut-off
Date occurs), all amounts paid by the related Mortgagor in respect of
interest on such Principal Prepayment. All Prepayment Interest Excess shall
be paid to the Master Servicer as additional master servicing compensation.
Prepayment Interest Shortfall: As to any Distribution Date,
-----------------------------
Mortgage Loan and Principal Prepayment received on or after the sixteenth day
of the month preceding the month of such Distribution Date (or, in the case
of the first Distribution Date, on or after the Cut-off Date) and on or
before the last day of the month preceding the month of such Distribution
Date, the amount, if any, by which one month's interest at the related
Mortgage Rate, net of the Master Servicing Fee Rate, on such Principal
Prepayment exceeds the amount of interest paid in connection with such
Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period from
-----------------
the 16th day of the calendar month preceding the month of such Distribution
Date (or, in the case of the first Distribution Date, from the Cut-off Date)
through the 15th of the month of such Distribution Date.
Prepayment Shift Percentage: As to any Distribution Date
---------------------------
occurring during the five years beginning on the first Distribution Date, 0%.
Thereafter, the Prepayment Shift Percentage for any Distribution Date
occurring on or after the fifth anniversary of the first Distribution Date
will be as follows: for any Distribution Date in the first year thereafter,
30%; for any Distribution Date in the second year thereafter, 40%; for any
Distribution Date in the third year thereafter, 60%; for any Distribution Date
in the fourth year thereafter, 80%; and for any Distribution Date thereafter,
100%.
Primary Insurance Policy: Each policy of primary mortgage
------------------------
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Primary Planned Principal Classes: As specified in the
---------------------------------
Preliminary Statement.
Principal Prepayment: Any payment of principal by a Mortgagor
--------------------
on a Mortgage Loan that is received in advance of its scheduled Due Date and
is not accompanied by an amount representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Master Servicer in
accordance with the terms of the related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by
----------------------------
a Mortgagor of the entire principal balance of a Mortgage Loan.
Priority Amount: As to any Distribution Date, the amount equal
---------------
to the sum of (i) the product of (A) Scheduled Principal Distribution Amounts
(B) the Shift Percentage and (C) the Priority Percentage, each as of such
Distribution Date and (ii) the product of (A) Unscheduled Principal
Distribution Amounts, (B) the Prepayment Shift Percentage and (C) the
Priority Percentage, each as of such Distribution Date.
Priority Percentage: As to any Distribution Date, a fraction,
-------------------
the numerator of which is equal to the aggregate Class Certificate Balance of
the Class A-10 Certificates on such Distribution Date, and the denominator of
which is equal to the aggregate Class Certificate Balances of the
Certificates (other than the Class PO Certificates) on such Distribution
Date.
Private Certificate: As specified in the Preliminary Statement.
-------------------
Pro Rata Share: As to any Distribution Date, the Subordinated
--------------
Principal Distribution Amount and any Class of Subordinated Certificates, the
portion of the Subordinated Principal Distribution Amount allocable to such
Class, equal to the product of the Subordinated Principal Distribution Amount
on such Distribution Date and a fraction, the numerator of which is the
related Class Certificate Balance thereof and the denominator of which is the
aggregate of the Class Certificate Balances of the Subordinated Certificates.
Proprietary Lease: With respect to any Cooperative Unit, a lease
-----------------
or occupancy agreement between a Cooperative Corporation and a holder of
related Coop Shares.
Prospectus Supplement: The Prospectus Supplement dated January
---------------------
27, 1998 relating to the Offered Certificates.
PUD: Planned Unit Development.
---
Purchase Price: With respect to any Mortgage Loan required to
--------------
be purchased by the Seller pursuant to Section 2.02 or 2.03 hereof or
purchased at the option of the Master Servicer pursuant to Section 3.11, an
amount equal to the sum of (i) 100% of the unpaid principal balance of
the Mortgage Loan on the date of such purchase, and (ii) accrued interest
thereon at the applicable Mortgage Rate (or at the applicable Adjusted
Mortgage Rate if (x) the purchaser is the Master Servicer or (y) if the
purchaser is the Seller and the Seller is the Master Servicer) from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Purchase Price is to be distributed to Certificateholders.
Qualified Insurer: A mortgage guaranty insurance company duly
-----------------
qualified as such under the laws of the state of its principal place of
business and each state having jurisdiction over such insurer in connection
with the insurance policy issued by such insurer, duly authorized and
licensed in such states to transact a mortgage guaranty insurance business in
such states and to write the insurance provided by the insurance policy
issued by it, approved as a FNMA-approved mortgage insurer and having a
claims paying ability rating of at least "AA" or equivalent rating by a
nationally recognized statistical rating organization. Any replacement
insurer with respect to a Mortgage Loan must have at least as high a claims
paying ability rating as the insurer it replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the
-------------
Preliminary Statement. If any such organization or a successor is no longer
in existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating category of a Rating Agency shall mean
such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
-------------
an amount (not less than zero or more than the Stated Principal Balance of
the Mortgage Loan) as of the date of such liquidation, equal to (i) the
Stated Principal Balance of the Liquidated Mortgage Loan as of the date of
such liquidation, plus (ii) interest at the Adjusted Net Mortgage Rate from
the Due Date as to which interest was last paid or advanced (and not
reimbursed) to Certificateholders up to the Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan from time to time, minus (iii) the
Liquidation Proceeds, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the
Adjusted Net Mortgage Rate and to principal of the Liquidated Mortgage Loan.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, if the principal amount due under the related Mortgage
Note has been reduced, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation. With respect to each Mortgage Loan which has become the subject
of a Debt Service Reduction and any Distribution Date, the amount, if any, by
which the principal portion of the related Scheduled Payment has been
reduced.
Recognition Agreement: With respect to any Cooperative Loan, an
---------------------
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the
Cooperative Property.
Record Date: With respect to any Distribution Date, the close
-----------
of business on the last Business Day of the month preceding the month in
which such Distribution Date occurs.
Reference Bank: As defined in Section 4.05.
--------------
Refinancing Mortgage Loan: Any Mortgage Loan originated in
-------------------------
connection with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary
--------------------
Statement.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of
----------
1940, as amended.
Relief Act Reductions: With respect to any Distribution Date
---------------------
and any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended
calendar month is less than (ii) interest accrued thereon for such month
pursuant to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the
-----
meaning of section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final
-------------------
regulation, revenue ruling, revenue procedure or other official announcement
or interpretation relating to REMICs and the REMIC Provisions issued after
the Closing Date.
REMIC Provisions: Provisions of the federal income tax law
----------------
relating to real estate mortgage investment conduits, which appear at
sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and
related provisions, and regulations promulgated thereunder, as the foregoing
may be in effect from time to time as well as provisions of applicable state
laws.
REO Property: A Mortgaged Property acquired by the Trust Fund
------------
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Request for Release: The Request for Release submitted by the
-------------------
Master Servicer to the Trustee, substantially in the form of Exhibits M and
N, as appropriate.
Required Coupon: 6.50% per annum.
---------------
Required Insurance Policy: With respect to any Mortgage Loan,
-------------------------
any insurance policy that is required to be maintained from time to time
under this Agreement.
Residual Certificates: As specified in the Preliminary
---------------------
Statement.
Responsible Officer: When used with respect to the Trustee, any
-------------------
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also to whom, with respect to a particular matter,
such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
Restricted Classes: As defined in Section 4.02(e).
------------------
Scheduled Balances: Not applicable.
------------------
Scheduled Classes: As specified in the Preliminary Statement.
-----------------
Scheduled Payment: The scheduled monthly payment on a Mortgage
-----------------
Loan due on any Due Date allocable to principal and/or interest on such
Mortgage Loan which, unless otherwise specified herein, shall give effect to
any related Debt Service Reduction and any Deficient Valuation that affects
the amount of the monthly payment due on such Mortgage Loan.
Scheduled Principal Distribution Amount: As to any Distribution
---------------------------------------
Date, an amount equal to the sum of all amounts described in clauses (a)
through (d) of the definition of Non-PO Formula Principal Amount for such
Distribution Date; provided, however, that if a Bankruptcy Loss that is an
-------- -------
Excess Loss is sustained with respect to a Mortgage Loan that is not a
Liquidated Mortgage Loan, the Scheduled Principal Distribution Amounts will
be reduced on the related Distribution Date by the applicable Non-PO
Percentage of the principal portion of such Bankruptcy Loss.
Secondary Planned Principal Clauses: As specified in the
-----------------------------------
Preliminary Statement.
Securities Act: The Securities Act of 1933, as amended.
--------------
Seller: Countrywide Home Loans, Inc., a New York corporation,
------
and its successors and assigns, in its capacity as seller of the Mortgage
Loans to the Depositor.
Senior Certificates: As specified in the Preliminary Statement.
-------------------
Senior Credit Support Depletion Date: The date on which the
------------------------------------
Class Certificate Balance of each Class of Subordinated Certificates has been
reduced to zero.
Senior Percentage: As to any Distribution Date, the percentage
-----------------
equivalent of a fraction the numerator of which is the aggregate of the Class
Certificate Balances of each Class of Senior Certificates (other than Class
PO Certificates) as of such date and the denominator of which is the
aggregate of the Class Certificate Balances of all Classes of Certificates
(other than the Class PO Certificates) as of such date.
Senior Prepayment Percentage: For any Distribution Date during
----------------------------
the five years beginning on the first Distribution Date, 100%. The Senior
Prepayment Percentage for any Distribution Date occurring on or after the
fifth anniversary of the first Distribution Date will, except as provided
herein, be as follows: for any Distribution Date in the first year
thereafter, the Senior Percentage plus 70% of the Subordinated Percentage for
such Distribution Date; for any Distribution Date in the second year
thereafter, the Senior Percentage plus 60% of the Subordinated Percentage for
such Distribution Date; for any Distribution Date in the third year
thereafter, the Senior Percentage plus 40% of the Subordinated Percentage for
such Distribution Date; for any Distribution Date in the fourth year
thereafter, the Senior Percentage plus 20% of the Subordinated Percentage for
such Distribution Date; and for any Distribution Date thereafter, the Senior
Percentage for such Distribution Date (unless on any Distribution Date the
Senior Percentage exceeds the initial Senior Percentage, in which case the
Senior Prepayment Percentage for such Distribution Date will once again equal
100%). Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage will occur unless both of the Senior Step Down Conditions are
satisfied.
Senior Principal Distribution Amount: As to any Distribution
Date, the ------------------------------------ sum of (i) the
Senior Percentage of the applicable Non-PO Percentage of all amounts
described in clauses (a) through (d) of the definition of "Non-PO Formula
Principal Amount" for such Distribution Date, (ii) with respect to each
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the lesser of (x) the
Senior Percentage of the applicable Non-PO Percentage of the Stated
Principal Balance of such Mortgage Loan and (y) either (A) the Senior
Prepayment Percentage, or (B) if an Excess Loss was sustained with respect
to such Liquidated Mortgage Loan during such prior calendar month, the
Senior Percentage, of the applicable Non-PO Percentage of the amount of the
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan, and (iii) the Senior Prepayment Percentage of the applicable
Non-PO Percentage of the amounts described in clause (f) of the definition
of "Non-PO Formula Principal Amount" for such Distribution Date.
Senior Step Down Conditions: As of the first Distribution Date
---------------------------
as to which any decrease in the Senior Prepayment Percentage applies, (i) the
outstanding principal balance of all Mortgage Loans delinquent 60 days or
more (averaged over the preceding six month period), as a percentage of the
aggregate principal balance of the Subordinate Certificates on such
Distribution Date, does not equal or exceed 50% and (ii) cumulative Realized
Losses with respect to the Mortgage Loans do not exceed (a) with respect to
the Distribution Date on the fifth anniversary of the first Distribution
Date, 30% of the Original Subordinated Principal Balance, (b) with respect to
the Distribution Date on the sixth anniversary of the first Distribution
Date, 35% of the Original Subordinated Principal Balance, (c) with respect to
the Distribution Date on the seventh anniversary of the first Distribution
Date, 40% of the Original Subordinated Principal Balance, (d) with respect to
the Distribution Date on the eighth anniversary of the first Distribution
Date, 45% of the Original Subordinated Principal Balance and (e) with respect
to the Distribution Date on the ninth anniversary of the first Distribution
Date, 50% of the Original Subordinated Principal Balance.
Servicing Advances: All customary, reasonable and necessary
------------------
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any expenses reimbursable to the Master Servicer pursuant to
Section 3.11 and any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and
(iv) compliance with the obligations under Section 3.09.
Servicing Officer: Any officer of the Master Servicer involved
-----------------
in, or responsible for, the administration and servicing of the Mortgage
Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the Trustee by the Master Servicer on the Closing Date
pursuant to this Agreement, as such list may from time to time be amended.
Shift Percentage: As of any Distribution Date occurring during
----------------
the five years beginning on the first Distribution Date, 0% and for each
Distribution Date occurring on or after the fifth anniversary of the first
Distribution Date, 100%.
Special Hazard Coverage Termination Date: The point in time at
----------------------------------------
which the Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged
-------------------
Property on account of direct physical loss but not including (i) any loss
of a type covered by a hazard insurance policy or a flood insurance policy
required to be maintained with respect to such Mortgaged Property pursuant
to Section 3.09 to the extent of the amount of such loss covered thereby, or
n(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, $4,501,150. With respect to any Distribution Date after
the first Distribution Date, the lesser of (a) the greatest of (i) 1% of the
aggregate of the principal balances of the Mortgage Loans, (ii) twice the
principal balance of the largest Mortgage Loan and (iii) the aggregate of the
principal balances of all Mortgage Loans secured by Mortgaged Properties
located in the single California postal zip code area having the highest
aggregate principal balance of any such zip code area and (b) the Special
Hazard Loss Coverage Amount as of the Closing Date less the amount, if any,
of Special Hazard Losses allocated to the Certificates since the Closing
Date. All principal balances for the purpose of this definition will be
calculated as of the first day of the calendar month preceding the month of
such Distribution Date after giving effect to Scheduled Payments on the
Mortgage Loans then due, whether or not paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to
----------------------------
which a Special Hazard Loss has occurred.
S&P: Standard & Poor's Ratings Group, a division of the
---
McGraw-Hill Companies, Inc. If S&P is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for
notices to S&P shall be Standard & Poor's 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.
Startup Day: The Closing Date.
-----------
Stated Principal Balance: As to any Mortgage Loan and Due Date,
------------------------
the unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Liquidation Proceeds allocable to principal (other
than with respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Streamlined Documentation Mortgage Loan: Any Mortgage Loan
---------------------------------------
originated pursuant to the Seller's Streamlined Loan Documentation Program
then in effect.
Subordinated Certificates: As specified in the Preliminary
-------------------------
Statement.
Subordinated Percentage: As to any Distribution Date, 100%
-----------------------
minus the Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution
----------------------------------
Date, 100% minus the Senior Prepayment Percentage for such Distribution Date.
Subordinated Principal Distribution Amount: With respect to any
------------------------------------------
Distribution Date, an amount equal to (A) the sum of (i) the Subordinated
Percentage of the applicable Non-PO Percentage of all amounts described in
clauses (a) through (d) of the definition of "Non-PO Formula Principal
Amount" for such Distribution Date, (ii) with respect to each Mortgage Loan
that became a Liquidated Mortgage Loan during the calendar month preceding
the month of such Distribution Date, the applicable Non-PO Percentage of the
amount of the Liquidation Proceeds allocated to principal received with
respect thereto remaining after application thereof pursuant to clause (ii)
of the definition of Senior Principal Distribution Amount, up to the
Subordinated Percentage of the applicable Non-PO Percentage of the Stated
Principal Balance of such Mortgage Loan and (iii) the Subordinated Prepayment
Percentage of the applicable Non-PO Percentage of all amounts described in
clause (f) of the definition of "Non-PO Formula Principal Amount" for such
Distribution Date reduced by (B) the amount of any payments in respect of
Class PO Deferred Amounts on the related Distribution Date.
Subservicer: Any person to whom the Master Servicer has
-----------
contracted for the servicing of all or a portion of the Mortgage Loans
pursuant to Section 3.02 hereof.
Substitute Mortgage Loan: A Mortgage Loan substituted by the
------------------------
Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the
form of Exhibit M, (i) have a Stated Principal Balance, after deduction of
the principal portion of the Scheduled Payment due in the month of
substitution, not in excess of, and not more than 10% less than the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) be accruing interest at
a rate no lower than and not more than 1% per annum higher than, that of the
Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher than that
of the Deleted Mortgage Loan; (iv) have a remaining term to maturity no
greater than (and not more than one year less than that of) the Deleted
Mortgage Loan; (v) not be a Cooperative Loan unless the Deleted Mortgage Loan
was a Cooperative Loan and (vi) comply with each representation and warranty
set forth in Section 2.03 hereof.
Substitution Adjustment Amount: The meaning ascribed to such
------------------------------
term pursuant to Section 2.03.
Support Classes: As specified in the Preliminary Statement.
---------------
Targeted Balances: With respect to the Targeted Principal
-----------------
Classes and any Distribution Date appearing in Schedule IV hereto, the
applicable amount appearing opposite such Distribution Date for such
respective Class.
Targeted Principal Classes: As specified in the Preliminary
--------------------------
Statement.
Tax Matters Person: The person designated as "tax matters
------------------
person" in the manner provided under Treasury regulation 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 $0.05.
Transfer: Any direct or indirect transfer or sale of any
--------
Ownership Interest in a Residual Certificate.
Trustee: The Bank of New York and its successors and, if a
-------
successor trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
-----------
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per
----------------
annum rate agreed upon in writing on or prior to the Closing Date by the
Trustee and the Depositor.
Trust Fund: The corpus of the trust created hereunder
----------
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto after the Cut-off Date to the extent not applied
in computing the Cut-off Date Principal Balance thereof; (ii) the Certificate
Account and the Distribution Account all amounts deposited therein pursuant
to the applicable provisions of this Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure
or otherwise; and (v) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Unscheduled Principal Distribution Amount: As to any
-----------------------------------------
Distribution Date, an amount equal to the sum of (i) with respect to each
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the Non-PO Percentage of
the Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan and (ii) the applicable Non-PO Percentage of the amount
described in clause (f) of the definition of "Non-PO Formula Principal
Amount" for such Distribution Date.
Voting Rights: The portion of the voting rights of all of the
-------------
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to each Class
of Notional Amount Certificates, if any (such Voting Rights to be allocated
among the holders of Certificates of each such Class in accordance with their
respective Percentage Interests), and (b) the remaining Voting Rights (or
100% of the Voting Rights if there is no Class of Notional Amount
Certificates) shall be allocated among Holders of the remaining Classes of
Certificates in proportion to the Certificate Balances of their respective
Certificates on such date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
----------------------------
(a) The Seller, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to
the Depositor, without recourse, all the right, title and interest of the
Seller in and to the Mortgage Loans, including all interest and principal
received or receivable by the Seller on or with respect to the Mortgage Loans
after the Cut-off Date and all interest and principal payments on the
Mortgage Loans received prior to the Cut-off Date in respect of installments
of interest and principal due thereafter, but not including payments of
principal and interest due and payable on the Mortgage Loans on or before the
Cut-off Date. On or prior to the Closing Date, the Seller shall deliver to
the Depositor or, at the Depositor's direction, to the Trustee or other
designee of the Depositor, the Mortgage File for each Mortgage Loan listed in
the Mortgage Loan Schedule. Such delivery of the Mortgage Files shall be
made against payment by the Depositor of the purchase price, previously
agreed to by the Seller and Depositor, for the Mortgage Loans. With respect
to any Mortgage Loan that does not have a first payment date on or before the
Due Date in the month of the first Distribution Date, the Seller shall
deposit into the Distribution Account on or before the Distribution Account
Deposit Date relating to the first Distribution Date, an amount equal to one
month's interest at the related Adjusted Mortgage Rate on the Cut-off Date
Principal Balance of such Mortgage Loan.
(b) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to
the Trustee for the benefit of the Certificateholders, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund
together with the Depositor's right to require the Seller to cure any breach
of a representation or warranty made herein by the Seller or to repurchase or
substitute for any affected Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth in
clause (b) above, the Depositor has delivered or caused to be delivered to
the Trustee for the benefit of the Certificateholders the following documents
or instruments with respect to each Mortgage Loan so assigned:
(i) (A) the original Mortgage Note endorsed by manual or
facsimile signature in blank in the following form: "Pay to the
order of ____________ without recourse," with all intervening
endorsements showing a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note); or
(B) with respect to any Lost Mortgage Note, a lost note
affidavit from the Seller stating that the original Mortgage Note
was lost or destroyed, together with a copy of such Mortgage Note;
(ii) except as provided below, the original recorded Mortgage
or a copy of such
Mortgage certified by the Seller as being a true and complete copy
of the Mortgage;
(iii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together with,
except as provided below, all interim recorded assignments of such
mortgage (each such assignment, when duly and validly completed, to
be in recordable form and sufficient to effect the assignment of
and transfer to the assignee thereof, under the Mortgage to which
the assignment relates); provided that, if the related Mortgage has
not been returned from the applicable public recording office, such
assignment of the Mortgage may exclude the information to be
provided by the recording office;
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) except as provided below, the original or duplicate
original lender's title policy and all riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of the
following documents or instruments:
(a) The Coop Shares, together with a stock power in blank;
(b) The executed Security Agreement;
(c) The executed Proprietary Lease;
(d) The executed Recognition Agreement;
(e) The executed assignment of Recognition Agreement;
(f) The executed UCC-1 financing statement with evidence of
recording thereon which have been filed in all places required
to perfect the Seller's interest in the Coop Shares and the
Proprietary Lease; and
(g) Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee
with evidence of recording thereon (or in a form suitable for
recordation).
In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) the original recorded Mortgage, (b) all interim
recorded assignments or (c) the lender's title policy (together with all
riders thereto) satisfying the requirements of clause (ii), (iii) or (v)
above, respectively, concurrently with the execution and delivery hereof
because such document or documents have not been returned from the applicable
public recording office in the case of clause (ii) or (iii) above, or because
the title policy has not been delivered to either the Master Servicer or the
Depositor by the applicable title insurer in the case of clause (v) above,
the Depositor shall promptly deliver to the Trustee, in the case of clause
(ii) or (iii) above, such original Mortgage or such interim assignment, as
the case may be, with evidence of recording indicated thereon upon receipt
thereof from the public recording office, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery of the original Mortgage and each such interim assignment or a copy
thereof, certified, if appropriate, by the relevant recording office, be made
later than one year following the Closing Date, or, in the case of clause (v)
above, no later than 120 days following the Closing Date; provided, however,
-------- -------
in the event the Depositor is unable to deliver by such date each Mortgage
and each such interim assignment by reason of the fact that any such
documents have not been returned by the appropriate recording office, or, in
the case of each such interim assignment, because the related Mortgage has
not been returned by the appropriate recording office, the Depositor shall
deliver such documents to the Trustee as promptly as possible upon receipt
thereof and, in any event, within 720 days following the Closing Date. The
Depositor shall forward or cause to be forwarded to the Trustee (a) from
time to time additional original documents evidencing an assumption or
modification of a Mortgage Loan and (b) any other documents required to be
delivered by the Depositor or the Master Servicer to the Trustee. In the
event that the original Mortgage is not delivered and in connection with the
payment in full of the related Mortgage Loan and the public recording office
requires the presentation of a "lost instruments affidavit and indemnity" or
any equivalent document, because only a copy of the Mortgage can be
delivered with the instrument of satisfaction or reconveyance, the Master
Servicer shall execute and deliver or cause to be executed and delivered
such a document to the public recording office. In the case where a public
recording office retains the original recorded Mortgage or in the case where
a Mortgage is lost after recordation in a public recording office, the
Seller shall deliver to the Trustee a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the
Trustee shall (i) affix the Trustee's name to each assignment of Mortgage,
as the assignee thereof, (ii) cause such assignment to be in proper form for
recording in the appropriate public office for real property records and
(iii) cause to be delivered for recording in the appropriate public office
for real property records the assignments of the Mortgages to the Trustee,
except that, with respect to any assignments of Mortgage as to which the
Trustee has not received the information required to prepare such assignment
in recordable form, the Trustee's obligation to do so and to deliver the
same for such recording shall be as soon as practicable after receipt of
such information and in any event within thirty (30) days after receipt
thereof and that the Trustee need not cause to be recorded any assignment
which relates to a Mortgage Loan (a) the Mortgaged Property and Mortgage
File relating to which are located in California or (b) in any other
jurisdiction under the laws of which in the opinion of counsel the
recordation of such assignment is not necessary to protect the Trustee's and
the Certificateholders' interest in the related Mortgage Loan.
In the case of Mortgage Loans that have been prepaid in full as of
the Closing Date, the Depositor, in lieu of delivering the above documents
to the Trustee, will deposit in the Certificate Account the portion of such
payment that is required to be deposited in the Certificate Account pursuant
to Section 3.08 hereof.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
-------------------------------------------
The Trustee acknowledges receipt of the documents identified in
the Initial Certification in the form annexed hereto as Exhibit 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 hereof, if any, and any
substitution pursuant to (a) above shall not be effected prior to the
additional delivery to the Trustee of a Request for Release substantially in
the form of Exhibit N. No substitution is permitted to be made in any
calendar month after the Determination Date for such month. The Purchase
Price for any such Mortgage Loan shall be deposited by the Seller in the
Certificate Account on or prior to the Distribution Account Deposit Date for
the Distribution Date in the month following the month of repurchase and,
upon receipt of such deposit and certification with respect thereto in the
form of Exhibit N hereto, the Trustee shall release the related Mortgage
File to the Seller and shall execute and deliver at the Seller's request
such instruments of transfer or assignment prepared by the Seller, in each
case without recourse, as shall be necessary to vest in the Seller, or a
designee, the Trustee's interest in any Mortgage Loan released pursuant
hereto.
The Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. The Master Servicer shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File as come into the possession of
the Master Servicer from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 above shall constitute the sole remedy
respecting such defect available to the Trustee, the Depositor and any
Certificateholder against the Seller.
SECTION 2.03. Representations, Warranties and Covenants of the
------------------------------------------------
Seller and Master Servicer.
--------------------------
(a) Countrywide Home Loans, Inc., in its capacities as Seller and
Master Servicer, hereby makes the representations and warranties set forth
in Schedule II hereto, and by this reference incorporated herein, to the
Depositor and the Trustee, as of the Closing Date, or if so specified
therein, as of the Cut-off Date.
(b) The Seller, in its capacity as Seller, hereby makes the
representations and warranties set forth in Schedule III hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties. The Seller hereby covenants that within 90
days of the earlier of its discovery or its receipt of written notice from
any party of a breach of any representation or warranty made pursuant to
Section 2.03(b) which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects, and if such breach is not so cured, shall, (i) if such
90- day period expires prior to the second anniversary of the Closing Date,
remove such Mortgage Loan (a "Deleted Mortgage Loan")
---------------------
from the Trust Fund and substitute in its place a Substitute Mortgage Loan,
in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the
Trustee at the Purchase Price in the manner set forth below; provided,
however, that any such substi- tution pursuant to (i) above shall --------
------- not be effected prior to the delivery to the Trustee of the Opinion
of Counsel required by Section 2.05 hereof, if any, and any such
substitution pursuant to (i) above shall not be effected prior to the
additional delivery to the Trustee of a Request for Release substantially in
the form of Exhibit N and the Mortgage File for any such Substitute Mortgage
Loan. The Seller shall promptly reimburse the Master Servicer and the
Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. With respect
to the representations and warranties described in this Section which are
made to the best of the Seller's knowledge, if it is discovered by either
the Depositor, the Seller or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interests of
the Certificateholders therein, notwithstanding the Seller's lack of
knowledge with respect to the substance of such representation or warranty,
such inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Substitute Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the Certificateholders the
Mortgage Note, the Mortgage, the related assignment of the Mortgage, and
such other documents and agreements as are required by Section 2.01, with
the Mortgage Note endorsed and the Mortgage assigned as required by Section
2.01. No substitution is permitted to be made in any calendar month after
the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the month of substitution shall not be part
of the Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such month and thereafter the Seller shall be entitled to
retain all amounts received in respect of such Deleted Mortgage Loan. The
Master Servicer shall amend the Mortgage Loan Schedule for the benefit of
the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Substitute Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute Mortgage Loan or Loans shall be
subject to-the terms of this Agreement in all respects, and the Seller shall
be deemed to have made with respect to such Substitute Mortgage Loan or
Loans, as of the date of substitution, the representations and warranties
made pursuant to Section 2.03(b) with respect to such Mortgage Loan. Upon
any such substitution and the deposit to the Certificate Account of the
amount required to be deposited therein in connection with such substitution
as described in the following paragraph, the Trustee shall release the
Mortgage File held for the benefit of the Certificateholders relating to
such Deleted Mortgage Loan to the Seller and shall execute and deliver at
the Seller's direction such instruments of transfer or assignment prepared
by the Seller, in each case without recourse, as shall be necessary to vest
title in the Seller, or its designee, the Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Substitute Mortgage Loans as of the date of substitution
is less than the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans (after application of the scheduled principal portion of the
monthly payments due in the month of substitution). The amount of such
shortage (the "Substitution Adjustment Amount") plus an
------------------------------
amount equal to the aggregate of any unreimbursed Advances with respect to
such Deleted Mortgage Loans shall be deposited in the Certificate Account by
the Seller on or before the Distribution Account Deposit Date for the
Distribution Date in the month succeeding the calendar month during which
the related Mortgage Loan became required to be purchased or replaced
hereunder.
In the event that the Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate
Account pursuant to Section 3.05 on or before the Distribution Account
Deposit Date for the Distribution Date in the month following the month
during which the Seller became obligated hereunder to repurchase or replace
such Mortgage Loan and upon such deposit of the Purchase Price, the delivery
of the Opinion of Counsel required by Section 2.05 and receipt of a Request
for Release in the form of Exhibit N hereto, the Trustee shall release the
related Mortgage File held for the benefit of the Certificateholders to such
Person, and the Trustee shall execute and deliver at such Person's direction
such instruments of transfer or assignment prepared by such Person, in each
case without recourse, as shall be necessary to transfer title from the
Trustee. It is understood and agreed that the obligation under this
Agreement of any Person to cure, repurchase or replace any Mortgage Loan as
to which a breach has occurred and is continuing shall constitute the sole
remedy against such Persons respecting such breach available to
Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Mortgage Files to the Trustee
for the benefit of the Certificateholders.
SECTION 2.04. Representations and Warranties of the Depositor
-----------------------------------------------
as to the Mortgage Loans.
------------------------
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the date hereof or such other date set
forth herein that as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the
Mortgage Loans and the Mortgage Notes were subject to no offsets, defenses
or counterclaims.
The Depositor hereby assigns, transfers and conveys to the Trustee
all of its rights with respect to the Mortgage Loans including, without
limitation, the representations and warranties of the Seller made pursuant
to Section 2.03(b) hereof, together with all rights of the Depositor to
require the Seller to cure any breach thereof or to repurchase or substitute
for any affected Mortgage Loan in accordance with this Agreement.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the
Trustee of a breach of any of the foregoing representations and warranties
set forth in this Section 2.04 (referred to herein as a "breach"), which
breach materially and adversely affects the interest of the
Certificateholders, the party discovering such breach shall give prompt
written notice to the others and to each Rating Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
-------------------------------------------------
Substitutions.
-------------
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or Section 2.03 shall be made more
than 90 days after the Closing Date unless the Seller delivers to the
Trustee an Opinion of Counsel, which Opinion of Counsel shall not be at the
expense of either the Trustee or the Trust Fund, addressed to the Trustee,
to the effect that such substitution will not (i) result in the imposition
of the tax on "prohibited transactions" on the Trust Fund or contributions
after the Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the
Code, respectively, or (ii) cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Master
Servicer, or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code,
the party discovering such fact shall promptly (and in any event within five
(5) Business Days of discovery) give written notice thereof to the other
parties. In connection therewith, the Trustee shall require the Seller, at the
Seller's option, to either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Substitute Mortgage
Loan for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage
Loan within 90 days of such discovery in the same manner as it would a
Mortgage Loan for a breach of representation or warranty made pursuant to
Section 2.03. The Trustee shall reconvey to the Seller the Mortgage Loan to
be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
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 Subservicers as provided in Section 3.02 hereof,
to do or cause to be done any and all things that it may deem necessary or
desirable in connection with such servicing and administration, including
but not limited to, the power and authority, subject to the terms hereof (i)
to execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages (but only in the manner provided in
this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan;
provided that the Master Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Master Servicer shall represent and protect the interests of the Trust Fund
in the same manner as it protects its own interests in mortgage loans in its
own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan, and shall not make or permit any modification, waiver or amendment of
any Mortgage Loan which would cause the Trust Fund to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860F(a) or
Section 860G(d) of the Code. Without limiting the generality of the
foregoing, the Master Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Master Servicer believes it appropriate
in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release
or discharge and all other comparable instruments, with respect to the
Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Master Servicer shall prepare and
deliver to the Depositor and/or the Trustee such documents requiring
execution and delivery by either or both of them as are necessary or
appropriate to enable the Master Servicer to service and administer the
Mortgage Loans to the extent that the Master Servicer is not permitted to
execute and deliver such documents pursuant to the preceding sentence. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute
such documents and deliver them to the Master Servicer.
In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the
Mortgaged Properties, which advances shall be reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section
3.06, and further as provided in Section 3.08. The costs incurred by the
Master Servicer, if any, in effecting the timely payments of taxes and
assessments on the Mortgaged Properties and related insurance premiums shall
not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balances of the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
SECTION 3.02. Subservicing; Enforcement of the Obligations of
-----------------------------------------------
Servicers.
---------
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a Subservicer pursuant to a subservicing agreement;
provided, however, that such subservicing arrangement and the terms of the
- -------- ------- related subservicing agreement must provide for the
servicing of such Mortgage Loans in a manner consistent with the servicing
arrangements contemplated hereunder. Unless the context otherwise requires,
references in this Agreement to actions taken or to be taken by the Master
Servicer in servicing the Mortgage Loans include actions taken or to be
taken by a Subservicer on behalf of the Master Servicer. Notwithstanding
the provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer
and a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue
of such subservicing agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the
same terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. All actions of each Subservicer performed
pursuant to the related subservicing agreement shall be performed as an
agent of the Master Servicer with the same force and effect as if performed
directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be
deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a Subservicer regardless of
whether such payments are remitted by the Subservicer to the Master Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in
------------------------------------------
Respect of the Master Servicer.
------------------------------
The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated
to, perform, or cause a designee to perform, any defaulted obligation of the
Master Servicer hereunder and in connection with any such defaulted
obligation to exercise the related rights of the Master Servicer hereunder;
provided that the Master Servicer shall not be relieved of any of its
obligations hereunder by virtue of such performance by the Depositor or its
designee. Neither the Trustee nor the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer nor shall the Trustee or the Depositor be obligated to supervise
the performance of the Master Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Master Servicer.
---------------------------------
In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its successor shall thereupon assume all of the
rights and obligations of the Master Servicer hereunder arising thereafter
(except that the Trustee shall not be (i) liable for losses of the Master
Servicer pursuant to Section 3.09 hereof or any acts or omissions of the
predecessor Master Servicer hereunder), (ii) obligated to make Advances if
it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder
including, but not limited to, repurchases or substitutions of Mortgage
Loans pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for
expenses of the Master Servicer pursuant to Section 2.03 or (v) deemed to
have made any representations and warranties of the Master Servicer
hereunder). Any such assumption shall be subject to Section 7.02 hereof.
If the Master Servicer shall for any reason no longer be the Master Servicer
(including by reason of any Event of Default), the Trustee or its successor
shall succeed to any rights and obligations of the Master Servicer under
each subservicing agreement.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement or substitute
subservicing agreement and the Mortgage Loans then being serviced thereunder
and an accounting of amounts collected or held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of the substitute
subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate
-------------------------------------------------
Account; Distribution Account.
-----------------------------
(a) The Master Servicer shall make reasonable efforts in
accordance with the customary and usual standards of practice of prudent
mortgage servicers to collect all payments called for under the terms and
provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or any
prepayment charge or penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) extend the due dates for payments due on a Mortgage
Note for a period not greater than 180 days; provided, however,
-------- -------
that the Master Servicer cannot extend the maturity of any such Mortgage
Loan past the date on which the final payment is due on the latest maturing
Mortgage Loan as of the Cut-off Date. In the event of any such arrangement,
the Master Servicer shall make Advances on the related Mortgage Loan in
accordance with the provisions of Section 4.01 during the scheduled period
in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. The Master Servicer
shall not be required to institute or join in litigation with respect to
collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the
provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to
be deposited on a daily basis within one Business Day of receipt, except as
otherwise specifically provided herein, the following payments and
collections remitted by Subservicers or received by it in respect of
Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest due on the Mortgage Loans on or before the Cut-off
Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net of the related Master Servicing Fee;
(iii) all Insurance Proceeds and Liquidation Proceeds, other
than proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.09(b), 3.09(d), and in respect of net monthly
rental income from REO Property pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to
Section 4.01; and
(viii) any other amounts required to be deposited hereunder.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to
the monthly payment remitted by the Mortgagor, the Master Servicer shall
cause funds to be deposited into the Certificate Account in an amount
required to cause an amount of interest to be paid with respect to such
Mortgage Loan equal to the amount of interest that has accrued on such
Mortgage Loan from the preceding Due Date at the Mortgage Rate net of the
related Master Servicing Fee on such date.
The foregoing requirements for remittance by the Master Servicer shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of prepayment penalties,
late payment charges or assumption fees, if collected, need not be remitted
by the Master Servicer. In the event that the Master Servicer shall remit
any amount not required to be remitted, it may at any time withdraw or
direct the institution maintaining the Certificate Account to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the Trustee or such other institution
maintaining the Certificate Account which describes the amounts deposited in
error in the Certificate Account. The Master Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this
Section. All funds deposited in the Certificate Account shall be held in
trust for the Certificateholders until withdrawn in accordance with Section
3.08.
(c) (Reserved)
(d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly
upon receipt, deposit in the Distribution Account and retain therein the
following:
(i) the aggregate amount remitted by the Master Servicer to the
Trustee pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Master Servicer pursuant to
Section 3.05(d) in connection with any losses on Permitted Investments;
and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
an Officer's Certificate to the Trustee which describes the amounts
deposited in error in the Distribution Account. All funds deposited in the
Distribution Account shall be held by the Trustee in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee
incur liability for withdrawals from the Distribution Account at the
direction of the Master Servicer.
(e) Each institution at which the Certificate Account or the
Distribution Account is maintained shall invest the funds therein as
directed in writing by the Master Servicer in Permitted Investments, which
shall mature not later than (i) in the case of the Certificate Account, the
second Business Day next preceding the related Distribution Account Deposit
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such account, then such Permitted Investment
shall mature not later than the Business Day next preceding such
Distribution Account Deposit Date) and (ii) in the case of the Distribution
Account, the Business Day next preceding the Distribution Date (except that
if such Permitted Investment is an obligation of the institution that
maintains such fund or account, then such Permitted Investment shall mature
not later than such Distribution Date) and, in each case, shall not be sold
or disposed of prior to its maturity. All such Permitted Investments shall
be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any
such investment of funds on deposit in the Certificate Account or the
Distribution Account shall be for the benefit of the Master Servicer as
servicing compensation and shall be remitted to it monthly as provided
herein. The amount of any realized losses in the Certificate Account or the
Distribution Account incurred in any such account in respect of any such
investments shall promptly be deposited by the Master Servicer in the
Certificate Account or paid to the Trustee for deposit into the Distribution
Account, as applicable. The Trustee in its fiduciary capacity shall not be
liable for the amount of any loss incurred in respect of any investment or
lack of investment of funds held in the Certificate Account or the
Distribution Account and made in accordance with this Section 3.05.
(f) The Master Servicer shall give notice to the Trustee, the
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account prior to any change thereof. The
Trustee shall give notice to the Master Servicer, the Seller, each Rating
Agency and the Depositor of any proposed change of the location of the
Distribution Account prior to any change thereof.
SECTION 3.06. Collection of Taxes, Assessments and Similar
--------------------------------------------
Items; Escrow Accounts.
----------------------
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Master Servicer shall establish and maintain
one or more accounts (each, an "Escrow Account") and deposit and retain
therein all collections from the Mortgagors (or advances by the Master
Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Master Servicer to compel a Mortgagor to establish an Escrow
Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable
items, to reimburse the Master Servicer out of related collections for any
payments made pursuant to Sections 3.01 hereof (with respect to taxes and
assessments and insurance premiums) and 3.09 hereof (with respect to hazard
insurance), to refund to any Mortgagors any sums determined to be overages,
to pay interest, if required by law or the terms of the related Mortgage or
Mortgage Note, to Mortgagors on balances in the Escrow Account or to clear
and terminate the Escrow Account at the termination of this Agreement in
accordance with Section 9.01 hereof. The Escrow Accounts shall not be a
part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to in
Section 3.06(a) that are not timely paid by the Mortgagors on the date when
the tax, premium or other cost for which such payment is intended is due,
but the Master Servicer shall be required so to advance only to the extent
that such advances, in the good faith judgment of the Master Servicer, will
be recoverable by the Master Servicer out of Insurance Proceeds, Liquidation
Proceeds or otherwise.
SECTION 3.07. Access to Certain Documentation and Information
-----------------------------------------------
Regarding the Mortgage Loans.
----------------------------
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage
Loans and all accounts, insurance information and other matters relating to
this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the office designated
by the Master Servicer.
Upon reasonable advance notice in writing, the Master Servicer
will provide to each Certificateholder which is a savings and loan
association, bank or insurance company certain reports and reasonable access
to information and documentation regarding the Mortgage Loans sufficient to
permit such Certificateholder to comply with applicable regulations of the
OTS or other regulatory authorities with respect to investment in the
Certificates; provided that the Master Servicer shall be entitled to be
reimbursed by each such Certificateholder for actual expenses incurred by
the Master Servicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate
------------------------------------------
Account and Distribution Account.
--------------------------------
(a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously
retained by the Master Servicer) the servicing compensation to which it
is entitled pursuant to Section 3.14, and to pay to the Master Servicer,
as additional servicing compensation, earnings on or investment income
with respect to funds in or credited to the Certificate Account;
(ii) to reimburse the Master Servicer for unreimbursed Advances
made by it, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on the Mortgage Loan(s) in respect of
which any such Advance was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer for Insured Expenses from
the related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a) unreimbursed
Servicing Advances, the Master Servicer's right to reimbursement
pursuant to this clause (a) with respect to any Mortgage Loan being
limited to amounts received on such Mortgage Loan(s) which represent
late recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.06 and (b) for unpaid Master
Servicing Fees as provided in Section 3.11 hereof;
(vi) to pay to the purchaser, with respect to each Mortgage Loan
or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received thereon
after the date of such purchase;
(vii) to reimburse the Seller, the Master Servicer or the
Depositor for expenses incurred by any of them and reimbursable pursuant
to Section 6.03 hereof;
(viii) to withdraw any amount deposited in the Certificate
Account and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the related Available Funds and the Trustee
Fee for such Distribution Date and remit such amount to the Trustee for
deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
The Master Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to such subclauses (i),
(ii), (iv), (v) and (vi). Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master
Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
Loans(s), and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for distributions to Certificateholders, in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of
any taxes that it is authorized to withhold pursuant to the last paragraph
of Section 8.11). In addition, the Trustee may from time to time make
withdrawals from the Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related Distribution
Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds in
the Distribution Account;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited
therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
-----------------------------------------------
Primary Insurance Policies.
--------------------------
(a) The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is
at least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (y) the
outstanding principal balance of the Mortgage Loan and (z) an amount such
that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. Each such policy
of standard hazard insurance shall contain, or have an accompanying
endorsement that contains, a standard mortgagee clause. Any amounts
collected by the Master Servicer under any such policies (other than the
amounts to be applied to the restoration or repair of the related Mortgaged
Property or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the
Certificate Account. Any cost incurred by the Master Servicer in
maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the
Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such
costs shall be recoverable by the Master Servicer out of late payments by
the related Mortgagor or out of Liquidation Proceeds to the extent permitted
by Section 3.08 hereof. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained
on property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property is
located at the time of origination of the Mortgage Loan in a federally
designated special flood hazard area and such area is participating in the
national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the least of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value
of the improvements which are part of such Mortgaged Property, and (iii) the
maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program.
(b) In the event that the Master Servicer shall obtain and
maintain a blanket policy insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section, it being
understood and agreed that such policy may contain a deductible clause on
terms substantially equivalent to those commercially available and
maintained by comparable servicers. If such policy contains a deductible
clause, the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property a policy complying with
the first sentence of this Section, and there shall have been a loss that
would have been covered by such policy, deposit in the Certificate Account
the amount not otherwise payable under the blanket policy because of such
deductible clause. In connection with its activities as Master Servicer of
the Mortgage Loans, the Master Servicer agrees to present, on behalf of
itself, the Depositor, and the Trustee for the benefit of the
Certificateholders, claims under any such blanket policy.
(c) The Master Servicer shall not take any action which would
result in non-coverage under any applicable Primary Insurance Policy of any
loss which, but for the actions of the Master Servicer, would have been
covered thereunder. The Master Servicer shall not cancel or refuse to renew
any such Primary Insurance Policy that is in effect at the date of the
initial issuance of the Certificates and is required to be kept in force
hereunder unless the replacement Primary Insurance Policy for such canceled
or non-renewed policy is maintained with a Qualified Insurer. The Master
Servicer shall not be required to maintain any Primary Insurance Policy (i)
with respect to any Mortgage Loan with a Loan-to-Value Ratio less than or
equal to 80% as of any date of determination or, based on a new appraisal,
the principal balance of such Mortgage Loan represents 80% or less of the
new appraised value or (ii) if maintaining such Primary Insurance Policy is
prohibited by applicable law. The Master Servicer agrees to effect the
timely payment of the premiums on each Primary Insurance Policy, and such
costs not otherwise recoverable shall be recoverable by the Master Servicer
from the related liquidation proceeds.
(d) In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present on behalf of itself,
the Trustee and Certificateholders, claims to the insurer under any Primary
Insurance Policies and, in this regard, to take such reasonable action as
shall be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted Mortgage Loans. Any amounts collected by the Master
Servicer under any Primary Insurance Policies shall be deposited in the
Certificate Account.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
----------------------------------------------
Agreements.
----------
(a) Except as otherwise provided in this Section, when any
property subject to a Mortgage has been conveyed by the Mortgagor, the
Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to
exercise such rights with respect to a Mortgage Loan if the Person to whom
the related Mortgaged Property has been conveyed or is proposed to be
conveyed satisfies the terms and conditions contained in the Mortgage Note
and Mortgage related thereto and the consent of the mortgagee under such
Mortgage Note or Mortgage is not otherwise so required under such Mortgage
Note or Mortgage as a condition to such transfer. In the event that the
Master Servicer is prohibited by law from enforcing any such due-on-sale
clause, or if coverage under any Required Insurance Policy would be
adversely affected, or if nonenforcement is otherwise permitted hereunder,
the Master Servicer is authorized, subject to Section 3.10(b), to take or
enter into an assumption and modification agreement from or with the person
to whom such property has been or is about to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, unless prohibited by
applicable state law, the Mortgagor remains liable thereon, provided that
the Mortgage Loan shall continue to be covered (if-so covered before the
Master Servicer enters such agreement) by the applicable Required Insurance
Policies. The Master Servicer, subject to Section 3.10(b), is also
authorized with the prior approval of the insurers under any Required
Insurance Policies to enter into a substitution of liability agreement with
such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable
under the Mortgage Note. Notwithstanding the foregoing, the Master Servicer
shall not be deemed to be in default under this Section by reason of any
transfer or assumption which the Master Servicer reasonably believes it is
restricted by law from preventing, for any reason whatsoever.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.10(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a
Mortgagor, and such Person is to enter into an assumption agreement or
modification agreement or supplement to the Mortgage Note or Mortgage that
requires the signature of the Trustee, or if an instrument of release signed
by the Trustee is required releasing the Mortgagor from liability on the
Mortgage Loan, the Master Servicer shall prepare and deliver or cause to be
prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to
whom the Mortgaged Property is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such
Person. In connection with any such assumption, no material term of the
Mortgage Note may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. Together with each such
substitution, assumption or other agreement or instrument delivered to the
Trustee for execution by it, the Master Servicer shall deliver an Officer's
Certificate signed by a Servicing Officer stating that the requirements of
this subsection have been met in connection therewith. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement
has been completed by forwarding to the Trustee the original of such
substitution or assumption agreement, which in the case of the original
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. Any fee collected by
the Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans;
------------------------------------------
Repurchase of Certain Mortgage Loans.
------------------------------------
The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of
the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments.
In connection with such foreclosure or other conversion, the Master
Servicer shall follow such practices and procedures as it shall deem
necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities and meet the requirements of the insurer under
any Required Insurance Policy; provided, however, that
-------- -------
the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Certificate Account).
The Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however,
-------- -------
that it shall be entitled to reimbursement thereof from the liquidation
proceeds with respect to the related Mortgaged Property, as provided in the
definition of Liquidation Proceeds. If the Master Servicer has knowledge
that a Mortgaged Property which the Master Servicer is contemplating
acquiring in foreclosure or by deed in lieu of foreclosure is located within
a 1 mile radius of any site listed in the Expenditure Plan for the Hazardous
Substance Clean Up Bond Act of 1984 or other site with environmental or
hazardous waste risks known to the Master Servicer, the Master Servicer
will, prior to acquiring the Mortgaged Property, consider such risks and
only take action in accordance with its established environmental review
procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders.
The Trustee's name shall be placed on the title to such REO Property solely
as the Trustee hereunder and not in its individual capacity. The Master
Servicer shall ensure that the title to such REO Property references the
Pooling and Servicing Agreement and the Trustee's capacity thereunder.
Pursuant to its efforts to sell such REO Property, the Master Servicer shall
either itself or through an agent selected by the Master Servicer protect
and conserve such REO Property in the same manner and to such extent as is
customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master
Servicer deems to be in the best interest of the Certificateholders for the
period prior to the sale of such REO Property. The Master Servicer shall
prepare for and deliver to the Trustee a statement with respect to each REO
Property that has been rented showing the aggregate rental income received
and all expenses incurred in connection with the management and maintenance
of such REO Property at such times as is necessary to enable the Trustee to
comply with the reporting requirements of the REMIC Provisions. The net
monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding required by Sections 1445 and 6050J of the Code with respect to
foreclosures and abandonments, the tax reporting required by Section 6050H
of the Code with respect to the receipt of mortgage interest from
individuals and any tax reporting required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities,
by preparing such tax and information returns as may be required, in the
form required, and delivering the same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged Property
as aforesaid or otherwise in connection with a default or imminent default
on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged
Property prior to two years after its acquisition by the Trust Fund unless
the Trustee shall have been supplied with an Opinion of Counsel to the
effect that the holding by the Trust Fund of such Mortgaged Property
subsequent to such two-year period will not result in the imposition of
taxes on "prohibited transactions" of any REMIC hereunder as defined in
section 860F of the Code or cause any REMIC hereunder to fail to qualify as
a REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel). Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or otherwise used
for the production of income by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would (i) cause such Mortgaged Property
to fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject any REMIC hereunder to the imposition
of any federal, state or local income taxes on the income earned from such
Mortgaged Property under Section 860G(c) of the Code or otherwise, unless
the Master 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, Advances and
Servicing Advances, shall be applied to the payment of principal of and
interest on the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited
into the Certificate Account. To the extent the net income received during
any calendar month is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan for such calendar month, such excess shall be considered to be
a partial prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
any income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Master Servicer for any related
unreimbursed Servicing Advances and Master Servicing Fees; second, to
reimburse the Master Servicer for any unreimbursed Advances; third, to
reimburse the Certificate Account for any Nonrecoverable Advances (or
portions thereof) that were previously withdrawn by the Master Servicer
pursuant to Section 3.08(a)(iii) that related to such Mortgage Loan; fourth,
to accrued and unpaid interest (to the extent no Advance has been made for
such amount or any such Advance has been reimbursed) on the Mortgage Loan or
related REO Property, at the Adjusted Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed;
and fifth, as a recovery of principal of the Mortgage Loan. Excess
Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will be
retained by the Master Servicer as additional servicing compensation
pursuant to Section 3.14.
The Master Servicer, in its sole discretion, shall have the right
to purchase for its own account from the Trust Fund any Mortgage Loan which
is 91 days or more delinquent at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited
in the Certificate Account and the Trustee, upon receipt of a certificate
from the Master Servicer in the form of Exhibit N hereto, shall release or
cause to be released to the purchaser of such Mortgage Loan the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the purchaser of such Mortgage Loan, in each case
without recourse, as shall be necessary to vest in the purchaser of such
Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser
of such Mortgage Loan shall succeed to all the Trustee's right, title and
interest in and to such Mortgage Loan and all security and documents related
thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security and documents, free of any further
obligation to the Trustee or the Certificateholders with respect thereto.
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee by delivering, or causing to be delivered a
"Request for Release" substantially in the form of Exhibit N. Upon receipt
of such request, the Trustee shall promptly release the related Mortgage
File to the Master Servicer, and the Trustee shall at the Master Servicer's
direction execute and deliver to the Master Servicer the request
for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage in each
case provided by the Master Servicer, together with the Mortgage Note
with written evidence of cancellation thereon. Expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance
shall be chargeable to the related Mortgagor. From time to time and
as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of
flood insurance, any fidelity bond or errors or omissions policy, or for the
purposes of effecting a partial release of any Mortgaged Property from the
lien of the Mortgage or the making of any corrections to the Mortgage Note
or the Mortgage or any of the other documents included in the Mortgage File,
the Trustee shall, upon delivery to the Trustee of a Request for Release in
the form of Exhibit M signed by a Servicing Officer, release the Mortgage
File to the Master Servicer. Subject to the further limitations set forth
below, the Master Servicer shall cause the Mortgage File or documents so
released to be returned to the Trustee when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the Certificate Account, in which case the
Master Servicer shall deliver to the Trustee a Request for Release in the
form of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this
Agreement, the Master Servicer shall deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure
or any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to
enforce any other remedies or rights provided by the Mortgage Note or the
Mortgage or otherwise available at law or in equity.
SECTION 3.13. Documents Records and Funds in Possession of
--------------------------------------------
Master Servicer to be Held for the Trustee.
------------------------------------------
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully
to the Trustee for any funds received by the Master Servicer or which
otherwise are collected by the Master Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including but not limited
to, any funds on deposit in the Certificate Account, shall be held by the
Master Servicer for and on behalf of the Trustee and shall be and remain the
sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. The Master Servicer also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are
deposited in the Certificate Account, Distribution Account or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance,
or assert by legal action or otherwise any claim or right of setoff against
any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Master Servicer shall be entitled
to set off against and deduct from any such funds any amounts that are
properly due and payable to the Master Servicer under this Agreement.
SECTION 3.14. Servicing Compensation.
----------------------
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain or withdraw from the Certificate Account an
amount equal to the Master Servicing Fee for each Mortgage Loan, provided
that the aggregate Master Servicing Fee with respect to any Distribution
Date shall be reduced (i) by an amount equal to the aggregate of the
Prepayment Interest Shortfalls, if any, with respect to such Distribution
Date, but not below an amount equal to one-half of the aggregate Master
Servicing Fee for such Distribution Date before reduction thereof in respect
of such Prepayment Interest Shortfalls, and (ii) with respect to the first
Distribution Date, an amount equal to any amount to be deposited into the
Distribution Account by the Depositor pursuant to Section 2.01(a) and not so
deposited.
Additional servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, prepayment penalties, assumption fees, late
payment charges and all income and gain net of any losses realized from
Permitted Investments shall be retained by the Master Servicer to the extent
not required to be deposited in the Certificate Account pursuant to Section
3.05 hereof. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its master servicing activities hereunder
(including payment of any premiums for hazard insurance and any Primary
Insurance Policy and maintenance of the other forms of insurance coverage
required by this Agreement) and shall not be entitled to reimbursement
therefor except as specifically provided in this Agreement.
SECTION 3.15. Access to Certain Documentation.
-------------------------------
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinated
Certificates and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the
Mortgage Loans required by applicable regulations of the OTS and the FDIC.
Such access shall be afforded without charge, but only upon reasonable and
prior written request and during normal business hours at the offices
designated by the Master Servicer. Nothing in this Section shall limit the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Master Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
SECTION 3.16. Annual Statement as to Compliance.
---------------------------------
The Master Servicer shall deliver to the Depositor and the Trustee
on or before 120 days after the end of the Master Servicer's fiscal year,
commencing with its 1998 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the
Master Servicer under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof. The Trustee shall forward a
copy of each such statement to each Rating Agency.
SECTION 3.17. Annual Independent Public Accountants' Servicing
------------------------------------------------
Statement; Financial Statements.
-------------------------------
On or before 120 days after the end of the Master Servicer's
fiscal year, commencing with its 1998 fiscal year, the Master Servicer at
its expense shall cause a nationally or regionally recognized firm of
independent public accountants (who may also render other services to the
Master Servicer, the Seller or any affiliate thereof) which is a member of
the American Institute of Certified Public Accountants to furnish a
statement to the Trustee and the Depositor to the effect that-such firm has
examined certain documents and records relating to the servicing of the
Mortgage Loans under this Agreement or of mortgage loans under pooling and
servicing agreements substantially similar to this Agreement (such statement
to have attached thereto a schedule setting forth the pooling and servicing
agreements covered thereby) and that, on the basis of such examination,
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FNMA and FHLMC, such servicing has been conducted in compliance with such
pooling and servicing agreements except for such significant exceptions or
errors in records that, in the opinion of such firm, the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FNMA and FHLMC requires it to report. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FNMA and FHLMC (rendered within one year of such statement) of independent
public accountants with respect to the related Subservicer. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request at the Master Servicer's expense, provided such statement is
delivered by the Master Servicer to the Trustee.
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.
----------------------------------------------
The Master Servicer shall for so long as it acts as master
servicer under this Agreement, obtain and maintain in force (a) a policy or
policies of insurance covering errors and omissions in the performance of
its obligations as Master Servicer hereunder and (b) a fidelity bond in
respect of its officers, employees and agents. Each such policy or policies
and bond shall, together, comply with the requirements from time to time of
FNMA or FHLMC for persons performing servicing for mortgage loans purchased
by FNMA or FHLMC. In the event that any such policy or bond ceases to be in
effect, the Master Servicer shall obtain a comparable replacement policy or
bond from an insurer or issuer, meeting the requirements set forth above as
of the date of such replacement.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances.
--------
The Master Servicer shall determine on or before each Master
Servicer Advance Date whether it is required to make an Advance pursuant to
the definition thereof. If the Master Servicer determines it is required to
make an Advance, it shall, on or before the Master Servicer Advance Date,
either (i) deposit into the Certificate Account an amount equal to the
Advance or (ii) make an appropriate entry in its records relating to the
Certificate Account that any Amount Held for Future Distribution has been
used by the Master Servicer in discharge of its obligation to make any such
Advance. Any funds so applied shall be replaced by the Master Servicer by
deposit in the Certificate Account no later than the close of business on
the next Master Servicer Advance Date. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of
its own funds made pursuant to this Section as provided in Section 3.08.
The obligation to make Advances with respect to any Mortgage Loan shall
continue if such Mortgage Loan has been foreclosed or otherwise terminated
and the related Mortgaged Property has not been liquidated.
The Master Servicer shall deliver to the Trustee on the related Master
Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
SECTION 4.02. Priorities of Distribution.
--------------------------
(a) On each Distribution Date, the Trustee shall withdraw the
Available Funds from the Distribution Account and apply such funds to
distributions on the Certificates in the following order and priority and,
in each case, to the extent of Available Funds remaining:
(i) (Reserved);
(ii) to each interest-bearing Class of Senior Certificates,
an amount allocable to interest equal to the related Class Optimal Interest
Distribution Amount, any shortfall being allocated among such Classes in
proportion to the amount of the Class Optimal Interest Distribution Amount
that would have been distributed in the absence of such shortfall;
(iii) (Reserved)
(iv) to each Class of Senior Certificates, concurrently as
follows:
(x) to the Class PO Certificates, an amount allocable
to principal equal to the PO Formula Principal Amount, up to the outstanding
Class Certificate Balance of the Class PO Certificates; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date, the Non-PO Formula Principal Amount, up to
the amount of the Senior Principal Distribution Amount for such Distribution
Date, will be distributed as follows:
(A) to Class A-R Certificates, until the Class
Certificate Balance thereof is reduced to zero;
(B) to the Class A-10 Certificates, the Priority
Amount, until the Class Certificate Balance thereof
is reduced to zero;
(C) concurrently, 61.5323462106% to the Class A-1
Certificates, until the Class Certificate Balance
thereof is reduced to zero and 38.4676537894% as
follows:
(i) concurrently, 52.3409445804% to the Class
A-4 Certificates, 30.9783859917% to the Class
A-5 Certificates, 1.1914764320% to the Class A-
6 Certificates and 15.4891929959% to the Class
A-7 Certificates, until the Class Certificate
Balance of the Class A-4 Certificates is
reduced to zero; and
(ii) concurrently, to the Class A-5, Class A-6
and Class A-7 Certificates, pro rata, in
proportion to their then-current Class
Certificate Balances, until the respective
Class Certificate Balances thereof are reduced
to zero;
(D) concurrently, to the Class A-2, Class A-3 and
Class A-8 Certificates, pro rata, in proportion to
their original Class Certificate Balances, until the
respective Class Certificate Balances thereof are
reduced to zero; and
(E) sequentially, to the Class A-9 and Class A-10
Certificates, in that order, until the Class
Certificate Balances thereof are reduced to zero.
(v) to the Class PO Certificates, any Class PO Deferred
Amount, up to an amount not to exceed the amount calculated pursuant to
clause (A) of the definition of the Subordinated Principal Distribution
Amount actually received or advanced for such Distribution Date (with such
amount to be allocated first from amounts calculated pursuant to (A)(i) and
(ii) then (iii) of the definition of Subordinated Principal Distribution
Amount);
(vi) to each Class of Subordinated Certificates, subject to
paragraph (e) below, in the following order of priority:
(A) to the Class M Certificates, an amount
allocable to interest equal to the Class Optimal Interest
Distribution Amount for such Distribution Date;
(B) to the Class M Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
(C) to the Class B-1 Certificates, an amount
allocable to interest equal to the Class Optimal Interest
Distribution Amount for such Class for such Distribution
Date;
(D) to the Class B-1 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
(E) to the Class B-2 Certificates, an amount
allocable to interest equal to the Class Optimal
Interest Distribution Amount for such Class for such
Distribution Date;
(F) to the Class B-2 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
(G) to the Class B-3 Certificates, an amount
allocable to interest equal to the amount of the Class
Optimal Interest Distribution Amount for such Class for
such Distribution Date;
(H) to the Class B-3 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Balance thereof has been reduced to zero;
(I) to the Class B-4 Certificates, an amount
allocable to interest equal to the amount of the Class
Optimal Interest Distribution Amount for such Class for
such Distribution Date;
(J) to the Class B-4 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Balance thereof has been reduced to zero;
(K) to the Class B-5 Certificates, an amount
allocable to interest equal to the Class Optimal Interest
Distribution Amount for such Class for such Distribution
Date; and
(L) to the Class B-5 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Balance thereof is reduced to zero.
(vii) to the Class A-R Certificates, any remaining funds in
the Trust Fund.
On any Distribution Date, amounts distributed in respect of Class PO
Deferred Amounts will not reduce the Class Certificate Balance of the Class
PO Certificates.
On any Distribution Date, to the extent the Amount Available for
Senior Principal is insufficient to make the full distribution required to
be made pursuant to clause (iv)(x) above, (A) the amount distributable on
the Class PO Certificates in respect of principal shall be equal to the
product of (1) the Amount Available for Senior Principal and (2) a fraction,
the numerator of which is the PO Formula Principal Amount and the
denominator of which is the sum of the PO Formula Principal Amount and the
Senior Principal Distribution Amount and (B) the amount distributable on the
Senior Certificates, other than the Class PO Certificates, in respect of
principal shall be equal to the product of (1) the Amount Available for
Senior Principal and (2) a fraction, the numerator of which is the Senior
Principal Distribution Amount and the denominator of which is the sum of the
Senior Principal Distribution Amount and the PO Formula Principal Amount.
(b) (Reserved)
(c) On each Distribution Date on or after the Senior Credit
Support Depletion Date, notwithstanding the allocation and priority set
forth in Section 4.02(a)(iv)(y), the portion of Available Funds available to
be distributed as principal of the Senior Certificates (other than the Class
PO Certificates) shall be distributed concurrently, as principal, on such
Classes, pro rata, on the basis of their respective Class Certificate
Balances, until the Class Certificate Balances thereof are reduced to zero.
(d) On each Distribution Date, the amount referred to in clause
(i) of the definition of Class Optimal Interest Distribution Amount for each
Class of Certificates for such Distribution Date shall be reduced by (i) the
related Class' pro rata share of Net Prepayment Interest Shortfalls based on
such Class' Class Optimal Interest Distribution Amount for such Distribution
Date without taking into account such Net Prepayment Interest Shortfalls and
(ii) the related Class' Allocable Share of (A) after the Special Hazard
Coverage Termination Date, with respect to each Mortgage Loan that became a
Special Hazard Mortgage Loan during the calendar month preceding the month
of such Distribution Date, the excess of one month's interest at the related
Adjusted Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the Due Date in such month over the amount of Liquidation
Proceeds applied as interest on such Mortgage Loan with respect to such
month, (B) after the Bankruptcy Coverage Termination Date, with respect to
each Mortgage Loan that became subject to a Bankruptcy Loss during the
calendar month preceding the month of such Distribution Date, the interest
portion of the related Debt Service Reduction or Deficient Valuation, (C)
each Relief Act Reduction incurred during the calendar month preceding the
month of such Distribution Date and (D) after the Fraud Coverage Termination
Date, with respect to each Mortgage Loan that became a Fraud Loan during the
calendar month preceding the month of such Distribution Date, the excess of
one month's interest at the related Adjusted Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date in such month
over the amount of Liquidation Proceeds applied as interest on such Mortgage
Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in
Section 4.02(a)(vi), if with respect to any Class of Subordinated
Certificates on any Distribution Date the sum of the related Class
Subordination Percentages of such Class and of all Classes of Subordinated
Certificates which have a higher numerical Class designation than such Class
(the "Applicable Credit Support Percentage") is less than the Original
Applicable Credit Support Percentage for such Class, no distribution of
Principal Prepayments will be made to any such Classes (the "Restricted
Classes") and the amount of such Principal Prepayments otherwise
distributable to the Restricted Classes shall be distributed to any Classes
of Subordinated Certificates having lower numerical Class designations than
such Class, pro rata, based on their respective Class Certificate Balances
immediately prior to such Distribution Date and shall be distributed in the
sequential order provided in Section 4.02(a)(vi).
SECTION 4.03. (Reserved)
SECTION 4.04. Allocation of Realized Losses.
-----------------------------
(a) On or prior to each Determination Date, the Trustee shall
determine the total amount of Realized Losses, including Excess Losses, with
respect to the related Distribution Date. For purposes of allocating losses
to the Subordinated Certificates, the Class M Certificates will be deemed to
have a lower numerical class designation, and to be of a higher relative
payment priority, than each other Class of Subordinated Certificates.
Realized Losses with respect to any Distribution Date shall be
allocated as follows:
(i) the applicable PO Percentage of any Realized Loss, including
any Excess Loss, shall be allocated to the Class PO Certificates until
the Class Certificate Balance thereof is reduced to zero; and
(ii) (1) the applicable Non-PO Percentage of any Realized Loss
(other than an Excess Loss) shall be allocated first to the Subordinated
Certificates in reverse order of their respective numerical Class
designations (beginning with the Class of Subordinated Certificates then
outstanding with the highest numerical Class designation) until the
respective Class Certificate Balance of each such Class is reduced to
zero, and second to the Senior Certificates (other than the Notional
Amount Certificates and the Class PO Certificates), pro rata on the
basis of their respective Class Certificate Balances or, in the case of
each Class of Accrual Certificates, on the basis of the lesser of their
Class Certificate Balance and their initial Class Certificate Balance,
in each case immediately prior to the related Distribution Date until
the respective Class Certificate Balance of each such Class is been
reduced to zero; and
(2) the applicable Non-PO Percentage of any Excess Losses
shall be allocated to the Senior Certificates (other than the Notional
Amount Certificates and the Class PO Certificates) and the Subordinated
Certificates then outstanding, pro rata, on the basis of their
respective Class Certificate Balances or, in the case of each Class
of Accrual Certificates, on the basis of the lesser of their
respective Class Certificate Balances and their respective initial
Class Certificate Balances, in each case immediately prior to the
related Distribution Date.
(b) The Class Certificate Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class designation
shall be reduced on each Distribution Date by the sum of (i) the amount of
any payments on the Class PO Certificates in respect of Class PO Deferred
Amounts and (ii) the amount, if any, by which the aggregate of the Class
Certificate Balances of all outstanding Classes of Certificates (after
giving effect to the distribution of principal and the allocation of
Realized Losses and Class PO Deferred Amounts on such Distribution Date)
exceeds the Pool Stated Principal Balance for the following Distribution
Date.
(c) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Certificate Balance of a Class of Certificates
pursuant to Section 4.04(a) above shall be allocated among the Certificates
of such Class in proportion to their respective Certificate Balances.
(d) Any allocation of Realized Losses to a Certificate or to any
Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 4.04(a) above shall be accomplished by reducing the
Certificate Balance or Component Balance thereof, as applicable, immediately
following the distributions made on the related Distribution Date in
accordance with the definition of "Certificate Balance" or "Component
Balance," as the case may be.
SECTION 4.05. (Reserved).
----------
SECTION 4.06. Monthly Statements to Certificateholders.
----------------------------------------
(a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each
Certificateholder, the Master Servicer and the Depositor a statement setting
forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Class
Unpaid Interest Shortfall included in such distribution and any
remaining Class Unpaid Interest Shortfall after giving effect to
such distribution;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall and the allocation
thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of principal
on such Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the Senior Percentage and Subordinated Percentage for
the following Distribution Date;
(vii) the amount of the Master Servicing Fees paid to or
retained by the Master Servicer with respect to such Distribution
Date;
(viii) the Pass-Through Rate for each such Class of
Certificates with respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on
such Distribution Date and the aggregate amount of Advances
outstanding as of the close of business on such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage
Loans (A) delinquent (exclusive of Mortgage Loans in foreclosure)
(1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or
more days and (B) in foreclosure and delinquent (1) 1 to 30 days
(2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days, as of
the close of business on the last day of the calendar month
preceding such Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan as of the close of
business on the Determination Date preceding such Distribution Date
and the date of acquisition thereof;
(xii) the total number and principal balance of any REO
Properties (and market value, if available) as of the close of
business on the Determination Date preceding such Distribution
Date;
(xiii) the Senior Prepayment Percentage for the following
Distribution Date;
(xiv) the aggregate amount of Realized Losses incurred
during the preceding calendar month; and
(xv) the Special Hazard Loss Coverage Amount, the Fraud Loss
Coverage Amount and the Bankruptcy Loss Coverage Amount, in each
case as of the related Determination Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information provided by the Master Servicer.
The Trustee will send a copy of each statement provided pursuant to this
Section 4.04 to each Rating Agency.
(c) On or before the fifth Business Day following the end of each
Prepayment Period (but in no event later than the third Business Day prior
to the related Distribution Date), the Master Servicer shall deliver to the
Trustee (which delivery may be by electronic data transmission) a
report in substantially the form set forth as Schedule IV hereto.
(d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vii)
of this Section 4.06 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation
of the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time in effect.
SECTION 4.07. Determination of Pass-Through Rates for COFI
--------------------------------------------
Certificates.
------------
The Pass-Through Rate for each Class of COFI Certificates for each
Interest Accrual Period after the initial Interest Accrual Period shall be
determined by the Trustee as provided below on the basis of the Index and
the applicable formulae appearing in footnotes corresponding to the COFI
Certificates in the table relating to the Certificates in the Preliminary
Statement.
Except as provided below, with respect to each Interest Accrual
Period following the initial Interest Accrual Period, the Trustee shall not
later than two Business Days following the publication of the applicable
Index determine the Pass-Through Rate at which interest shall accrue in
respect of the COFI Certificates during the related Interest Accrual Period.
Except as provided below, the Index to be used in determining the
respective Pass-Through Rates for the COFI Certificates for a particular
Interest Accrual Period shall be COFI for the second calendar month
preceding such Interest Accrual Period. If at the Outside Reference Date
for any Interest Accrual Period, COFI for the second calendar month
preceding such Interest Accrual Period has not been published, the Trustee
shall use COFI for the third calendar month preceding such Interest Accrual
Period. If COFI for neither the second nor third calendar months preceding
any Interest Accrual Period has been published on or before the related
Outside Reference Date, the Index for such Interest Accrual Period and for
all subsequent Interest Accrual Periods shall be the National Cost of Funds
Index for the third calendar month preceding such Interest Accrual Period
(or the fourth preceding calendar month if such National Cost of Funds Index
for the third preceding calendar month has not been published by such
Outside Reference Date). In the event that the National Cost of Funds Index
for neither the third nor fourth calendar months preceding an Interest
Accrual Period has been published on or before the related Outside Reference
Date, then for such 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 COFI
Certificates by the Trustee shall (in the absence of manifest error) be
final, conclusive and binding upon each Holder of a Certificate and the
Trustee.
SECTION 4.08. Determination of Pass-Through Rates for LIBOR
---------------------------------------------
Certificates.
------------
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
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.
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 hereof respecting the final distribution
on the Certificates, on each Distribution Date the Trustee shall make
distributions to each Certificateholder of record on the preceding Record
Date either (x) by wire transfer in immediately available funds to the
account of such holder at a bank or other entity having appropriate
facilities therefor, if (i) such Holder has so notified the Trustee at least
five Business Days prior to the related Record Date and (ii) such Holder
shall hold (A) a Notional Amount Certificate, (B) 100% of the Class
Certificate Balance of any Class of Certificates or (C) Certificates of any
Class with aggregate principal Denominations of not less than $1,000,000 or
(y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the
time when such signatures were affixed, authorized to sign on behalf of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the countersignature and
delivery of such Certificates or did not hold such offices at the date of
such Certificate. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless countersigned by the
Trustee by manual signature, and such countersignature upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate
has been duly executed and delivered hereunder. All Certificates shall be
dated the date of their countersignature. On the Closing Date, the Trustee
shall countersign the Certificates to be issued at the direction of the
Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
SECTION 5.02. Certificate Register; Registration of Transfer
----------------------------------------------
and Exchange of Certificates.
----------------------------
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06 hereof, a Certificate
Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. Upon
surrender for registration of transfer of any Certificate, the Trustee shall
execute and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and aggregate
Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest upon
surrender of the Certificates to be exchanged at the office or agency of the
Trustee. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute, authenticate, and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under
the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under said Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee shall each certify to the Trustee in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit J
(the "Transferor Certificate") and (i) deliver a letter in substantially the
form of either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule
144A Letter") or (ii) there shall be delivered to the Trustee at the expense
of the transferor an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Securities Act. The Depositor shall
provide to any Holder of a Private Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the regis- tration 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, such requirement is satisfied only by the Trustee's receipt of
a representation letter from the transferee substantially in the form of
Exhibit K or Exhibit L), to the effect that such transferee is not an
employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code, nor a person acting
on behalf of any such plan or arrangement, nor using the assets of any such
plan or arrangement to effect such transfer, (ii) if the purchaser is an
insurance company, a representation that the purchaser is an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under PTCE 95-60 or
(iii) in the case of any such ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement, or using
such plan's or arrangement's assets, an Opinion of Counsel satisfactory to
the Trustee, which Opinion of Counsel shall not be an expense of either the
Trustee or the Trust Fund, addressed to the Trustee to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in
the assets of the Trust Fund being deemed to be "plan assets" and subject to
the prohibited transaction provisions of ERISA and the Code and will not
subject the Trustee to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is
not a Private Certificate, in the event the representation letter referred
to in the preceding sentence is not so furnished, such representation shall
be deemed to have been made to the Trustee by the transferee's (including an
initial acquiror's) acceptance of the ERISA-Restricted Certificates.
Notwithstanding anything else to the contrary herein, any purported transfer
of an ERISA-Restricted Certificate to or on behalf of an employee benefit
plan subject to ERISA or to the Code without the delivery to the Trustee of
an Opinion of Counsel satisfactory to the Trustee as described above shall
be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA-Restricted Certificate that is
in fact not permitted by this Section 5.02(b) or 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 Trans-
fer 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 any REMIC hereunder to fail
to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, a Certificateholder
or another Person. Each Person holding or acquiring any Ownership Interest
in a Residual Certificate hereby consents to any amendment of this Agreement
which, based on an Opinion of Counsel furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Residual Certificate is not transferred, directly
or indirectly, to a Person that is not a Permitted Transferee and (b) to
provide for a means to compel the Transfer of a Residual Certificate which
is held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be
at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall
at all times remain registered in the name of the Depository or its nominee
and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates;
(iii) ownership and transfers of registration of the Book-Entry Certificates
on the books of the Depository shall be governed by applicable rules
established by the Depository; (iv) the Depository may collect its usual and
customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of
the Book-Entry Certificates for purposes of exercising the rights of holders
under this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Trustee may rely and
shall be fully protect- ed in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and
persons shown on the books of such indirect participating firms as direct or
indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate
Owner. Each Depository Participant shall only transfer Book-Entry
Certificates of Certificate Owners it represents or of brokerage firms for
which it acts as agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Depositor is unable to locate a qualified successor, (y) the Depositor at
its option advises the Trustee in writing that it elects to terminate the
book- entry system through the Depository or (z) after the occurrence of an
Event of Default, Certificate Owners representing at least 51% of the
Certificate Balance of the Book-Entry Certificates together advise the
Trustee and the Depository through the Depository Participants in writing
that the continuation of a book-entry system through the Depository is no
longer in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of
any such event and of the availability of definitive, fully-registered
Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registra- tion, the Trustee shall issue the Definitive
Certificates. Neither the Master Servicer, the Depositor nor the Trustee
shall be liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in relying on, such
instructions. The Master Servicer shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer
of Definitive Certificates. Upon the issuance of Definitive Certificates
all references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee,
to the extent applicable with respect to such Definitive Certificates and
the Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided that the Trustee shall not by virtue
of its assumption of such obligations become liable to any party for any act
or failure to act of the Depository.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
------------------------------------
Certificates.
------------
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Certificate and (b) there is delivered to the Master
Servicer and the Trustee such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, countersign and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In 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
here- under. The Depositor, the Seller, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Seller or the
Master Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any
audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. None of the
Depositor, the Seller or the Master Servicer shall be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
respective duties hereunder and which in its opinion may involve it in
any expense or liability; provided, however, that any of the Depositor, the
-------- -------
Seller or the Master Servicer may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor, the
Seller and the Master Servicer shall be entitled to be reimbursed therefor
out of the Certificate Account.
SECTION 6.04. Limitation on Resignation of Master Servicer.
--------------------------------------------
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) upon appointment of a successor
servicer and receipt by the Trustee of a letter from each Rating Agency that
such a resignation and appointment will not result in a downgrading of the
rating of any of the Certificates, without regard to the guaranty provided
by the Policies, or (b) upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination under
clause (b) permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until the Trustee or a successor
master servicer shall have assumed the Master Servicer's responsibilities,
duties, liabilities and obligations hereunder.
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or remit to the Trustee any payment required to
be made under the terms of this Agreement, which failure shall
continue unremedied for five days after the date upon which written
notice of such failure shall have been given to the Master Servicer
by the Trustee or the Depositor or to the Master Servicer and the
Trustee by the Holders of Certificates having not less than 25% of
the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer contained in this
Agreement, which failure materially affects the rights of
Certificateholders, that continues unremedied for a period of 60
days after the date on which written notice of such failure shall
have been given to the Master Servicer by the Trustee or the
Depositor, or to the Master Servicer and the Trustee by the Holders
of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; 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.
If an Event of Default described in clauses (i) to (vi) of this
Section shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 66 2/3% of
the Voting Rights evidenced by the Certificates, the Trustee shall by notice
in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Master Servicer under
this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On and after the
receipt by the Master Servicer of such written notice, all authority and
power of the Master Servicer hereunder, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee. The Trustee
shall thereupon make any Advance which the Master Servicer failed to make
subject to Section 3.04 hereof. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise. Unless expressly provided in such written notice,
no such termination shall affect any obligation of the Master Servicer to
pay amounts owed pursuant to Article VIII. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at
the time be credited to the Certificate Account, or thereafter be received
with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan which was due
prior to the notice terminating such Master Servicer's rights and
obligations as Master Servicer hereunder and received after such notice,
that portion thereof to which such Master Servicer would have been entitled
pursuant to Sections 3.08(a)(i) through (viii),and any other amounts payable
to such Master Servicer hereunder the entitlement to which arose prior to
the termination of its activities hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, subject to
and to the extent provided in Section 3.04, be the successor to the Master
Servicer in its capacity as master servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof and applicable law
including the obligation to make Advances pursuant to Section 4.01. As
compensation therefor, the Trustee shall be entitled to all funds relating
to the Mortgage Loans that the Master Servicer would have been entitled to
charge to the Certificate Account or Distribution Account if the Master
Servicer had continued to act hereunder. Notwithstanding the foregoing, if
the Trustee has become the successor to the Master Servicer in accordance
with Section 7.01 hereof, the Trustee may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 hereof or if it is otherwise unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which
does not adversely affect the then current rating of the Certificates by
each Rating Agency as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder. Any successor to the Master Servicer
shall be an institution which is a FNMA and FHLMC approved seller/servicer
in good standing, which has a net worth of at least $15,000,000, and which
is willing to service the Mortgage Loans and executes and delivers to the
Depositor and the Trustee an agreement accepting such delegation and
assignment, which contains an assumption by such Person of the rights,
powers, duties, responsibilities, obligations and liabilities of the Master
Servicer (other than liabilities of the Master Servicer under Section 6.03
hereof incurred prior to termination of the Master Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement;
and provided further that each Rating Agency acknowledges that its rating of
the Certificates in effect immediately prior to such assignment and delegation
will not be qualified or reduced, without regard to the guaranty provided
by the Policies, as a result of such assignment and delegation. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.04 hereof, act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the Trustee may make
such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however,
-------- -------
that no such compensation shall be in excess of the Master Servicing
Fee permitted the Master Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary
to effectuate any such succession. Neither the Trustee nor any other
successor master servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused
by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as master servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the
term of its service as master servicer maintain in force the policy or
policies that the Master Servicer is required to maintain pursuant to
Section 6.05.
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 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 counter-signature of
the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor or the Master Servicer of any funds paid to the
Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Certificate Account by the Depositor or
the Master Servicer.
SECTION 8.04. Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
---------------------------
The Trustee, as compensation for its activities hereunder, shall
be entitled to withdraw from the Distribution Account on each Distribution
Date an amount equal to the Trustee Fee for such Distribution Date. The
Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Master Servicer and held harmless against any loss,
liability or expense (including reasonable attorney's fees) (i) incurred in
connection with any claim or legal action relating to (a) this Agreement,
(b) the Certificates or (c) in connection with the performance of any of the
Trustee's duties hereunder, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Trustee's duties hereunder or incurred by reason
of any action of the Trustee taken at the direction of the
Certificateholders and (ii) resulting from any error in any tax or
information return prepared by the Master Servicer. Such indemnity shall
survive the termination of this Agreement or the resignation or removal of
the Trustee hereunder. Without limiting the foregoing, the Master Servicer
covenants and agrees, except as otherwise agreed upon in writing by the
Depositor and the Trustee, and except for any such expense, disbursement or
advance as may arise from the Trustee's negligence, bad faith or willful
misconduct, to pay or reimburse the Trustee, for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any of the provisions of this Agreement with respect to: (A) the
reasonable compensation and the expenses and disbursements of its counsel
not associated with the closing of the issuance of the Certificates, (B) the
reasonable compensation, expenses and disbursements of any accountant,
engineer or appraiser that is not regularly employed by the Trustee, to the
extent that the Trustee must engage such persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with
preparing any Definitive Certificates. Except as otherwise provided herein,
the Trustee shall not be entitled to payment or reimbursement for any
routine ongoing expenses incurred by the Trustee in the ordinary course of
its duties as Trustee, Registrar, Tax Matters Person or Paying Agent
hereunder or for any other expenses.
SECTION 8.06. Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to super-vision or examination by federal or state authority and
with a credit rating which would not cause either of the Rating Agencies to
reduce their respective then current ratings of the Certificates (or having
provided such security from time to time as is sufficient to avoid such
reduction). If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The entity
serving as Trustee may have normal banking and trust relationships with the
Depositor and its affiliates or the Master Servicer and its affiliates;
provided, however,
- -------- -------
an affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
----------------------------------
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the
Depositor and the Master Servicer and each Rating Agency not less than 60
days before the date specified in such notice when, subject to Section 8.08,
such resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.08 meeting the qualifications set forth in Section
8.06. If no successor trustee meeting such qualifications shall have been
so appointed and have accepted appointment within 30 days after the giving
of such notice or resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to
resign after written request thereto by the Depositor, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged as bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or a tax is imposed with respect to the Trust
Fund by any state in which the Trustee or the Trust Fund is located and the
imposition of such tax would be avoided by the appointment of a different
trustee, then the Depositor or the Master Servicer may remove the Trustee
and appoint a successor trustee by written instrument, in triplicate, one
copy of which instrument shall be delivered to the Trustee, one copy of
which shall be delivered to the Master Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Master
Servicer, one complete set to the Trustee so removed and one complete set to
the successor so appointed. Notice of any removal of the Trustee shall be
given to each Rating Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
-----------------
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor and to its
predecessor trustee and the Master Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with the like effect as if originally named as trustee herein. The
Depositor, the Master Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the
successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates. If the Depositor
fails to mail such notice within 10 days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
mailed at the expense of the Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
----------------------------------
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 hereof without the execution
or filing of any paper or further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Fund or property securing any Mortgage Note
may at the time be located, the Master Servicer and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Trustee to act as co-trustee
or co-trustees jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Fund, and to vest in such Person
or Persons, in such capacity and for the benefit of the Certificateholders,
such title to the Trust Fund or any part thereof, whichever is applicable,
and, subject to the other provisions of this Section 8.10, such powers,
duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall
not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under
Section 8.06 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) To the extent necessary to effectuate the purposes of
this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee, except for the obligation of
the Trustee under this Agreement to advance funds on behalf of 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 is to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to such assets shall be
such as to qualify such assets as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it
shall act as agent (and the Trustee is hereby appointed to act as agent) on
behalf of any such REMIC and that in such capacity it shall: (a) prepare
and file, or cause to be prepared and filed, in a timely manner, a U.S. Real
Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
or cause to be prepared and filed with the Internal Revenue Service and
applicable state or local tax authorities income tax or information returns
for each taxable year with respect to any such REMIC, containing such
information and at the times and in the manner as may be required by the
Code or state or local tax laws, regulations, or rules, and furnish or cause
to be furnished to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to
the Internal Revenue Service, on Forms 8811 or as otherwise may be required
by the Code, the name, title, address, and telephone number of the person
that the holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be
required by such Form, and update such information at the time or times in
the manner required by the Code; (c) make or cause to be made elections that
such assets be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law); (d) prepare
and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when
required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) provide information necessary for the
computation of tax imposed on the transfer of a Residual Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an
interest (the reasonable cost of computing and furnishing such information
may be charged to the Person liable for such tax); (f) to the extent that
they are under its control conduct matters relating to such assets at all
times that any Certificates are outstanding so as to maintain the status as
a REMIC under the REMIC Provisions; (g) not knowingly or intentionally take
any action or omit to take any action that would cause the termination of
the REMIC status; (h) pay, from the sources specified in the last paragraph
of this Section 8.11, the amount of any federal or state tax, including
prohibited transaction taxes as described below, imposed on any such REMIC
prior to its termination when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings); (i) ensure that federal,
state or local income tax or information returns shall be signed by the
Trustee or such other person as may be required to sign such returns by the
Code or state or local laws, regulations or rules; (j) maintain records
relating to any such REMIC, including but not limited to the income,
expenses, assets and liabilities thereof and the fair market value and
adjusted basis of the assets determined at such intervals as may be required
by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent any such REMIC in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of
any such REMIC, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of
any such REMIC, and otherwise act on behalf of any such REMIC in relation to
any tax matter or controversy involving it.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including,
without limitation, the price, yield, prepayment assumption and projected
cash flows of the Certificates and the Mortgage Loans. Thereafter, the
Depositor shall provide to the Trustee promptly upon written request
therefor, any such additional information or data that the Trustee may, from
time to time, reasonably request in order to enable the Trustee to perform
its duties as set forth herein. The Depositor hereby indemnifies the
Trustee for any losses, liabilities, damages, claims or expenses of the
Trustee arising from any errors or miscalculations of the Trustee that
result from any failure of the Depositor to provide, or to cause to be
provided, accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions"
of the REMIC as defined in Section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of the REMIC as defined in Section 860G(c)
of the Code, on any contribution to the REMIC after the Startup Day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any minimum tax imposed upon the REMIC pursuant to
Sections 23153 and 24874 of the California Revenue and Taxation Code, if not
paid as otherwise provided for herein, such tax shall be paid by (i) the
Trustee, if any such other tax arises out of or results from a breach by the
Trustee of any of its obligations under this Agreement, (ii) the Master
Servicer, in the case of any such minimum tax, or if such tax arises out of
or results from a breach by the Master Servicer or Seller of any of their
obligations under this Agreement, (iii) the Seller, if any such tax arises
out of or results from the Seller's obligation to repurchase a Mortgage Loan
pursuant to Section 2.02 or 2.03 or (iv) in all other cases, or in the event
that the Trustee, the Master Servicer or the Seller fails to honor its
obligations under the preceding clauses (i),(ii) or (iii), any such tax will
be paid with amounts otherwise to be distributed to the Certificateholders,
as provided in Section 3.08(b).
SECTION 8.12. Periodic Filings.
----------------
Pursuant to written instructions from the Depositor, the Trustee
shall prepare, execute and file all periodic reports required under the
Securities Exchange Act of 1934 in conformity with the terms of the relief
granted to the Depositor in CWMBS, Inc. (February 3, 1994), a copy of which
has been supplied to the Trustee by the Issuer. In connection with the
preparation and filing of such periodic reports, the Depositor and the
Master Servicer shall timely provide to the Trustee all material information
available to them which is required to be included in such reports and not
known to them to be in the possession of the Trustee and such other
information as the Trustee reasonably may request from either of them and
otherwise reasonably shall cooperate with the Trustee. The Trustee shall
have no liability with respect to any failure to properly prepare or file
such periodic reports resulting from or relating to the Trustee's inability
or failure to obtain any information not resulting from its own negligence
or willful misconduct.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all
-----------------------------------------------
Mortgage Loans.
--------------
Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Master Servicer and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the
purchase by the Master Servicer of all Mortgage Loans (and REO Properties)
remaining in the Trust Fund at the price equal to the sum of (i) 100% of the
Stated Principal Balance of each Mortgage Loan plus one month's accrued
interest thereon at the applicable Adjusted Mortgage Rate and (ii) the
lesser of (x) the appraised value of any REO Property as determined by the
higher of two appraisals completed by two independent appraisers selected by
the Master Servicer at the expense of the Master Servicer and (y) the Stated
Principal Balance of each Mortgage Loan related to any REO Property, in each
case plus accrued and unpaid interest thereon at the applicable Adjusted
Mortgage Rate and (b) the later of (i) the maturity or other liquidation (or
any Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property and (ii) the distribution
to Certificateholders of all amounts required to be distributed to them
pursuant to this Agreement. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death
of the survivor of the descendants of Joseph P. Kennedy, the late Ambassador
of the United States to the Court of St. James's, living on the date hereof
and (ii) the Latest Possible Maturity Date. The right to purchase all
Mortgage Loans and REO Properties pursuant to clause (a) above shall be
conditioned upon the Pool Stated Principal Balance, at the time of any such
repurchase, aggre- gating less than ten percent of the aggregate Cut-off
Date Principal Balance of the Mortgage Loans.
SECTION 9.02. Final Distribution on the Certificates.
--------------------------------------
If on any Determination Date, the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master
Servicer shall direct the Trustee promptly to send a final distribution
notice to each Certificateholder. If the Master Servicer elects to
terminate the Trust Fund pursuant to clause (a) of Section 9.01, at least 20
days prior to the date notice is to be mailed to the affected
Certificateholders, the Master Servicer shall notify the Depositor and the
Trustee of the date the Master Servicer intends to terminate the Trust Fund
and of the applicable repurchase price of the Mortgage Loans and REO
Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall
be given promptly by the Trustee by letter to Certificateholders mailed not
earlier than the 15th day and no later than the 10th day of the month next
preceding the month of such final distribution. Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at
the office therein designated, (b) the amount of such final distribution,
(c) the location of the office or agency at which such presentation and
surrender must be made, and (d) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein speci-
fied. The Master Servicer will give such notice to each Rating Agency at
the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in
the order set forth in Section 4.02 hereof, on the final Distribution Date,
in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each
Class of Regular Certificates, the Certificate Balance thereof plus (a)
accrued interest thereon (or on their Notional Amount, if applicable) in the
case of an interest bearing Certificate and (b) any Class PO Deferred
Amounts in the case of the Class PO Certificates, and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation,
the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of
the funds and other assets which remain a part of the Trust Fund. If within
one year after the second notice all Certificates shall not have been
surrendered for cancellation, the Class A-R Certificateholders shall be
entitled to all unclaimed funds and other assets of the Trust Fund which
remain subject hereto.
SECTION 9.03. Additional Termination Requirements.
-----------------------------------
(a) 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 any REMIC as defined in section 860F of the
Code, or (ii) cause any REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Master Servicer under Section 9.02, the
Master Servicer shall prepare and the Trustee, at the expense of the
"tax matters person," shall adopt a plan of complete liquidation within
the meaning of section 860F(a)(4) of the Code which, as evidenced by an
Opinion of Counsel (which opinion shall not be an expense of the Trustee
or the Tax Matters Person), meets the requirements of a qualified
liquidation; and
(2) Within 90 days after the time of adoption of such a plan
of complete liquidation, the Trustee shall sell all of the assets of
the Trust Fund to the Master Servicer for cash in accordance with
Section 9.01.
(b) The Trustee as agent for any REMIC hereby agrees to adopt and
sign such a plan of complete liquidation upon the written request of the
Master Servicer, and the receipt of the Opinion of Counsel referred to in
Section 9.03(a)(1) and to take such other action in connection therewith as
may be reasonably requested by the Master Servicer.
(c) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to prepare and the Trustee to adopt and
sign a plan of complete liquidation.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
---------
This Agreement may be amended from time to time by the Depositor,
the Master Servicer and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may
be inconsistent with any other provision herein, (iii) to add to the duties
of the Depositor, the Seller or the Master Servicer, (iv) to add any other
provisions with respect to matters or questions arising hereunder or (v) to
modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement; provided that any action pursuant to clauses
(iv) or (v) above shall not, as evidenced by an Opinion of Counsel (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust
Fund), adversely affect in any material respect the interests of any
Certificateholder; provided, however,
-------- -------
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor and the Master
Servicer also may at any time and from time to time amend this Agreement
without the consent of the Certificateholders to modify, eliminate or add to
any of its provisions to such extent as shall be necessary or helpful to (i)
maintain the qualification of any REMIC as a REMIC under the Code, (ii)
avoid or minimize the risk of the imposition of any tax on any REMIC
pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements
of the Code, provided that the Trustee has been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as
applicable, (i) maintain such qualification, (ii) avoid or minimize the risk
of the imposition of such a tax or (iii) comply with any such requirements
of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the
Holders of a Majority in Interest of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
--------
however,
- -------
that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect
in any material respect the interests of the Holders of any Class of
Certificates in a manner other than as described in (i), without the consent
of the Holders of Certificates of such Class evidencing, as to such Class,
Percentage Interests aggregating 66% or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to
any such amendment, without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of
Counsel, which opinion shall not be an expense of the Trustee or the Trust
Fund, to the effect that such amendment will not cause the imposition of any
tax on any REMIC or the Certificateholders or cause any REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into
an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund, satisfactory to the
Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect
in any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required
to be reached pursuant to this Section 10.01.
SECTION 10.02. Recordation of Agreement; Counterparts.
--------------------------------------
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Master Servicer at its
expense, but only upon direction by the Trustee accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and such counterparts shall constitute
but one and the same instrument.
SECTION 10.03. Governing Law.
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Intention of Parties.
--------------------
It is the express intent of the parties hereto that the conveyance
of the Trust Fund by the Depositor to the Trustee be, and be construed as,
an absolute sale thereof to the Trustee. It is, further, not the intention
of the parties that such conveyance be deemed a pledge thereof by the
Depositor to the Trustee. However, in the event that, notwithstanding the
intent of the parties, such assets are held to be the property of the
Depositor, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided
for in this Agreement shall be deemed to be an assignment and a grant by the
Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund,
whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will
be maintained as such throughout the term of the Agreement. The Depositor
shall arrange for filing any Uniform Commercial Code continuation statements
in connection with any security interest granted or assigned to the Trustee
for the benefit of the Certificateholder.
SECTION 10.05. Notices.
-------
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which
it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.04;
2. Each annual statement as to compliance described in Section
3.16;
3. Each annual independent public accountants' servicing report
described in Section 3.17; and
4. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in
the case of the Depositor, CWMBS, Inc., 155 North Lake Avenue, Pasadena,
California 91101, Attention: David A. Spector, (b) in the case of
the Master Servicer, Countrywide Home Loans, Inc., 4500 Park Granada,
Calabasas, California 91302, Attention: Kevin W. Bartlett or such other
address as may be hereafter furnished to the Depositor and the Trustee by
the Master Servicer in writing, (c) in the case of the Trustee, The Bank of
New York, 101 Barclay Street, 12E, New York, New York 10286, Attention:
Mortgage- Backed Securities Group Series 1998-2, or such other address as
the Trustee may hereafter furnish to the Depositor or Master Servicer and
(d) in the case of the Rating Agencies, the address specified therefor in
the definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of
this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement or of the Certificates or the rights
of the Holders thereof.
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 Certificate-holder 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:
COUNTRYWIDE HOME LOANS, INC.,
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 1998-2
Representations and Warranties of the Seller/Master Servicer
------------------------------------------------------------
Countrywide Home Loans, Inc. ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule II to the
Depositor and the Trustee, as of the Closing Date, or if so specified
herein, as of the Cut-off Date. Capitalized terms used but not otherwise
defined in this Schedule II shall have the meanings ascribed thereto in the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series, among Countrywide, as seller and
master servicer, CWMBS, Inc., as depositor, and The Bank of New York, as
trustee.
(1) Countrywide is duly organized as a New York corporation
and is validly existing and in good standing under the laws of the State
of New York and is duly authorized and qualified to transact any and
all business contemplated by the Pooling and Servicing Agreement to be
conducted by Countrywide in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of the Pooling and Servicing Agreement and to
perform any of its other obligations under the Pooling and Servicing
Agreement in accordance with the terms thereof.
(2) Countrywide has the full corporate power and authority
to sell and service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by the Pooling and Servicing Agreement and has duly authorized by all
necessary corporate action on the part of Countrywide the execution,
delivery and performance of the Pooling and Servicing Agreement; and the
Pooling and Servicing Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes
a legal, valid and binding obligation of Countrywide, enforceable
against Countrywide in accordance with its terms, except that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, morato-
rium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and
to the discretion of the court before which any proceeding therefor may
be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Countrywide, the sale and servicing of the Mortgage Loans
by Countrywide under the Pooling and Servicing Agreement, the
consummation of any other of the transactions contemplated by the
Pooling and Servicing Agreement, and the fulfillment of or compliance
with the terms thereof are in the ordinary course of business of
Countrywide and will not (A) result in a material breach of any term or
provision of the charter or by-laws of Countrywide or (B) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other
material agreement or instrument to which Countrywide is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to Countrywide of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Countrywide; and Countrywide is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over it which breach or violation may materially
impair Countrywide's ability to perform or meet any of its obligations
under the Pooling and Servicing Agreement.
(4) Countrywide is an approved servicer of conventional
mortgage loans for FNMA or FHLMC and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(5) No litigation is pending or, to the best of
Countrywide's knowledge, threatened, against Countrywide that would
materially and adversely affect the execution, delivery or
enforceability of the Pooling and Servicing Agreement or the ability of
Countrywide to sell or service the Mortgage Loans or to perform any of
its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Countrywide of, or compliance by
Countrywide with, the Pooling and Servicing Agreement or the
consummation of the transactions contemplated thereby, or if any such
consent, approval, authorization or order is required, Countrywide has
obtained the same.
(7) Countrywide intends to treat the transfer of the
Mortgage Loans to the Depositor as a sale of the Mortgage Loans for all
tax, accounting and regulatory purposes.
SCHEDULE III
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1998-2
Representations and Warranties as to the Mortgage Loans
-------------------------------------------------------
Countrywide Home Loans, Inc. ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule III to the
Depositor and the Trustee, as of the Closing Date, or if so specified
herein, as of the Cut-off Date. Capitalized terms used but not otherwise
defined in this Schedule III shall have the meanings ascribed thereto in the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series, among Countrywide, as seller and
master servicer, 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) Each Mortgage is a valid and enforceable first lien on
the Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Mortgage Loan, and (c) other matters
to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(5) Immediately prior to the assignment of the Mortgage
Loans to the Depositor, the Seller had good title to, and was the sole
owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to the Pooling and
Servicing Agreement.
(6) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(7) There is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor
to pay the unpaid principal of or interest on such Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged
Property is free of material damage and in good repair.
(10) Each Mortgage Loan at origination complied in all material
respects with applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of
the transactions contemplated hereby will not involve the violation of
any such laws.
(11) As of the Closing Date, neither the Seller nor any
prior holder of any Mortgage has modified the Mortgage in any material
respect (except that a Mortgage Loan may have been modified by a
written instrument which has been recorded or submitted for
recordation, if necessary, to protect the interests of the
Certificateholders and the original or a copy of which has been
delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property
in whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification or satisfaction with
respect thereto.
(12) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if applicable,
in an amount at least equal to the Cut-off Date Stated Principal
Balance of each such Mortgage Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Mortgage
Loan, each such policy is valid and remains in full force and effect,
and each such policy was issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located
and acceptable to FNMA or FHLMC and is in a form acceptable to FNMA or
FHLMC, which policy insures the Seller and successor owners of indebted-
ness secured by the insured Mortgage, as to the first priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance policy.
(13) Each Mortgage Loan was originated (within the meaning
of Section 3(a)(41) of the Securities Exchange Act of 1934, as amended)
by an entity that satisfied at the time of origination the requirements
of Section 3(a)(41) of the Securities Exchange Act of 1934, as amended.
(14) To the best of the Seller's knowledge, all of the
improvements which were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
(15) To the best of the Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
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
substantially one of the forms acceptable to FNMA or FHLMC, with such
riders as have been acceptable to FNMA or FHLMC, as the case may be.
(21) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the related Mortgage Note.
(22) The origination, underwriting and collection practices
used by the Seller with respect to each Mortgage Loan have been in all
respects legal, prudent and customary in the mortgage lending and
servicing business.
(23) There is no pledged account or other security other
than real estate securing the Mortgagor's obligations.
(24) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(25) Each Mortgage Loan contains a customary "due on sale"
clause.
(26) None of the Mortgage Loans provides for a prepayment
penalty.
(27) Each Mortgage Loan which had a Loan-to-Value Ratio at
origination in excess of 80% is the subject of a Primary Insurance
Policy that insures that portion of the principal balance equal to a
specified percentage times the sum of the remaining principal balance of
the related Mortgage Loan, the accrued interest thereon and the related
foreclosure expenses. The specified percentage is either 12% for Loan-
to-Value Ratios between 80.01%, 85.00%, 25% for Loan-to-Value Ratios
between 85.01% and 90.00% or 30% for Loan-to-Value Ratios between 90.01%
and 95.00%. Each such Primary Insurance Policy is issued by a Qualified
Insurer. All provisions of any such Primary Insurance Policy have been
and are being complied with, any such policy is in full force and
effect, and all premiums due thereunder have been paid. Any Mortgage
subject to any such Primary Insurance Policy obligates either the
Mortgagor or the mortgagee thereunder to maintain such insurance and to
pay all premiums and charges in connection therewith, subject, in each
case, to the provisions of Section 3.09(c) of the Pooling and Servicing
Agreement. The Mortgage Rate for each Mortgage Loan is net of any such
insurance premium.
(28) At the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a generally acceptable carrier that provides for fire and
extended coverage and coverage for such other hazards as are customary
in the area where the Mortgaged Property is located in an amount which
is at least equal to the lesser of (i) the maximum insurable value of
the improvements securing such Mortgage Loan or (ii) the greater of (a)
the outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium unit. All
such individual insurance policies and all flood policies referred to in
item
(29) below contain a standard mortgagee clause naming the
Seller or the original mortgagee, and its successors in interest, as
mortgagee, and the Seller has received no notice that any premiums due
and payable thereon have not been paid; the Mortgage obligates the
Mortgagor thereunder to maintain all such insurance including flood
insurance at the Mortgagor's cost and expense, and upon the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(29) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form meeting
the requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the original outstanding
principal balance of the Mortgage Loan, (B) the minimum amount required
to compensate for damage or loss on a replacement cost basis, or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973, as amended.
(30) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the total or partial
condemnation of the Mortgaged Property.
(31) There is no material monetary default existing under
any Mortgage or the related Mortgage Note and, to the best of the
Seller's knowledge, there is no material event which, with the passage
of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
under the Mortgage or the related Mortgage Note; and the Seller has not
waived any default, breach, violation or event of acceleration.
(32) Each Mortgaged Property is improved by a one- to four-
family residential dwelling including condominium units and dwelling
units in PUDs, which, to the best of Seller's knowledge, does not
include cooperatives or mobile homes and does not constitute other than
real property under state law.
(33) Each Mortgage Loan is being serviced by the Master
Servicer.
(34) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan. The Mortgage Note does
not permit or obligate the Master Servicer to make future advances to
the Mortgagor at the option of the Mortgagor.
(35) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or
an escrow of funds has been established in an amount sufficient to pay
for every such item which remains unpaid and which has been assessed,
but is not yet due and payable. Except for (A) payments in the nature
of escrow payments, and (B) interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage proceeds,
whichever is later, to the day which precedes by one month the Due Date
of the first installment of principal and interest, including without
limitation, taxes and insurance payments, the Master Servicer has not
advanced funds, or induced, solicited or knowingly received any advance
of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required by the Mortgage.
(36) Each Mortgage Loan was underwritten in all material
respects in accordance with the Seller's underwriting guidelines as set
forth in the Prospectus Supplement.
(37) Other than with respect to any Streamlined
Documentation Mortgage Loan as to which the loan-to-value ratio of the
related Original Mortgage Loan was less than 75% (or 70% with respect
to Mortgage Loans secured by Mortgaged Properties located in
California) at the time of the origination of such Original Mortgage
Loan, prior to the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan; such appraisal is in
a form acceptable to FNMA and FHLMC.
(38) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and none of the
Mortgage Loans are subject to a buydown or similar arrangement.
(39) Any leasehold estate securing a Mortgage Loan has a
term of not less than five years in excess of the term of the related
Mortgage Loan.
(40) The Mortgage Loans were selected from among the
outstanding fixed-rate one- to four-family mortgage loans in
Countrywide's portfolio at the Closing Date as to which the
representations and warranties made as to the Mortgage Loans set forth
in this Schedule III can be made. Such selection was not made in a
manner intended to adversely affect the interests of Certificateholders.
(41) Except for 17 Mortgage Loans, each Mortgage Loan has a
payment date on or before the Due Date in the month of the first
Distribution Date.
(42) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Trustee certifying that the original
Mortgage Note is a Lost Mortgage Note, if such Mortgage Loan is
subsequently in default, the enforcement of such Mortgage Loan or of the
related Mortgage by or on behalf of the Trustee will not be materially
adversely affected by the absence of the original Mortgage Note. A
"Lost Mortgage Note" is a Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
(43) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
SCHEDULE IV
Form of Monthly Master Servicer Report
<TABLE>
<CAPTION>
LOAN LEVEL REPORTING SYSTEM
DATABASE STRUCTURE
(MONTH, YEAR)
Field Number Field Name Field Type Field Width Dec
------------ ---------------- ------------- ------------ ---------
<S> <C> <C> <C> <C>
1 INVNUM Numeric 4
2 INVBLK Numeric 4
3 INACNU Character 8
4 BEGSCH Numeric 15 2
5 SCHPRN Numeric 13 2
6 TADPRN Numeric 11 2
7 LIQEPB Numeric 11 2
8 ACTCOD Numeric 11
9 ACTDAT Numeric 4
10 INTPMT Numeric 8
11 PRNPMT Numeric 13 2
12 ENDSCH Numeric 13 2
13 SCHNOT Numeric 13 2
14 SCHPAS Numeric 7 3
15 PRINPT Numeric 7 3
16 PRIBAL Numeric 11 2
17 LPIDTE Numeric 13 2
18 DELPRN Numeric 7
19 PPDPRN Numeric 11 2
20 DELPRN Numeric 11 2
21 NXTCHG Numeric 8
22 ARMNOT Numeric 7 3
23 ARMPAS Numeric 7 3
24 ARMPMT Numeric 11 2
25 ZZTYPE Character 2
26 ISSUID Character 1
27 KEYNAME Character 8
TOTAL 240
Suggested Format: DBASE file
Modem transmission
</TABLE>
<TABLE>
<CAPTION>
COUNTRYWIDE HOME LOANS, INC.
LOAN LEVEL REPORTING SYSTEM
- ------ ----- ----- ---------- ------- --------- ------------ ------------ ------- ----- -------- --------- ------- ---- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTOR NUMBER:
----------------------------------------
GENERAL INFORMATION CURRENT MONTH SCHEDULED INFORMATION
- ----------------------------- ---------------------------------------------------------------------------------------------------
Beg. Total End Pass-
Inv. # Blk # CFC # Investor # Balance Principal Curtailment Payoff Amt. A/Code A/Date Interest Principal Balance Note thru P&I
- ------ ----- ----- ---------- ------- --------- ------------ ------------ ------- ----- -------- --------- ------- ---- ----- ----
Loan Total
Count: Remittance:
- ------ ------------
(table continued)
- ----------------- --------- -------- ------------ ----------- ------------ --------- -------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CUTOFF: (DATE)
-------------------------------------
TRIAL BALANCE INFORMATION ARM LOANS ONLY
- ------------------------------------------------------------- ----------------------------------------------
Inv. # UPB LPI Del Prin. PPD Prin. Next Chg. Note Pass-thru P&I
- ----------------- --------- -------- ------------ ----------- ------------ --------- -------------- --------
</TABLE>
EXHIBIT A
(FORM OF SENIOR CERTIFICATE)
(UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.)
(SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").)
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 199_-___
Class ( )
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a
Trust Fund consisting primarily of a pool of conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one- to four-
family residential properties
CWMBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate
does not evidence an obligation of, or an interest in, and is not guaranteed
by the Depositor, the Seller, the Master Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor
the Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ________________________________ is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate Initial
Certificate Balances of all Certificates of the Class to which this
Certificate belongs) in certain monthly distributions with respect to a
Trust Fund consisting primarily of the Mortgage Loans deposited by CWMBS,
Inc. (the "Depositor"). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Countrywide Home Loans, Inc., as seller
(in such capacity, the "Seller") and as master servicer (in such capacity,
the "Master Servicer"), and The Bank of New York, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
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 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 __________,_
19_. THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ________ %.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT OF
____ % PER ANNUM (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH $____________ OF OID PER $1,000 OF THE ORIGINAL PRINCIPAL AMOUNT
OF THIS CERTIFICATE; THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE
FOR PURPOSES OF COMPUTING THE ACCRUAL OF OID IS APPROXIMATELY _________ %
(COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST ACCRUAL
PERIOD IS $__________ PER $1,000 OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE COMPUTED USING THE MONTHLY YIELD AND DAILY COMPOUNDING DURING THE
SHORT ACCRUAL PERIOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE. THE
ACTUAL YIELD TO MATURITY MAY DIFFER FROM THAT SET FORTH ABOVE, AND THE ACCRUAL
OF OID WILL BE ADJUSTED, IN ACCORDANCE WITH SECTION 1272(a)(6) OF THE CODE, TO
TAKE INTO ACCOUNT EVENTS WHICH HAVE OCCURRED DURING ANY ACCRUAL PERIOD. THE
PREPAYMENT ASSUMPTION IS INTENDED TO BE THE PREPAYMENT ASSUMPTION REFERRED
TO IN SECTION 1272(a)(6)(B)(iii) OF THE CODE.)
(THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.)
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR
DELIVERS TO THE TRUSTEE AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. (SUCH REPRESENTATION SHALL
BE DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE TRANSFEREE'S ACCEPTANCE OF
A CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL OWNER'S ACCEPTANCE OF ITS
INTEREST IN A CERTIFICATE OF THIS CLASS.) NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON
BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT
THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL
BE VOID AND OF NO EFFECT.
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 199 -
Class ( )
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class with respect to a Trust Fund consisting primarily
of a pool of conventional loans (the "Mortgage Loans")
secured by first liens on one- to four-family
residential properties
CWMBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate
does not evidence an obligation of, or an interest in, and is not guaranteed
by the Depositor, the Seller, the Master Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor
the Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that _________________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate
Initial Certificate Balances of 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, Countrywide Home Loans, Inc., as seller
(in such capacity, the "Seller") and as master servicer (in such capacity,
the "Master Servicer"), and The Bank of New York, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
(No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from
the registration requirements under said Act and such laws. In the event
that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer. In
the event that such a transfer is to be made within three years from the
date of the initial issuance of Certificates pursuant hereto, there shall
also be delivered (except in the case of a transfer pursuant to Rule 144A of
the Securities Act) to the Trustee an Opinion of Counsel that such transfer
may be made pursuant to an exemption from the Securities Act and such state
securities laws, which Opinion of Counsel shall not be obtained at the
expense of the Trustee, the Seller, the Master Servicer or the Depositor.
The Holder hereof desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor against any liability that
may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.)
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation (letter) from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, nor a person acting on behalf of any such plan, which representation
letter shall not be an expense of the Trustee or the Master Servicer, (ii)
if the purchaser is an insurance company, a representation that the
purchaser is an insurance company which is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60
("PTCE 95- 60")) and that the purchase and holding of such Certificates are
covered under PTCE 95-60, or (iii) in the case of any such Certificate
presented for registration in the name of an employee benefit plan subject
to ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Trustee and the Master Servicer to the effect that the purchase or holding
of such Certificate will not result in the assets of the Trust Fund being
deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee to any
obligation in addition to those undertaken in the Agreement, which Opinion
of Counsel shall not be an expense of the Trustee or the Master Servicer.
(Such representation shall be deemed to have been made to the Trustee by the
Transferee's acceptance of a Certificate of this Class and by a beneficial
owner's acceptance of its interest in a Certificate of this Class.)
Notwithstanding anything else to the contrary herein, any purported transfer
of a Certificate of this Class to or on behalf of an employee benefit plan
subject to ERISA or to the Code without the opinion of counsel satisfactory
to the Trustee as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _____________, 19__
THE BANK OF NEW YORK,
as Trustee
By ____________________
Countersigned:
By __________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
EXHIBIT C
(FORM OF RESIDUAL CERTIFICATE)
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
(THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST"
ISSUED UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO BELOW AND MAY
NOT BE TRANSFERRED TO ANY PERSON EXCEPT IN CONNECTION WITH THE ASSUMPTION BY
THE TRANSFEREE OF THE DUTIES OF THE SERVICER UNDER SUCH AGREEMENT.)
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. :
Cut-off Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
CUSIP :
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 199_-___
evidencing the distributions allocable to the Class A-R
Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional loans (the "Mortgage
Loans") secured by first liens on one- to four-family
residential properties
CWMBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate
does not evidence an obligation of, or an interest in, and is not guaranteed
by the Depositor, the Seller, the Master Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor
the Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ________________________________ is the registered
owner of the Percentage Interest (obtained by dividing the Denomination of
this Certificate by the aggregate Initial Certificate Balances of 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,
Countrywide Home Loans, Inc., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and The Bank
of New York, as trustee (the "Trustee"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which
such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class A-R
Certificate at the Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York.
No transfer of a Class A-R Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee
of such Certificate, acceptable to and in form and substance satisfactory to
the Trustee, to the effect that such transferee is not an employee benefit
plan subject to Section 406 of ERISA or Section 4975 of the Code, nor a
person acting on behalf of any such plan, which representation letter shall
not be an expense of the Trustee or the Master Servicer, or (ii) in the case
of any such Class A-R Certificate presented for registration in the name of
an employee benefit plan subject to ERISA, or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other person acting on behalf of any such plan, an Opinion
of Counsel satisfactory to the Trustee and the Master Servicer to the effect
that the purchase or holding of such Class A-R Certificate will not result
in the assets of the Trust Fund being deemed to be "plan assets" and subject
to the prohibited transaction provisions of ERISA and the Code and will not
subject the Trustee or the Master Servicer to any obligation in addition to
those undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee or the Master Servicer. Notwithstanding anything
else to the contrary herein, any purported transfer of a Class A-R
Certificate to or on behalf of an employee benefit plan subject to ERISA or
to the Code without the opinion of counsel satisfactory to the Trustee as
described above shall be void and of no effect.
Each Holder of this Class A-R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited
to the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class A-R Certificate must be a Permitted Transferee, (ii)
no Ownership Interest in this Class A-R Certificate may be transferred
without delivery to the Trustee of (a) a transfer affidavit of the proposed
transferee and (b) a transfer certificate of the transferor, each of such
documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class A-R Certificate
must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Class A-R
Certificate must agree not to transfer an Ownership Interest in this Class
A- R Certificate if it has actual knowledge that the proposed transferee is
not a Permitted Transferee and (v) any attempted or purported transfer of
any Ownership Interest in this Class A-R Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _____________ , 19__
THE BANK OF NEW YORK,
as Trustee
By ______________________
Countersigned:
By ___________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
EXHIBIT D
(FORM OF NOTIONAL AMOUNT CERTIFICATE)
(SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").)
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
(THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING
THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER THE
CODE TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ____________,
199_. THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS _________%.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT OF ___ % PER ANNUM (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH $__________________ OF OID ON THE INITIAL
POOL STATED PRINCIPAL BALANCE; THE ANNUAL YIELD TO MATURITY OF THIS
CERTIFICATE FOR PURPOSES OF COMPUTING THE ACCRUAL OF OID IS APPROXIMATELY
______________ % (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO THE
SHORT FIRST ACCRUAL PERIOD IS $_______________ ON THE INITIAL POOL STATED
PRINCIPAL BALANCE; AND THE METHOD USED TO CALCULATE THE ANNUAL YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD
IS THE EXACT METHOD AS DEFINED IN PROPOSED TREASURY REGULATIONS. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED
ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE. THE ACTUAL YIELD TO
MATURITY MAY DIFFER FROM THAT SET FORTH ABOVE, AND THE ACCRUAL OF OID WILL
BE ADJUSTED, IN ACCORDANCE WITH SECTION 1272(a)(6) OF THE CODE, TO TAKE INTO
ACCOUNT EVENTS WHICH HAVE OCCURRED DURING ANY ACCRUAL PERIOD. THE
PREPAYMENT ASSUMPTION IS INTENDED TO BE THE PREPAYMENT ASSUMPTION REFERRED
TO IN SECTION 1272(a)(6)(B)(iii) OF THE CODE.)
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Notional Amount
of this Certificate
("Denomination") :
Initial Notional Amount
of all Certificates
of this Class :
CUSIP :
CWMBS, INC.
Mortgage Pass-Through Certificates, Series 199_-___
Class ( )
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to a Trust Fund consisting primarily of a pool
of conventional loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties
CWMBS, Inc., as Depositor
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, Countrywide Home Loans, Inc., as seller (in such capacity, the
"Seller") and as master servicer (in such capacity, the "Master Servicer"),
and The Bank of New York, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: , 19
------------- --
THE BANK OF NEW YORK,
as Trustee
By ______________________
Countersigned:
By ___________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee(Reserved)
EXHIBIT E
(Form of Reverse of Certificates)
CWMBS, INC.
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as CWMBS, Inc. Mortgage Pass-Through Certificates, of the Series
specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the
Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the Certificate-
holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability
under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the
rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
The Record Date applicable to each Distribution Date is the last Business
Day of the month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least
five Business Days prior to the related Record Date and such
Certificateholder
shall satisfy the conditions to receive such form of payment set forth in
the Agreement, or, if not, by check mailed by first class mail to the
address of such Certificateholder appearing in the Certificate Register.
The final distribution on each Certificate
will be made in like manner, but only upon presentment and surrender of such
Certificate at the Corporate Trust Office or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in
lieu hereof whether or not notation of such consent is made upon this Cer-
tificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in New York, New York, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Seller and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and
neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the Pool Stated Principal Balance is
less than 10% of the aggregate Cut-off Date Principal Balances of the
Mortgage Loans, the Master Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property in respect thereof and the
distribution to Certificateholders of all amounts required to be distributed
pursuant to the Agreement. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of
the last
survivor of the descendants living at the date of the Agreement of a certain
person named in the Agreement.
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.
STATE OF )
) ss.:
COUNTY OF )
On the __ day of_____________, 19__ before me, a notary public
in and for said State, personally appeared __________________________________,
known to me who, being by me duly sworn, did depose and say that he executed
the foregoing instrument.
___________________________________
Notary Public
(Notarial Seal)
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, Countrywide
Home Loans, Inc., as Seller and Master
Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 1998-2
-------------------------------------------------
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 schedule) it has received:
(i) the original Mortgage Note endorsed 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).
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, Countrywide Home Loans,
Inc., as Seller and Master Servicer, and The
Bank of New York, as Trustee, Mortgage Pass-Through
Certificates, Series 1998-2
----------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the
undersigned, as Trustee, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attached Document Exception Report) it has received:
(i) the original Mortgage Note endorsed in the form provided in
Section 2.01(c) of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator to
the Seller.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form provided
in Section 2.01(c) of the Pooling and Servicing Agreement, or, if the
Depositor has certified or the Trustee otherwise knows that the related
Mortgage has not been returned from the applicable recording office, a copy
of the assignment of the Mortgage (excluding information to be provided by
the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
originator to the Seller.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to
such Mortgage Loan, and (b) the information set forth in items (i), (ii),
(iii), (iv), (vi), and (xi) of the definition of the "Mortgage Loan
Schedule" in Section 1.01 of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in
the Pooling and Servicing Agreement. The Trustee makes no representations
as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By : __________________________
Name:
Title:
EXHIBIT I
TRANSFER AFFIDAVIT
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1998-3
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"), Countrywide Home Loans, Inc., as seller
and master servicer and The Bank of New York, as Trustee. Capitalized terms
used, but not defined herein or in Exhibit 1 hereto, shall have the meanings
ascribed to such terms in the Agreement. The Transferee has authorized the
undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate either (i) for its own account or
(ii) as nominee, trustee or agent for another Person and has attached hereto
an affidavit from such Person in substantially the same form as this
affidavit. The Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent;
and (iii) the Person otherwise liable for the tax shall be relieved of
liability for the tax if the subsequent Transferee furnished to such Person
an affidavit that such subsequent Transferee is a Permitted Transferee and,
at the time of Transfer, such Person does not have actual knowledge that the
affidavit is false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not
a Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period
with respect to which the record holder furnishes to the pass-through entity
an affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust 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 United States federal income tax purposes regardless of its connection
with the conduct of a trade or business within the United States, and (vi)
any other Person so designated by the Trustee based upon an Opinion of
Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that certain Certificates are Outstanding. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in Code Section 7701 or successor provisions. A
corporation will not be treated as an instrumentality of the United States
or of any State or political subdivision thereof if all of its activities
are subject to tax, and, with the exception of the FHLMC, a majority of its
board of directors is not selected by such governmental unit.
"Person": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
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
______________________
Date
CWMBS, Inc.
155 North Lake Avenue
Pasadena, California 91101
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attention: Mortgage-Backed Securities Group
Series 1998-3
Re: CWMBS, Inc., Mortgage Pass-Through Certificates,
Series 1998-3, 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)
___________________________
Date
CWMBS, Inc.
155 North Lake Avenue Pasadena,
California 91101
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attention: Mortgage-Backed Securities Group
Series 1998-2
Re: CWMBS, Inc. Mortgage Pass-Through Certificates,
Series 1998-2, Class __
-----------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws,
(b) we are an "accredited investor," as defined in Regulation D under the
Act, and have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
investments in the Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase
of the Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Certificates,
(d) either (i) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan or
arrangement that is subject to Section 4975 of the Internal Revenue Code of
1986, as amended, nor are we acting on behalf of any such plan or
arrangement, nor are we using the assets of any such plan or arrangement to
effect such acquisition or (ii) if we are an insurance company, a
representation that we are an insurance company which is purchasing such
Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with
clause (g) below), (f) we have not offered or sold any Certificates to, or
solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, or taken any
other action which would result in a violation of Section 5 of the Act, and
(g) we will 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
________________________
Date
CWMBS, Inc.
155 North Lake Avenue
Pasadena, California 91101
Attention: David A. Spector
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attention: Mortgage-Backed Securities Group
Series 1998-2
Re: CWMBS, Inc. Mortgage Pass-Through Certificates,
Series 1998-2, Class __
-----------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws,
(b) we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and
receive answers from the Depositor concerning the purchase of the
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) either
(i) we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or a plan or arrangement
that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan or arrangement, nor
are we using the assets of any such plan or arrangement to effect such
acquisition or (ii) if we are an insurance company, a representation that we
are an insurance company which is purchasing such Certificates with funds
contained in an "insurance company general account" (as such term is defined
in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any
other similar security from, or otherwise approached or negotiated with
respect to the Certificates, any interest in the Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the
Certificates under the Securities Act or that would render the disposition
of the Certificates a violation of Section 5 of the Securities Act or
require registration pursuant thereto, nor will act, nor has authorized or
will authorize any person to act, in such manner with respect to the
Certificates, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of
the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to
be a qualified institutional buyer that purchases for its own account or for
the account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A, or
(ii) pursuant to another exemption from registration under the Securities
Act.
ANNEX 1 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
(For Transferees Other Than Registered Investment Companies)
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer
owned and/or invested on a discretionary basis either at least $100,000 in
securities or, if Buyer is a dealer, Buyer must own and/or invest on a
discretionary basis at least $10,000,000 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule
144A and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
----------------- bank, savings and loan association or similar
institution), Massachusetts or similar business trust, partner-
ship, 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)
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 under-stands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
______________________________
Print Name of Buyer or Adviser
By: __________________________
Name:
Title:
IF AN ADVISER:
------------------------------
Print Name of Buyer
Date: _________________________
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1998-2
Loan Information
- ----------------
Name of Mortgagor: _____________________________
Servicer _____________________________
Loan No.:
Trustee
- -------
Name: _____________________________
Address: _____________________________
_____________________________
Trustee
Mortgage File No.: _____________________________
The undersigned Master Servicer hereby acknowledges that it has
received from The Bank of New York, as Trustee for the Holders of Mortgage
Pass- Through Certificates, of the above-referenced Series, the documents
referred to below (the "Documents"). All capitalized terms not otherwise
defined in this Request for Release shall have the meanings given them in
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series among the Trustee, Countrywide Home
Loans, Inc., as Seller and Master Servicer and 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.
COUNTRYWIDE HOME LOANS, INC.
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 January 1, 1998
among Countrywide Home Loans, Inc., as Seller and as Master
Servicer, CWMBS, Inc. and The Bank of New York as Trustee
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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 (Countrywide Home Loans, Inc. hereby
certifies that all amounts have been received.)
2. Mortgage Loan Liquidated (Countrywide Home Loans, Inc. hereby
certifies that all proceeds of foreclosure, insurance, or other
liquidation have been finally received.)
3. Mortgage Loan in Foreclosure.
4. Other (explain):
If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your
possession relating to the above-specified Mortgage Loan. If item 3 or 4 is
checked, upon return of all of the above documents to you as Trustee, please
acknowledge your receipt by signing in the space indicated below, and
returning this form.
COUNTRYWIDE HOME LOANS, INC.
155 North Lake Ave.
Pasadena CA 91101
By: __________________________
Name: ________________________
Title: _______________________
Date: _______________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By: __________________________
Name: ________________________
Title: _______________________
Date: ________________________
