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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 28, 1999
CWMBS, INC. (as depositor under the Pooling and Servicing
Agreement, dated as of January 1, 1999, providing for the
issuance of the CWMBS, INC., Residential Asset Securitization
Trust 1999-A2 Mortgage Pass-Through Certificates, Series
1999-B).
CWMBS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-53861 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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<PAGE>
Item 5. Other Events.
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On January 28, 1999, CWMBS, Inc. (the "Company") entered into a
Pooling and Servicing Agreement dated as of January 1, 1999 (the "Pooling and
Servicing Agreement"), by and among the Company, as depositor, IndyMac, Inc.
("IndyMac"), as seller, PNC Mortgage Securities Corp. ("PNC"), 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
1999-B (the "Certificates"). The Pooling and Servicing Agreement is annexed
hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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Not applicable.
Not applicable.
Exhibits:
99.1. Pooling and Servicing Agreement, dated as of January 1, 1999,
by and among the Company, IndyMac, PNC and the Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CWMBS, INC.
By: /s/ Celia Coulter
--------------------------
Celia Coulter
Vice President
Dated: October 29, 1999
<PAGE>
Exhibit Index
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Exhibit Page
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99.1. Pooling and Servicing Agreement,
dated as of January 1, 1999, by
and among, the Company, IndyMac, PNC
and the Trustee 5
<PAGE>
EXHIBIT 99.1
<PAGE>
Execution Copy
CWMBS, INC.,
Depositor
INDYMAC, INC.,
Seller
PNC MORTGAGE SECURITIES CORP.,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1999
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RESIDENTIAL ASSET SECURITIZATION TRUST 1999-A2
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-B
<PAGE>
TABLE OF CONTENTS
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Table of Contents
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.......................1
Section 2.02. Acceptance by the Trustee of the Mortgage Loans....4
Section 2.03. Representations, Warranties and Covenants of the
Seller and the Master Servicer.....................5
Section 2.04. Representations and Warranties of the Depositor
as to the Mortgage Loans..........................7
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases......................8
Section 2.06. Execution and Delivery of Certificates.............8
Section 2.07. REMIC Matters......................................8
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans..........1
Section 3.02. Subservicing; Enforcement of the Obligations
of Servicers.......................................2
Section 3.03. Successor Servicers................................2
Section 3.04. Liability of the Master Servicer...................3
Section 3.05. No Contractual Relationship Between Servicers and
the Trustee........................................3
Section 3.06. Rights of the Depositor and the Trustee in Respect
of the Master Servicer.............................3
Section 3.07. Trustee to Act as Master Servicer..................4
Section 3.08. Collection of Mortgage Loan Payments; Custodial
Accounts; Investment Account; Distribution Account.4
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts....................................8
Section 3.10. Access to Certain Documentation and Information
Regarding the Mortgage Loans.......................8
Section 3.11. Permitted Withdrawals from the Investment Account,
and the Distribution Account.......................9
Section 3.12. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies........................10
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption
Agreements........................................12
Section 3.14. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans..............13
Section 3.15. Trustee to Cooperate; Release of Mortgage Files...16
Section 3.16. Documents, Records and Funds in Possession of the
Master Servicer to be Held for the Trustee........17
Section 3.17. Servicing Compensation............................18
Section 3.18. Annual Statement as to Compliance.................18
Section 3.19. Annual Independent Public Accountants' Servicing
Statement; Financial Statements...................19
Section 3.20. Errors and Omissions Insurance; Fidelity Bonds....19
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances...........................................1
Section 4.02. Priorities of Distribution.........................1
Section 4.03. Indemnification....................................4
Section 4.04. [Reserved].........................................4
Section 4.05. Allocation of Realized Losses......................4
Section 4.06. Monthly Statements to Certificateholders...........5
Section 4.07. Determination of Pass-Through Rates for COFI
Certificates.......................................7
Section 4.08. Determination of Pass-Through Rates for LIBOR
Certificates.......................................9
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates...................................1
Section 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates.......................1
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..6
Section 5.04. Persons Deemed Owners..............................6
Section 5.05. Access to List of Certificateholders' Names
and Addresses......................................6
Section 5.06. Maintenance of Office or Agency....................7
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the
Master Servicer....................................1
Section 6.02. Merger or Consolidation of the Depositor
or the Master Servicer.............................1
Section 6.03. Limitation on Liability of the Depositor, the
Seller, the Master Servicer and Others.............1
Section 6.04. Limitation on Resignation of the Master Servicer...2
ARTICLE VII
DEFAULT
Section 7.01. Events of Default..................................1
Section 1.02. Trustee to Act; Appointment of Successor...........2
Section 1.03. Notification to Certificateholders.................3
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of the Trustee..............................1
Section 8.02. Certain Matters Affecting the Trustee..............2
Section 8.03. Trustee Not Liable for Certificates or
Mortgage Loans.....................................3
Section 8.04. Trustee May Own Certificates.......................3
Section 8.05. Trustee's Fees and Expenses........................3
Section 8.06. Eligibility Requirements for the Trustee...........4
Section 8.07. Resignation and Removal of the Trustee.............4
Section 8.08. Successor Trustee..................................5
Section 8.09. Merger or Consolidation of the Trustee.............5
Section 8.10. Appointment of Co-Trustee or Separate Trustee......5
Section 8.11. Tax Matters........................................7
Section 8.12. Periodic Filings...................................9
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of
all Mortgage Loans.................................1
Section 9.02. Final Distribution on the Certificates.............1
Section 9.03. Additional Termination Requirements................2
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment..........................................1
Section 10.02. Recordation of Agreement; Counterparts.............2
Section 10.03. Governing Law......................................2
Section 10.04. Intention of Parties...............................3
Section 10.05. Notices............................................3
Section 10.06. Severability of Provisions.........................4
Section 10.07. Assignment.........................................4
Section 10.08. Limitation on Rights of Certificateholders.........4
Section 10.09. Inspection and Audit Rights........................5
Section 10.10. Certificates Nonassessable and Fully Paid..........5
SCHEDULES
Schedule I: Mortgage Loan Schedule............................S-I-1
Schedule II: Representations and Warranties of the Seller.....S-II-1
Schedule III: Representations and Warranties as to the
Mortgage Loans..................................S-III-1
Schedule IV: Representations and Warranties of the
Master Servicer..................................S-IV-1
EXHIBITS
Exhibit A: Form of Senior Certificate..........................A-1
Exhibit B: Form of Subordinated Certificate....................B-1
Exhibit C: Form of Residual Certificate........................C-1
Exhibit D: Form of Notional Amount Certificate.................D-1
Exhibit E: Form of Reverse of Certificates.....................E-1
Exhibit F: Form of Servicing Agreement.........................F-1
Exhibit G: Form of Initial Certification of Trustee............G-1
Exhibit H: Form of Final Certification of Trustee..............H-1
Exhibit I: Form of Transfer Affidavit..........................I-1
Exhibit J: Form of Transferor Certificate......................J-1
Exhibit K: Form of Investment Letter (Non-Rule 144A)...........K-1
Exhibit L Form of Rule 144A Letter............................L-1
Exhibit M: Form of Request for Release (for Trustee)...........M-1
Exhibit N: Form of Request for Release (Mortgage Loan Paid
in Full, Repurchased and Released)..................N-1
Exhibit O: [Reserved]..........................................O-1
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of January 1,
1999, among CWMBS, INC., a Delaware corporation, as depositor (the "Depositor"),
INDYMAC, INC. ("IndyMac"), a Delaware corporation, as seller (the "Seller"), PNC
MORTGAGE SECURITIES CORP., a Delaware corporation, as master servicer (the
"Master Servicer"), and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the "Trustee"),
WITNESSETH THAT:
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows.
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund for
federal income tax purposes will consist of a single REMIC. The Certificates
will represent the entire beneficial ownership interest in the Trust Fund. The
Regular Certificates will represent the "regular interests" in the Trust Fund
and the Residual Certificates will represent the single "residual interest" in
the Trust Fund. The "latest possible maturity date" for federal income tax
purposes of all interests created hereby will be the Latest Possible Maturity
Date.
The following table sets forth characteristics of the
Certificates, together with the minimum denominations and integral multiples in
excess thereof in which such Classes shall be issuable (except that one
Certificate of each Class of Certificates may be issued in a different amount
and, in addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount).
<PAGE>
<TABLE>
<CAPTION>
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Integral
Class Multiples
Certificate Pass-Through Minimum in Excess
Balance Rate Denomination of Minimum
- ------------------------- ------------------------ --------------------- --------------------- =====================
- ------------------------- ------------------------ --------------------- --------------------- =====================
<S> <C> <C> <C> <C>
Class A-1 $104,581,355.00 6.25% $25,000 $1,000
- ------------------------- ------------------------ --------------------- --------------------- =====================
- ------------------------- ------------------------ --------------------- --------------------- =====================
Class PO $154,662.00 (3) $25,000 $1,000
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- ------------------------- ------------------------ --------------------- --------------------- =====================
Class X (1) (4) $25,000(2) $1,000(2)
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- ------------------------- ------------------------ --------------------- --------------------- =====================
Class A-R $100.00 6.25% $100 N/A
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- ------------------------- ------------------------ --------------------- --------------------- =====================
Class B-1 $2,400,202.00 6.25% $25,000 $1,000
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- ------------------------- ------------------------ --------------------- --------------------- =====================
Class B-2 $600,051.00 6.25% $25,000 $1,000
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- ------------------------- ------------------------ --------------------- --------------------- =====================
Class B-3 $381,850.00 6.25% $25,000 $1,000
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- ------------------------- ------------------------ --------------------- --------------------- =====================
Class B-4 $272,750.00 6.25% $100,000 $1,000
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- ------------------------- ------------------------ --------------------- --------------------- =====================
Class B-5 $327,301.00 6.25% $100,000 $1,000
- ------------------------- ------------------------ --------------------- --------------------- =====================
- ------------------------- ------------------------ --------------------- --------------------- =====================
Class B-6 $381,850.00 6.25% $100,000 $1,000
- ------------------------- ------------------------ --------------------- --------------------- =====================
</TABLE>
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(1) The Class X Certificates will be Notional Amount Certificates, will
have no principal balance and will bear interest on their Notional
Amount (initially, $104,746,724).
(2) The minimum denomination is based on the Notional Amount.
(3) The Class PO Certificates will be Principal Only Certificates and will
not bear interest.
(4) The Pass-Through Rate for the Class X Certificates for any
Distribution Date will be equal to the excess of (a) the weighted
average of the Adjusted Net Mortgage Rates of the Non-Discount
Mortgage Loans over (b) 6.25% per annum. The Pass-Through Rate for the
Class X Certificates for the first Distribution Date is approximately
0.671%.
<PAGE>
Set forth below are designations of Classes of Certificates to the
categories used herein:
<TABLE>
<CAPTION>
<S> <C>
Accretion Directed
Certificates ................................... None.
Accrual Certificates................................. None.
Book-Entry Certificates.............................. All Classes of Certificates other than the Physical
Certificates.
COFI Certificates.................................... None.
Component Certificates............................... None.
Components........................................... For purposes of calculating distributions of
principal and/or interest, the Component
Certificates, if any, will be comprised of multiple
payment components having the designations, Initial
Component Balances or Notional Amounts and
Pass-Through Rates set forth below:
Initial
Component
Designation Notional Amount 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.................................... Residual Certificates and Subordinated Certificates.
Floating Rate Certificates........................... None.
Inverse Floating Rate
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 A-R Certificates and Private Certificates.
Planned Principal Classes............................ None.
Primary Planned Principal
Classes......................................... None.
Principal Only Certificates.......................... Class PO Certificates.
Private Certificates................................. Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies...................................... S&P and Duff & Phelps.
Regular Certificates................................. All Classes of Certificates other than the Class
A-R Certificates.
Residual Certificates................................ Class A-R Certificates.
Scheduled Principal Classes.......................... None.
Secondary Planned
Principal Classes............................... None.
Senior Certificates.................................. Class A-1, Class PO, Class X and Class A-R
Certificates.
Subordinated Certificates............................ Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Certificates.
Targeted Principal Classes........................... None.
</TABLE>
With respect to any of the foregoing designations as to which
the corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
<PAGE>
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Accretion Directed Certificates: As specified in the
Preliminary Statement.
Accrual Amount: Not applicable.
Accrual Certificates: As specified in the Preliminary
Statement.
Accrual Termination Date: Not applicable.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the sum of the Master
Servicing Fee Rate and the related Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at
any time, the per annum rate equal to the Mortgage Rate less the related Expense
Rate. For purposes of determining whether any Substitute Mortgage Loan is a
Discount Mortgage Loan or a Non-Discount Mortgage Loan and for purposes of
calculating the applicable PO Percentage and applicable Non-PO Percentage, each
Substitute Mortgage Loan shall be deemed to have an Adjusted Net Mortgage Rate
equal to the Adjusted Net Mortgage Rate of the Deleted Mortgage Loan for which
it is substituted.
Advance: The payment required to be made by the Master
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such payment being equal to the aggregate of payments of principal
and interest (net of the Master Servicing Fee and the applicable Servicing Fee
and net of any net income in the case of any REO Property) on the Mortgage Loans
that were due on the related Due Date and not received as of the close of
business on the related Determination Date, less the aggregate amount of any
such delinquent payments that the Master Servicer has determined would
constitute a Nonrecoverable Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Allocable Share: As to any Distribution Date and any Mortgage
Loan (i) with respect to the Class X Certificates, (a) the ratio that (x) the
excess, if any, of the Adjusted Net Mortgage Rate with respect to such Mortgage
Loan over the Required Coupon bears to (y) such Adjusted Net Mortgage Rate or
(b) if the Adjusted Net Mortgage Rate with respect to such Mortgage Loan does
not exceed the Required Coupon, zero, (ii) with respect to the Class PO
Certificates, zero and (iii) with respect to each other Class of Certificates
the product of (a) the lesser of (I) the ratio that the Required Coupon bears to
such Adjusted Net Mortgage Rate and (II) one, multiplied by (b) the ratio that
the amount calculated with respect to such Distribution Date for such Class
pursuant to clause (i) of the definition of Class Optimal Interest Distribution
Amount (without giving effect to any reduction of such amount pursuant to
Section 4.02(d)) bears to the amount calculated with respect to such
Distribution Date for each Class of Certificates pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving effect
to any reduction of such amount pursuant to Section 4.02(d)).
Amount Available for Senior Principal: As to any Distribution
Date Available Funds for such Distribution Date, reduced by the aggregate amount
distributable (or allocable to the Accrual Amount, if applicable) on such
Distribution Date in respect of interest on the Senior Certificates pursuant to
Section 4.02(a)(i).
Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Investment Account at the close of
business on the related Determination Date on account of (i) Principal
Prepayments and Liquidation Proceeds received in the month of such Distribution
Date and (ii) all Scheduled Payments due after the related Due Date.
Applicable Credit Support Percentage: As defined in Section
4.02(e).
Appraised Value: With respect to any Mortgage Loan, the
Appraised Value of the related Mortgaged Property shall be: (i) with respect to
a Mortgage Loan other than a Refinancing Mortgage Loan, the lesser of (a) the
value of the Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan; (ii) with respect
to a Refinancing Mortgage Loan, the value of the Mortgaged Property based upon
the appraisal made at the time of the origination of such Refinancing Mortgage
Loan.
Available Funds: As to any Distribution Date, the sum of (a)
the aggregate amount held in the Investment 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 Investment Account
pursuant to clauses (i) - (viii), inclusive, of Section 3.11(a) and amounts
permitted to be withdrawn from the Distribution Account pursuant to clauses (i)
- - (iii), inclusive, of Section 3.11(b), (b) the amount of the related Advance,
(c) in connection with Defective Mortgage Loans, as applicable, the aggregate of
the Purchase Prices and Substitution Adjustment Amounts deposited on the related
Distribution Account Deposit Date and (d) any amount deposited on the related
Distribution Account Deposit Date pursuant to Section 3.12.
Bankruptcy Code: The United States Bankruptcy Reform Act of
1978, as amended.
Bankruptcy Coverage Termination Date: The point in time at
which the Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a
Deficient Valuation or Debt Service Reduction; provided, however, that a
Bankruptcy Loss shall not be deemed a Bankruptcy Loss hereunder so long as the
Master Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any related escrow payments in
respect of such Mortgage Loan are being advanced on a current basis by the
Master Servicer, in either case without giving effect to any Debt Service
Reduction or Deficient Valuation.
Bankruptcy Loss Coverage Amount: As of any Determination Date,
the Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated to
the Certificates since the Cut-off Date and (ii) any permissible reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee to the effect that any such reduction will not result in a
downgrading of the then current ratings assigned to the Classes of Certificates
rated by it.
Blanket Mortgage: The mortgage or mortgages encumbering the
Cooperative Property.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the City of New York, New York,
Chicago, Illinois, 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.
Buydown Agreement: An agreement between a Person and a
Mortgagor pursuant to which the Person has provided a Buydown Fund.
Buydown Fund: A fund provided by the originator of a Mortgage
Loan or another Person for a Buydown Loan that provides an amount sufficient to
subsidize regularly scheduled principal and interest payments due on the Buydown
Loan for a period. Buydown Funds may be (i) funded at the par values of future
payment subsidies or (ii) funded in an amount less than the par values of future
payment subsidies, and determined by discounting the par values at the rate of
interest accruing on the funded amounts, in which case they will be deposited in
an account bearing interest. Buydown Funds may be held in a separate Buydown
Fund Account or may be held in a Custodial Account for P&I or a Custodial
Account for Reserves and monitored by a Servicer.
Buydown Fund Account: A separate Eligible Account or Accounts
maintained pursuant to Section 3.08 (c).
Buydown Loan: A Mortgage Loan for which the Mortgage Rate has
been subsidized through a Buydown Fund provided at the time of its origination.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Certificate at any
date, the maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof (A)
minus the sum of (i) all distributions of principal previously made with respect
thereto and (ii) all Realized Losses allocated thereto and, in the case of any
Subordinated Certificates, all other reductions in Certificate Balance
previously allocated thereto pursuant to Section 4.05 and (B) in the case of any
Class of Accrual Certificates, increased by the Accrual Amount added to the
Class Certificate Balance of such Class prior to such date.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder.
Class: All Certificates bearing the same class designation as
set forth in the Preliminary Statement.
Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and
Class, the amount by which the amount described in clause (i) of the definition
of Class Optimal Interest Distribution Amount for such Class exceeds the amount
of interest actually distributed on such Class on such Distribution Date
pursuant to such clause (i).
Class Optimal Interest Distribution Amount: With respect to
any Distribution Date and interest-bearing Class, the sum of (i) one month's
interest accrued during the related Interest Accrual Period at the Pass-Through
Rate for such Class, on the related Class Certificate Balance or Notional
Amount, as applicable, subject to reduction pursuant to Section 4.02(d), and
(ii) any Class Unpaid Interest Amounts for such Class.
Class PO Deferred Amount: As to any Distribution Date, the
aggregate of the applicable PO Percentage of each Realized Loss, other than any
Excess Loss, to be allocated to the Class PO Certificates on such Distribution
Date on or prior to the Senior Credit Support Depletion Date or previously
allocated to the Class PO Certificates and not yet paid to the Holders of the
Class PO Certificates.
Class Subordination Percentage: With respect to any
Distribution Date and each Class of Subordinated Certificates, the fraction
(expressed as a percentage) the numerator of which is the Class Certificate
Balance of such Class of Subordinated Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate of the Class
Certificate Balances of all Classes of Certificates immediately prior to such
Distribution Date.
Class Unpaid Interest Amounts: As to any Distribution Date and
Class of interest-bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to clause
(ii) of the definition of Class Optimal Interest Distribution Amount.
Closing Date: January 28, 1999.
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.
Component Notional Amount: Not applicable.
Cooperative Loan: Any Mortgage Loan secured by Cooperative
Shares and a Proprietary Lease.
Cooperative Property: The real property and improvements owned
by the Cooperative Corporation, including the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative
Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative Property.
Corporate Trust Office: The designated office of the Trustee
in the State of New York at which at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 101 Barclay Street,
12E, New York, New York 10286 (Attn: Mortgage-Backed Securities Group, CWMBS,
Inc. Series 1999-B), facsimile no. (212) 815-4135 and which is the address to
which notices to and correspondence with the Trustee should be directed.
Custodial Account for P&I: The Eligible Account maintained by
each Servicer pursuant to its Servicing Agreement as the custodial account for
principal and interest and caused by the Master Servicer to be maintained
pursuant to Section 3.08(b). Any amount that is at any time held in an account
that ceases to be an Eligible Account shall be withdrawn promptly and remitted
to the Investment Account.
Custodial Account for Reserves: The Eligible Account
maintained by each Servicer pursuant to its Servicing Agreement as the custodial
account for reserves and caused by the Master Servicer to be maintained pursuant
to Section 3.08(b). Any amount that is at any time held in an account that
ceases to be an Eligible Account shall be withdrawn promptly and remitted to the
Investment Account.
Cut-off Date: January 1, 1999.
Cut-off Date Pool Principal Balance: $109,100,122.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became the subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required
to be repurchased pursuant to Section 2.02 or 2.03.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a Book-Entry
Certificate pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03(d).
Delinquent: A Mortgage Loan is "Delinquent" if any regularly
scheduled monthly payment due thereon is not made by the close of business on
the day such monthly payment is due. A Mortgage Loan is "30 days Delinquent" if
such monthly payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
monthly payment was due. The determination of whether a Mortgage Loan is "60
days Delinquent", "90 days Delinquent", etc. shall be made in like manner.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the "Initial Notional Amount of this Certificate" or, if neither
of the foregoing, the Percentage Interest appearing on the face thereof.
Depositor: CWMBS, Inc., a Delaware corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is Cede & Co., as the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As to any Distribution Date, the 18th day
of each month or if such 18th day is not a Business Day the next succeeding
Business Day; provided, however, that if such next succeeding Business Day is
less than two Business Days prior to the related Distribution Date, then the
Determination Date shall be the next Business Day preceding the 18th day of such
month.
Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net
Mortgage Rate that is less than the Required Coupon.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.08(f) in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWMBS, Inc. Mortgage Pass-Through
Certificates, Series 1999-B." Funds deposited in the Distribution Account
(exclusive of the Master Servicing Fee) 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, 2:30 P.M. Central 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 1999.
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 Co., 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 Co., 55 E. 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, but only if Moody's is
not a Rating Agency) have the highest short-term ratings of each Rating Agency
at the time any amounts are held on deposit therein, or (ii) an account or
accounts in a depository institution or trust company in which such accounts are
insured by the FDIC or the SAIF (to the limits established by the FDIC or the
SAIF) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders have a claim with respect to the funds in
such account or a perfected first priority security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution or trust company in which such account is maintained, or
(iii) a trust account or accounts maintained with the trust department of a
federal or state chartered depository institution or trust company, acting in
its fiduciary capacity or (iv) any other account acceptable to each Rating
Agency. Eligible Accounts may bear interest, and may include, if otherwise
qualified under this definition, accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and maintained pursuant to Section 3.09(a).
Event of Default: As defined in Section 7.01.
Excess Loss: The amount of any (i) Fraud Loss realized after
the Fraud Loss Coverage Termination Date, (ii) Special Hazard Loss realized
after the Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss
realized after the Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the amount, if any, by which the sum of any Liquidation Proceeds of such
Mortgage Loan received in the calendar month in which such Mortgage Loan became
a Liquidated Mortgage Loan, net of any amounts previously reimbursed to the
Master Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal balance of
such Liquidated Mortgage Loan as of the Due Date in the month in which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at
the Mortgage Rate from the Due Date as to which interest was last paid or
advanced (and not reimbursed) to Certificateholders up to the Due Date
applicable to the Distribution Date immediately following the calendar month
during which such liquidation occurred.
Expense Fees: As to each Mortgage Loan, the sum of the related
Servicing Fee, Master Servicing Fee, and Trustee Fee.
Expense Rate: As to each Mortgage Loan, the sum of the related
Servicing Fee Rate, Master Servicing Fee Rate and Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
Fitch: Fitch 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, $1,091,001
subject to reduction from time to time, by the amount of Fraud Losses allocated
to the Certificates. On each anniversary of the Cut-off Date, the Fraud Loss
Coverage Amount will be reduced as follows: (a) on the first, second, third and
fourth anniversaries of the Cut-off Date, to an amount equal to the lesser of
(i) 1% of the then current Pool Principal Balance and (ii) the excess of the
Fraud Loss Coverage Amount as of the preceding anniversary of the Cut-off Date
(or, in the case of the first such anniversary, as of the Cut-off Date) over the
cumulative amount of Fraud Losses allocated to the Certificates since such
preceding anniversary or the Cut-off Date, as the case may be, and (b) on the
fifth anniversary of the Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at
which the Fraud Loss Coverage Amount is reduced to zero.
Index: With respect to any Interest Accrual Period for the
COFI Certificates, the then applicable index used by the Trustee pursuant to
Section 4.07 to determine the applicable Pass-Through Rate for such Interest
Accrual Period for the COFI Certificates.
Indirect Participant: A broker, dealer, bank or other
financial institution or other Person that clears through or maintains a
custodial relationship with a Depository Participant.
Initial Bankruptcy Loss Coverage Amount: $100,000.
Initial Component Balance: As specified in the Preliminary
Statement.
Initial LIBOR Rate: Not applicable.
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 each Class of 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.
Investment Account: The commingled Eligible Account or
Accounts (which shall be commingled only with investment accounts related to
series of pass-through certificates with a class of certificates which has a
rating equal to the highest rating assigned to any Class of Certificates by a
Rating Agency) created and maintained by the Master Servicer pursuant to Section
3.08(e) in the trust department of the Investment Depository bearing a
designation acceptable to the Rating Agencies, but only as to the contents of
that account that are attributable to the Mortgage Loans.
Investment Depository: The Chase Manhattan Bank, New York, New
York or another bank or trust company designated from time to time by the Master
Servicer in writing to the Trustee and the Depositor, and acceptable to the
Rating Agencies.
Last Scheduled Distribution Date: The Distribution Date in the
month immediately following the month of the latest scheduled maturity date for
any of the Mortgage Loans.
Latest Possible Maturity Date: The Distribution Date following
the third anniversary of the scheduled maturity date of the Mortgage Loan having
the latest scheduled maturity date as of the Cut-off Date.
LIBOR: The London interbank offered rate for one-month United
States dollar deposits calculated in the manner described in Section 4.08.
LIBOR Certificates: As specified in the Preliminary Statement.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the Master Servicer has certified (in accordance with this
Agreement) that it has received all amounts it expects to receive in connection
with the liquidation of such Mortgage Loan including the final disposition of an
REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Master Servicing Fees, Servicing
Advances and Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as
to any date of determination, the fraction (expressed as a percentage) the
numerator of which is the principal balance of the related Mortgage Loan at such
date of determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
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: PNC Mortgage Securities Corp., a Delaware
corporation, and its successors and assigns, in its capacity as master servicer
hereunder.
Master Servicer Advance Date: As to any Distribution Date,
2:30 P.M. Central time on the Business Day immediately preceding such
Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to one month's interest at the related Master
Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan or, in
the event of any payment of interest which accompanies a Principal Prepayment in
Full, interest at the Master Servicing Fee Rate on the Stated Principal Balance
of such Mortgage Loan for the period covered by such payment of interest,
subject to reduction as provided in Section 3.17.
Master Servicing Fee Rate: With respect to each Mortgage Loan,
0.030% per annum.
Modified Mortgage Loan: Any Mortgage Loan which the Master
Servicer has modified pursuant to Section 3.14(c).
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.06.
Moody's: Moody's Investors Service, Inc., or any successor
thereto. If Moody's is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New York, New York
10007, Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof as from time to time
are held as a part of the Trust Fund (including any REO Property), the mortgage
loans so held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the addition of
Substitute Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to
the provisions of this Agreement) transferred to the Trustee as part of the
Trust Fund and from time to time subject to this Agreement, attached hereto as
Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the
Mortgaged Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling, (b) a dwelling in a PUD,
(c) a condominium unit, (d) a two- to four-unit residential property,
or (e) a Cooperative Unit;
(xi) the Mortgage Rate;
(xii) the Servicing Fee Rate and the Master Servicing Fee Rate;
(xiii) the purpose for the Mortgage Loan; and
(xiv) the type of documentation program pursuant to which the
Mortgage Loan was originated.
Such schedule shall also set forth the total of the amounts described under
(v) above for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note from time to time.
Mortgaged Property: The underlying property securing a
Mortgage Loan, which, with respect to a Cooperative Loan, is the related
Cooperative Shares and Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Prepayment Interest Shortfalls: As to any Distribution
Date, the amount by which the aggregate of Prepayment Interest Shortfalls during
the related Prepayment Period exceeds an amount equal to the 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) all monthly payments of
principal due on each Mortgage Loan on the related Distribution Date, (b) the
principal portion of the purchase price of each Mortgage Loan that was
repurchased by the Seller pursuant to this Agreement as of such Distribution
Date, (c) the Substitution Adjustment Amount in connection with any Deleted
Mortgage Loan received with respect to such Distribution Date, (d) any Insurance
Proceeds or Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans that are not yet Liquidated Mortgage Loans received during the
calendar month preceding the month of such Distribution Date, (e) with respect
to each Mortgage Loan that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the amount of Liquidation
Proceeds allocable to principal received with respect to such Mortgage Loan, and
(f) all partial and full Principal Prepayments received during the related
Prepayment Period.
Non-PO Percentage: As to any Discount Mortgage Loan, a
fraction (expressed as a percentage) the numerator of which is the Adjusted Net
Mortgage Rate of such Discount Mortgage Loan and the denominator of which is the
Required Coupon. As to any Non-Discount Mortgage Loan, 100%.
Nonrecoverable Advance: Any portion of an Advance or Servicer
Advance previously made or proposed to be made by the Master Servicer or the
related Servicer, as the case may be, that, in the good faith judgment of the
Master Servicer or such Servicer, will not be ultimately recoverable by the
Master Servicer from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided
pursuant to Section 9.02 to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender thereof.
Notional Amount: With respect to the Class X Certificates and
any Distribution Date, the aggregate of the Stated Principal Balances of the
Non-Discount Mortgage Loans as of the Due Date in the month preceding the month
of such Distribution 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, (ii) signed by the Chairman of the Board, the
President, a Vice President (however denominated), or the Treasurer of the
Master Servicer, or (iii) if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor and the
Trustee, as the case may be, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, including in-house counsel,
reasonably acceptable to the Trustee; provided, however, that with respect to
the interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Master Servicer, (ii) not have
any direct financial interest in the Depositor or the Master Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Optional Termination: The termination of the trust created
hereunder in connection with the purchase of the Mortgage Loans pursuant to
Section 9.01(a).
Original Applicable Credit Support Percentage: With respect to
each of the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
Class B-1 4.00%
Class B-2 1.80%
Class B-3 1.25%
Class B-4 0.90%
Class B-5 0.65%
Class B-6 0.35%
Original Mortgage Loan: The Mortgage Loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
Original Subordinated Principal Balance: The aggregate of the
Class Certificate Balances of the Subordinated Certificates as of the Closing
Date.
OTS: The Office of Thrift Supervision.
Outside Reference Date: As to any Interest Accrual Period for
the COFI Certificates, the close of business on the tenth day thereof.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any
ownership interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial.
Pass-Through Rate: For any interest-bearing Class of
Certificates, the per annum rate set forth or calculated in the manner described
in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal to
the percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency or
instrumentality thereof, provided that such obligations are backed by
the full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding
company, but only if Moody's is not a Rating Agency) are then rated
one of the two highest long-term and the highest short-term ratings
of each Rating Agency for such securities, or such lower ratings as
will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by
a signed writing delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings institution to the
extent that such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating
Agencies at the time of the issuance of such agreements, as evidenced
by a signed writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment,
have one of the two highest ratings of each Rating Agency (except if
the Rating Agency is Moody's such rating shall be the highest
commercial paper rating of Moody's for any such securities), or such
lower rating as will not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by the Rating Agencies,
as evidenced by a signed writing delivered by each Rating Agency;
(ix) units of taxable money-market funds (which may be 12b-1
funds, as contemplated under the rules promulgated by the Securities
and Exchange Commission under the Investment Company Act of 1940),
which funds have the highest rating available for money market funds
from the Rating Agencies or which have been designated in writing by
the Rating Agencies as Permitted Investments; and
(x) such other investments bearing interest or sold at a
discount acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument.
Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives
described in section 521 of the Code) which is exempt from tax imposed by
Chapter 1 of the Code (including the tax imposed by section 511 of the Code on
unrelated business taxable income) on any excess inclusions (as defined in
section 860E(c)(1) of the Code) with respect to any Residual Certificate, (iv)
rural electric and telephone cooperatives described in section 1381(a)(2)(C)
of the Code, (v) a Person that is not a citizen or resident of the United
States, a corporation, partnership, or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, or
an estate or trust whose income from sources without the United States is
includible in gross income for federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form 4224, and (vi) any other Person so
designated by the Depositor based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Residual Certificate to such Person may cause
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, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Planned Balance: Not applicable.
Planned Principal Classes: As specified in the Preliminary
Statement.
PO Formula Principal Amount: As to any Distribution Date,
the sum of the applicable PO Percentage of (a) the principal portion of each
Scheduled Payment (without giving effect, prior to the Bankruptcy Coverage
Termination Date, to any reductions thereof caused by any Debt Service
Reductions or Deficient Valuations) due on each Mortgage Loan on the related
Due Date, (b) the Stated Principal Balance of each Mortgage Loan that was
repurchased by the Seller or the Master Servicer pursuant to this Agreement as
of such Distribution Date, (c) the Substitution Adjustment Amount in
connection with any Deleted Mortgage Loan received with respect to such
Distribution Date, (d) any Insurance Proceeds or Liquidation Proceeds
allocable to recoveries of principal of Mortgage Loans that are not yet
Liquidated Mortgage Loans received during the calendar month preceding the
month of such Distribution Date, (e) with respect to each Mortgage Loan that
became a Liquidated Mortgage Loan during the calendar month preceding the
month of such Distribution Date, the amount of Liquidation Proceeds allocable
to principal received with respect to such Mortgage Loan during the calendar
month preceding the month of such Distribution Date with respect to such
Mortgage Loan and (f) all partial and full Principal Prepayments on Mortgage
Loans received during the related Prepayment Period; provided, however, that
if a Bankruptcy Loss that is an Excess Loss is sustained with respect to a
Discount Mortgage Loan that is not a Liquidated Mortgage Loan, the PO Formula
Principal Amount will be reduced on the related Distribution Date by the
applicable PO Percentage of the principal portion of such Bankruptcy Loss.
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.
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%.
Prepayment Interest Shortfall: As to any Distribution Date,
Mortgage Loan and Principal Prepayment, the amount, if any, by which one
month's interest at the related Mortgage Rate (net of the related Master
Servicing Fee) on such Principal Prepayment exceeds the amount of interest
paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the calendar
month preceding the month of such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Only Certificates: As specified in the Preliminary
Statement.
Principal Prepayment: Any payment of principal on a Mortgage
Loan (including the Purchase Price of any Modified Mortgage Loan purchased
pursuant to Section 3.14(c)) 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 or made pursuant to Section 3.14(c) of the entire principal
balance of a Mortgage Loan.
Private Certificates: As specified in the Preliminary
Statement.
Pro Rata Share: As to any Distribution Date, the
Subordinated Principal Distribution Amount and any Class of Subordinated
Certificates, the portion of the Subordinated Principal Distribution Amount
allocable to such Class, equal to the product of the Subordinated Principal
Distribution Amount on such Distribution Date and a fraction, the numerator of
which is the related Class Certificate Balance thereof and the denominator of
which is the aggregate of the Class Certificate Balances of the Subordinated
Certificates.
Proprietary Lease: With respect to any Cooperative Unit, a
lease or occupancy agreement between a Cooperative Corporation and a holder of
related Cooperative Shares.
Prospectus Supplement: The Prospectus Supplement dated January
26, 1999 relating to the Offered Certificates.
PUD: Planned Unit Development.
Purchase Price: With respect to any Modified Mortgage Loan
or any Mortgage Loan required to be purchased by the Seller pursuant to
Section 2.02 or 2.03 or purchased at the option of the Master Servicer
pursuant to Section 3.14(b), 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; provided, however, that if such Mortgage Loan is a
Modified Mortgage Loan, the interest component of the Purchase Price shall be
computed (i) on the basis of the applicable Adjusted Mortgage Rate before
giving effect to the related modification and (ii) from the date to which
interest was last paid to the date on which such Modified Mortgage Loan is
assigned to the Master Servicer pursuant to Section 3.14(c).
Qualified Insurer: A mortgage guaranty insurance company
duly qualified as such under the laws of the state of its principal place of
business and each state having jurisdiction over such insurer in connection
with the insurance policy issued by such insurer, duly authorized and licensed
in such states to transact a mortgage guaranty insurance business in such
states and to write the insurance provided by the insurance policy issued by
it, approved as a FNMA- or FHLMC-approved mortgage insurer or having a claims
paying ability rating of at least "AA" or equivalent rating by a nationally
recognized statistical rating organization. Any replacement insurer with
respect to a Mortgage Loan must have at least as high a claims paying ability
rating as the insurer it replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If either such organization or a successor is no longer
in existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating or rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage
Loan, an amount (not less than zero or more than the Stated Principal Balance
of the Mortgage Loan) as of the date of such liquidation, equal to (i) the
Stated Principal Balance of the Liquidated Mortgage Loan as of the date of
such liquidation, plus (ii) interest at the Adjusted Net Mortgage Rate from
the Due Date as to which interest was last paid or advanced (and not
reimbursed) to Certificateholders up to the Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan from time to time, minus (iii) the
Liquidation Proceeds, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the
Adjusted Net Mortgage Rate and to principal of the Liquidated Mortgage Loan.
With respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, if the principal amount due under the related Mortgage Note has
been reduced, the difference between the principal balance of the Mortgage
Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a Debt
Service Reduction and any Distribution Date, the amount, if any, by which the
principal portion of the related Scheduled Payment has been reduced.
Recognition Agreement: With respect to any Cooperative Loan,
an agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the
Cooperative Property.
Record Date: With respect to any Distribution Date, the
close of business on the last Business Day of the month preceding the month in
which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.08.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary
Statement.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
Relief Act Reductions: With respect to any Distribution Date
and any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended
calendar month is less than (ii) interest accrued thereon for such month
pursuant to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final
regulation, revenue ruling, revenue procedure or other official announcement
or interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust
Fund through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Request for Release: The Request for Release submitted by
the Master Servicer to the Trustee, substantially in the form of Exhibits M
and N, as appropriate.
Required Coupon: 6.25% per annum.
Required Insurance Policy: With respect to any Mortgage
Loan, any insurance policy that is required to be maintained from time to time
under this Agreement.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Restricted Classes: As defined in Section 4.02(e).
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies Inc. If S&P is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to S&P
shall be Standard & Poor's, 26 Broadway, 15th Floor, New York, New York 10004,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Depositor and the Master Servicer.
Scheduled Balances: Not applicable.
Scheduled Classes: As specified in the Preliminary Statement.
Scheduled Payment: The scheduled monthly payment on a
Mortgage Loan due on any Due Date allocable to principal and/or interest on
such Mortgage Loan which, unless otherwise specified herein, shall give effect
to any related Debt Service Reduction and any Deficient Valuation that affects
the amount of the monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to any Cooperative Loan,
the agreement between the owner of the related Cooperative Shares and the
originator of the related Mortgage Note, which defines the terms of the
security interest in such Cooperative Shares and the related Proprietary
Lease.
Seller: IndyMac, Inc., a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Seller/Servicer Guide: The PNC Mortgage Securities Corp.
Servicing Guide for its mortgage loan purchase and conduit servicing program and
all amendments and supplements to it.
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 Depletion Date: The Distribution Date on which the
Class Certificate Balance of the Senior Certificates has been reduced to zero.
Senior Percentage: As to any Distribution Date, the
percentage equivalent of a fraction the numerator of which is the aggregate of
the Class Certificate Balances of each Class of Senior Certificates (other
than the Class PO Certificates) as of such date and the denominator of which
is the aggregate of the Class Certificate Balances of all Classes of
Certificates (other than the Class PO Certificates) as of such date.
Senior Prepayment Percentage: As to any Distribution Date
during the five years beginning on the first Distribution Date, 100%. The
Senior Prepayment Percentage for any Distribution Date occurring on or after
the fifth anniversary of the first Distribution Date will, except as provided
herein, be as follows: for any Distribution Date in the first year thereafter,
the Senior Percentage plus 70% of the Subordinated Percentage for such
Distribution Date; for any Distribution Date in the second year thereafter,
the Senior Percentage plus 60% of the Subordinated Percentage for such
Distribution Date; for any Distribution Date in the third year thereafter, the
Senior Percentage plus 40% of the Subordinated Percentage for such
Distribution Date; for any Distribution Date in the fourth year thereafter,
the Senior Percentage plus 20% of the Subordinated Percentage for such
Distribution Date; and for any Distribution Date thereafter, the Senior
Percentage for such Distribution Date (unless on any of the foregoing
Distribution Dates the Senior Percentage exceeds the initial Senior
Percentage, in which case such Senior Prepayment Percentage for such
Distribution Date will once again equal 100%). Notwithstanding the foregoing,
no decrease in the Senior Prepayment Percentage will occur if, as of the first
Distribution Date as to which any such decrease applies more than an average
of 2% of the dollar amount of all monthly payments on the Mortgage Loans in
the Mortgage Pool, due in each of the preceding twelve months were delinquent
60 days or more (including for this purpose any such Mortgage Loans in
foreclosure and Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust Fund) or (ii) cumulative Realized
Losses with respect to the Mortgage Loans in the Mortgage Pool, exceed (a)
with respect to the Distribution Date on the fifth anniversary of the first
Distribution Date, 30% of the Original Subordinated Principal Balance, (b)
with respect to the Distribution Date on the sixth anniversary of the first
Distribution Date, 35% of the Original Subordinated Principal Balance, (c)
with respect to the Distribution Date on the seventh anniversary of the first
Distribution Date, 40% of the Original Subordinated Principal Balance, (d)
with respect to the Distribution Date on the eighth anniversary of the first
Distribution Date, 45% of the Original Subordinated Principal Balance and (e)
with respect to the Distribution Date on the ninth anniversary of the first
Distribution Date, 50% of the Original Subordinated Principal Balance.
Senior Principal Distribution Amount: As to any Distribution
Date, the sum of (i) the Senior Percentage of the applicable Non-PO Percentage
of all amounts described in clauses (a) through (d) of the definition of
"Non-PO Formula Principal Amount" for such Distribution Date, (ii) with
respect to each Mortgage Loan that became a Liquidated Mortgage Loan during
the calendar month preceding the month of such Distribution Date, the lesser
of (x) the Senior Percentage of the applicable Non-PO Percentage of the Stated
Principal Balance of such Mortgage Loan and (y) either (A) the Senior
Prepayment Percentage, or (B) if an Excess Loss was sustained with respect to
such Liquidated Mortgage Loan during such 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; provided,
however that if a Bankruptcy Loss that is an Excess Loss is sustained with
respect to a Mortgage Loan that is not a Liquidated Mortgage Loan, the Senior
Principal Distribution Amount will be reduced on the related Distribution Date
by the Senior Percentage of the applicable Non-PO Percentage of the principal
portion of such Bankruptcy Loss.
Servicer: Any person with which the Master Servicer has
entered into a Servicing Agreement for the servicing of all or a portion of
the Mortgage Loans pursuant to Section 3.02.
Servicer Advance: The meaning ascribed to such term in Section
3.08(d).
Servicing 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 (a) the preservation, restoration and protection of a Mortgaged Property,
(b) expenses reimbursable to the Master Servicer pursuant to Section 3.14 and
any enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 3.12.
Servicing Agreement: (a) The contract (including the PNC
Mortgage Securities Corp. Selling Guide and PNC Mortgage Securities Corp.
Servicing Guide to the extent incorporated by reference in it) between the
Master Servicer and a Person relating to the servicing of mortgage loans as
provided in Section 3.02 substantially in the form of Exhibit F, as it may be
amended or modified from time to time, and (b) any other similar contract
providing substantially similar rights as those provided by the form of
contract attached as Exhibit F. No amendment or modification of a Servicing
Agreement may materially adversely affect the interests of Certificateholders.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the applicable Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan.
Servicing Fee Rate: With respect to any Mortgage Loan, the per
annum rate set forth in the Mortgage Loan Schedule for such Mortgage Loan.
Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and facsimile signature appear on a list of
servicing officers furnished to the Trustee by the Master Servicer on the
Closing Date pursuant to this Agreement, as such list may from time to time be
amended.
Servicing Standard: That degree of skill and care exercised
by the Master Servicer with respect to mortgage loans comparable to the
Mortgage Loans serviced by the Master Servicer for itself or others.
Special Hazard Coverage Termination Date: The point in time at
which the Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a
Mortgaged Property on account of direct physical loss, but not including (i)
any loss of a type covered by a hazard insurance policy or a flood insurance
policy required to be maintained with respect to such Mortgaged Property
pursuant to Section 3.10 to the extent of the amount of such loss covered
thereby, or (ii) any loss caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of
the Trustee, the Master Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors in design, faulty workmanship or faulty
materials, unless the collapse of the property or a part thereof
ensues and then only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate
or remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an
actual, impending or expected attack:
1. by any government or sovereign power, de
jure or de facto, or by any authority maintaining or using
military, naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering,
combating or defending against such an occurrence, seizure or
destruction under quarantine or customs regulations, confiscation by
order of any government or public authority, or risks of contraband
or illegal transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the
first Distribution Date, $4,921,888. 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.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of such Due Date
as specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Liquidation Proceeds allocable to principal (other
than with respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Percentage: As to any Distribution, 100% minus
the Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution,
100% minus the Senior Prepayment Percentage for such Distribution Date.
Subordinated Principal Distribution Amount: With respect to
any Distribution Date, (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", with respect to
such Mortgage Loans for such Distribution Date, (ii) with respect to each such
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the Liquidation Proceeds
allocable to principal received with respect to such Mortgage Loan after
application of such amounts pursuant to clause (ii) of the definition of
Senior Principal Distribution Amount and (iii) the Subordinated Prepayment
Percentage of the applicable Non-PO Percentage of 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 to the Class PO Certificates on such Distribution
Date. Any such payment in respect of Class PO Deferred Amounts will be
deducted first from the amounts described in clauses (i) and (ii) above and
then from clause (iii) above.
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit M, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution,
not in excess of, and not more than 10% less than, the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) be accruing interest (net of the
related Servicing Fee) at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value
Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a remaining
term to maturity no greater than (and not more than one year less than that
of) the Deleted Mortgage Loan; (v) not be a Cooperative Loan unless the
Deleted Mortgage Loan was a Cooperative Loan and (vi) comply with each
representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03.
Targeted Balance: Not applicable.
Targeted Principal Classes: As specified in the Preliminary
Statement.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 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.
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto after the Cut-off Date, other than (x) in respect
of the Mortgage Loans (other than the Mortgage Loans listed on Schedule V
hereto), such amounts as were due on or before the Cut-off Date and (y) in
respect of the Mortgage Loans listed on Schedule V hereto, such amounts as
were due on or before February 1, 1999; (ii) any assets held by the Trustee
(or its duly appointed agent) in the Investment Account and the Distribution
Account and all amounts deposited in them pursuant to the applicable
provisions of this Agreement (except amounts representing the Master Servicing
Fee); (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; and (iv) all proceeds
of the conversion, voluntary or involuntary, of any of the foregoing.
Trustee: The Bank of New York and its successors and, if a
successor trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the
per annum rate agreed upon in writing on or prior to the Closing Date by the
Trustee and the Depositor.
Voting Rights: The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to each Class of
Notional Amount Certificates, if any (such Voting Rights to be allocated among
the holders of Certificates of each such Class in accordance with their
respective Percentage Interests), and (b) the remaining Voting Rights (or 100%
of the Voting Rights if there is no Class of Notional Amount Certificates)
shall be allocated among Holders of the remaining Classes of Certificates in
proportion to the Certificate Balances of their respective Certificates on
such date.
Withdrawal Date: Any day during the period beginning on the
18th day of the month of the related Distribution Date (or if that day is not
a Business Day, the immediately preceding Business Day) and ending on the last
Business Day before the 21st day of the month of the related Distribution
Date. The "related Due Date" for any Withdrawal Date is the Due Date in the
month of the applicable Distribution Date.
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Seller, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Depositor, without recourse, all the right, title and interest of the Seller in
and to the Mortgage Loans, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date and all interest and principal payments on the Mortgage Loans
received prior to the Cut-off Date in respect of installments of interest and
principal due thereafter, but not including (x) in respect of the Mortgage Loans
(other than the Mortgage Loans listed on Schedule V hereto), payments of
principal and interest due and payable on or before the Cut-off Date and (y) in
respect of the Mortgage Loans listed on Schedule V hereto, payments of principal
and interest due and payable on or before February 1, 1999. On or prior to the
Closing Date, the Seller shall deliver to the Depositor or, at the Depositor's
direction, to the Trustee or other designee of the Depositor, the Mortgage File
for each Mortgage Loan listed in the Mortgage Loan Schedule. Such delivery of
the Mortgage Files shall be made against payment by the Depositor of the
purchase price, previously agreed to by the Seller and Depositor, for the
Mortgage Loans. With respect to any Mortgage Loan that does not have a first
payment date on or before the Due Date in the month of the first Distribution
Date, the Seller shall deposit into the Distribution Account on the first
Distribution Account Deposit Date an amount equal to one month's interest at the
related Adjusted Net Mortgage Rate on the Cut-off Date Principal Balance of such
Mortgage Loan. If the Seller shall fail to deposit such amount by the first
Distribution Account Deposit Date, the Trustee shall deposit such amount.
(b) The Depositor, concurrently with the execution and
delivery hereof, hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the Trust
Fund, together with the Depositor's right to require the Seller to cure any
breach of a representation or warranty made herein by the Seller or to
repurchase or substitute for any affected Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth
in clause (b) above, the Depositor has delivered or caused to be delivered to
the Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) (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 (or, in the case of a
Mortgage for which the related Mortgaged Property is located in the Commonwealth
of Puerto Rico, a copy of such Mortgage certified by the applicable notary) as
being a true and complete copy of the Mortgage;
(iii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together with, except as
provided below, all interim recorded assignments of such mortgage (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which the assignment relates); provided that, if the
related Mortgage has not been returned from the applicable public recording
office, such assignment of the Mortgage may exclude the information to be
provided by the recording office; provided, further that such assignment of
Mortgage need not be delivered in the case of a Mortgage for which the related
Mortgage Property is located in the Commonwealth of Puerto Rico.
(iv) the original or copies of each Buydown Agreement,
assumption, modification, written assurance or substitution agreement, if any;
(v) except as provided below, the original or duplicate
original lender's title policy and all riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of the
following documents or instruments:
(A) The Cooperative Shares, together with a stock
power in blank;
(B) The executed Security Agreement;
(C) The executed Proprietary Lease;
(D) The executed Recognition Agreement;
(E) The executed assignment of Recognition Agreement;
(F) The executed UCC-1 financing statement with
evidence of recording thereon which have been filed in all places required to
perfect the Seller's interest in the Cooperative Shares and the Proprietary
Lease; and
(G) Executed UCC-3 financing statements or other
appropriate UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee with evidence of
recording thereon (or in a form suitable for recordation).
In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) the original recorded Mortgage, (b) all interim
recorded assignments or (c) the lender's title policy (together with all
riders thereto) satisfying the requirements of clause (ii), (iii) or (v)
above, respectively, concurrently with the execution and delivery hereof
because such document or documents have not been returned from the applicable
public recording office in the case of clause (ii) or (iii) above, or because
the title policy has not been delivered to either the Master Servicer or the
Depositor by the applicable title insurer in the case of clause (v) above, the
Depositor shall promptly deliver to the Trustee, in the case of clause (ii) or
(iii) above, such original Mortgage or such interim assignment, as the case
may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office, or a copy thereof, certified, if appropriate, by
the relevant recording office, but in no event shall any such delivery of the
original Mortgage Loan and each such interim assignment or a copy thereof,
certified, if appropriate, by the relevant recording office, be made later
than one year following the Closing Date, or, in the case of clause (v) above,
later than 120 days following the Closing Date; provided, however, that in the
event the Depositor is unable to deliver by such date each Mortgage and each
such interim assignment by reason of the fact that any such documents have not
been returned by the appropriate recording office, or, in the case of each
such interim assignment, because the related Mortgage has not been returned by
the appropriate recording office, the Depositor shall deliver such documents
to the Trustee as promptly as possible upon receipt thereof and, in any event,
within 720 days following the Closing Date. The Depositor shall forward or
cause to be forwarded to the Trustee (a) from time to time additional original
documents evidencing an assumption or modification of a Mortgage Loan and (b)
any other documents required to be delivered by the Depositor or the Master
Servicer to the Trustee. In the event that the original Mortgage is not
delivered and in connection with the payment in full of the related Mortgage
Loan the public recording office requires the presentation of a "lost
instruments affidavit and indemnity" or any equivalent document, because only
a copy of the Mortgage can be delivered with the instrument of satisfaction or
reconveyance, the Master Servicer shall execute and deliver or cause to be
executed and delivered such a document to the public recording office. In the
case where a public recording office retains the original recorded Mortgage or
in the case where a Mortgage is lost after recordation in a public recording
office, the Seller shall deliver to the Trustee a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the original recorded Mortgage.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Trustee
shall (i) affix the Trustee's name to each assignment of Mortgage, as the
assignee thereof, (ii) cause such assignment to be in proper form for
recording in the appropriate public office for real property records within
thirty (30) days after receipt thereof and (iii) cause to be delivered for
recording in the appropriate public office for real property records the
assignments of the Mortgages to the Trustee, except that, with respect to any
assignment of a Mortgage as to which the Trustee has not received the
information required to prepare such assignment in recordable form, the
Trustee's obligation to do so and to deliver the same for such recording shall
be as soon as practicable after receipt of such information and in any event
within thirty (30) days after the receipt thereof, and the Trustee need not
cause to be recorded any assignment which relates to a Mortgage Loan (a) the
Mortgaged Property and Mortgage File relating to which are located in
California or (b) in any other jurisdiction (including Puerto Rico) under the
laws of which, as evidenced by an Opinion of Counsel delivered by the Seller
(at the Seller's expense) to the Trustee, the recordation of such assignment
is not necessary to protect the Trustee's and the Certificateholders' interest
in the related Mortgage Loan.
In the case of Mortgage Loans that have been prepaid in full
as of the Closing Date, the Depositor, in lieu of delivering the above
documents to the Trustee, will deposit in the Investment Account the portion
of such payment that is required to be deposited in the Investment Account
pursuant to Section 3.08.
(d) The Seller intends to treat the transfer of the Mortgage
Loans to the Depositor as a sale for all tax, accounting and regulatory
purposes.
Section 2.02. Acceptance by the Trustee of the Mortgage Loans.
The Trustee acknowledges receipt of the documents identified
in the Initial Certification in the form annexed hereto as Exhibit G and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will
hold such other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders. The
Trustee acknowledges that it will maintain possession of the Mortgage Notes in
the State of California, unless otherwise permitted by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing
Date to the Depositor, the Master Servicer and the Seller an Initial
Certification in the form annexed hereto as Exhibit G. Based on its review and
examination, and only as to the documents identified in such Initial
Certification, the Trustee acknowledges that such documents appear regular on
their face and relate to such Mortgage Loan. The Trustee shall be under no
duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable or appropriate for the represented purpose or that they have
actually been recorded in the real estate records or that they are other than
what they purport to be on their face.
Not later than 90 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and the Seller a Final
Certification in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.
If, in the course of such review, the Trustee finds any
document constituting a part of a Mortgage File which does not meet the
requirements of Section 2.01, the Trustee shall list such as an exception in
the Final Certification; provided, however, that the Trustee shall not make
any determination as to whether (i) any endorsement is sufficient to transfer
all right, title and interest of the party so endorsing, as noteholder or
assignee thereof, in and to that Mortgage Note or (ii) any assignment is in
recordable form or is sufficient to effect the assignment of and transfer to
the assignee thereof under the mortgage to which the assignment relates. The
Seller shall promptly correct or cure such defect within 90 days from the date
it was so notified of such defect and, if the Seller does not correct or cure
such defect within such period, the Seller shall either (a) substitute for the
related Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 90 days from
the date the Seller was notified of such defect in writing at the Purchase
Price of such Mortgage Loan; provided, however, that in no event shall such
substitution or purchase occur more than 540 days from the Closing Date,
except that if the substitution or purchase of a Mortgage Loan pursuant to
this provision is required by reason of a delay in delivery of any documents
by the appropriate recording office, and there is a dispute between either the
Master Servicer or the Seller and the Trustee over the location or status of
the recorded document, then such substitution or purchase shall occur within
720 days from the Closing Date. The Trustee shall deliver written notice to
each Rating Agency within 270 days from the Closing Date indicating each
Mortgage Loan (a) which has not been returned by the appropriate recording
office or (b) as to which there is a dispute as to location or status of such
Mortgage Loan. Such notice shall be delivered every 90 days thereafter until
the related Mortgage Loan is returned to the Trustee. Any such substitution
pursuant to (a) above or purchase pursuant to (b) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05, if any, and any substitution pursuant to (a) above shall not be
effected prior to the additional delivery to the Trustee of a Request for
Release substantially in the form of Exhibit N. No substitution is permitted
to be made in any calendar month after the Determination Date for such month.
The Purchase Price for any such Mortgage Loan shall be delivered by the Seller
to the Master Servicer for deposit in the Investment 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 Seller shall promptly deliver to the Master Servicer, and
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 Seller or
the Master Servicer from time to time.
It is understood and agreed that the obligation of the
Seller to substitute for or to purchase any Mortgage Loan which does not meet
the requirements of Section 2.01 shall constitute the sole remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against the Seller.
Section 2.03. Representations, Warranties and Covenants of the
Seller and the Master Servicer.
(a) IndyMac, in its capacity as Seller, 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) The Master Servicer, in its capacity as Master Servicer,
hereby makes the representations and warranties set forth in Schedule IV 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.
(d) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to the
other parties. The Seller hereby covenants that within 90 days of the earlier of
its discovery or its receipt of written notice from any party of a breach of any
representation or warranty made pursuant to Section 2.03(b) which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
it shall cure such breach in all material respects, and if such breach is not so
cured, shall, (i) if such 90 day period expires prior to the second anniversary
of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from
the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the
manner and subject to the conditions set forth in this Section 2.03; or (ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth below; provided, however, that any such
substitution pursuant to (i) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05, if any, and a
Request for Release substantially in the form of Exhibit N, and the Mortgage
File for any such Substitute Mortgage Loan; and provided, further, that,
anything to the contrary herein notwithstanding, Seller shall have no obligation
to cure any such breach or to repurchase or substitute for such affected
Mortgage Loan if the substance of such breach constitutes fraud in the
origination of such affected Mortgage Loan and the Seller, at the time of such
origination and on the Closing Date, did not have actual knowledge of such
fraud. 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 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 Investment 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 shall provide to the Seller any information requested by the Seller
to permit it to, and the Seller shall, determine the amount (if any) by which
the aggregate principal balance of all such Substitute Mortgage Loans as of
the date of substitution is less than the aggregate Stated Principal Balance
of all such Deleted Mortgage Loans (after application of the scheduled
principal portion of the monthly payments due in the month of substitution).
The amount of such shortage (the "Substitution Adjustment Amount") plus an
amount equal to the aggregate of any unreimbursed Advances and Servicer
Advances with respect to such Deleted Mortgage Loans shall be deposited into
the Investment 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
Investment Account pursuant to Section 3.08 on or before the Distribution
Account Deposit Date for the Distribution Date in the month following the
month during which the Seller became obligated hereunder to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05 and receipt of a
Request for Release in the form of Exhibit N hereto, the Trustee shall release
the related Mortgage File held for the benefit of the Certificateholders to
such Person, and the Trustee shall execute and deliver at such Person's
direction such instruments of transfer or assignment prepared by such Person,
in each case without recourse, as shall be necessary to transfer title from
the Trustee. It is understood and agreed that the obligation under this
Agreement of any Person to cure, repurchase or replace any Mortgage Loan as to
which a breach has occurred and is continuing shall constitute the sole remedy
against such Persons respecting such breach available to Certificateholders,
the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the Depositor as
to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee
with respect to each Mortgage Loan as of the date hereof or such other date
set forth herein that as of the Closing Date, and following the transfer of
the Mortgage Loans to it by the Seller, the Depositor had good title to the
Mortgage Loans and the Mortgage Notes were subject to no offsets, defenses or
counterclaims.
The Depositor hereby assigns, transfers and conveys to the
Trustee all of its rights with respect to the Mortgage Loans including,
without limitation, the representations and warranties of the Seller made
pursuant to Section 2.03(b), together with all rights of the Depositor to
require the Seller to cure any breach thereof or to repurchase or substitute
for any affected Mortgage Loan in accordance with this Agreement.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
Mortgage Files to the Trustee.
Section 2.05. Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement,
no substitution pursuant to Section 2.02 or 2.03 shall be made more than 90 days
after the Closing Date unless the Seller delivers to the Trustee an Opinion of
Counsel, which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or contributions after the Startup Date, as
defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Master
Servicer, or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the Seller, at the Seller's
option, to either (i) substitute, if the conditions in Section 2.03(d) 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
the REMIC hereunder shall be the Trustee and the Trustee shall hold the Tax
Matters Person Certificate. The REMIC's fiscal year shall be the calendar
year.
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with
the terms of this Agreement and the Servicing Standard. In connection with
such servicing and administration, the Master Servicer shall have full power
and authority, acting alone and/or through Servicers as provided in Section
3.02, to do or cause to be done any and all things that it may deem necessary
or desirable in connection with such servicing and administration, including
but not limited to, the power and authority, subject to the terms hereof, (i)
to execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and 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. The Master
Servicer shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan which would cause the REMIC to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860F(a) or Section
860G(d) of the Code. Without limiting the generality of the foregoing, the
Master Servicer, in its own name or in the name of any Servicer or the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Master Servicer or the Servicer, as the case may be,
believes it appropriate in its reasonable judgment, to execute and deliver, on
behalf of the Trustee, the Depositor, the Certificateholders or any of them,
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to
the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Master Servicer shall prepare and
deliver to the Depositor and/or the Trustee such documents requiring execution
and delivery by either or both of them as are necessary or appropriate to
enable the Master Servicer to service and administer the Mortgage Loans to the
extent that the Master Servicer is not permitted to execute and deliver such
documents pursuant to the preceding sentence. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer.
In accordance with and to the extent of the Servicing
Standard, the Master Servicer shall advance or cause to be advanced funds as
necessary for the purpose of effecting the payment of taxes and assessments on
the Mortgaged Properties, which advances shall be reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section
3.09, and further as provided in Section 3.11. The costs incurred by the
Master Servicer, if any, in effecting the timely payments of taxes and
assessments on the Mortgaged Properties and related insurance premiums shall
not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balances of the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
permit.
Section 3.02. Subservicing; Enforcement of the Obligations
of Servicers.
(a) The Master Servicer may arrange for the subservicing of
any Mortgage Loan by a Servicer pursuant to a Servicing Agreement; provided,
however, that such subservicing arrangement and the terms of the related
subservicing agreement must provide for the servicing of such Mortgage Loans in
a manner consistent with the servicing arrangements contemplated hereunder. Each
Servicer of a Mortgage Loan shall be entitled to receive and retain, as provided
in the related Servicing Agreement and in Section 3.17, the related Servicing
Fee from payments of interest received on such Mortgage Loan after payment of
all amounts required to be remitted to the Master Servicer in respect of such
Mortgage Loan. Unless the context otherwise requires, references in this
Agreement to actions taken or to be taken by the Master Servicer in servicing
the Mortgage Loans include actions taken or to be taken by a Servicer on behalf
of the Master Servicer. Each Servicing Agreement will be based upon such terms
and conditions as are generally required or permitted by the Seller/Servicer
Guide and are not inconsistent with this Agreement and as the Master Servicer
and the Servicer have agreed. With the approval of the Master Servicer, a
Servicer may delegate its servicing obligations to third-party servicers, but
such Servicer will remain obligated under the related Servicing Agreement. The
Master Servicer and Servicer may enter into amendments to the related Servicing
Agreement or a different form of Servicing Agreement; provided, however, that
any such amendments or different forms shall be consistent with and not violate
the provisions of either this Agreement or the Seller/Servicer Guide in a manner
which would materially and adversely affect the interests of the
Certificateholders.
(b) For purposes of this Agreement, the Master Servicer shall
be deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a Servicer regardless of whether such
payments are remitted by the Servicer to the Master Servicer.
(c) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall use
commercially reasonable efforts to enforce the obligations of each Servicer
under the related Servicing Agreement, to the extent that the non-performance of
any such obligation would have material and adverse effect on a Mortgage Loan.
Such enforcement, including, without limitation, the legal prosecution of
claims, termination of Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys fees against the party against whom such enforcement is directed.
Section 3.03. Successor Servicers.
The Master Servicer shall be entitled to terminate any
Servicing Agreement that may exist in accordance with the terms and conditions
of such Servicing Agreement and without any limitation by virtue of this
Agreement; provided, however, that in the event of termination of any
Servicing Agreement by the Master Servicer or the Servicer, the Master
Servicer shall either act as servicer of the related Mortgage Loan or enter
into a Servicing Agreement with a successor Servicer which will be bound by
the terms of the related Servicing Agreement. If the Master Servicer or any
affiliate of the Master Servicer acts as servicer, it will not assume
liability for the representations and warranties of the Servicer which it
replaces. If the Master Servicer enters into a Servicing Agreement with a
successor Servicer, the Master Servicer shall use commercially reasonable
efforts to have the successor Servicer assume liability for the
representations and warranties made by the terminated Servicer in respect of
the related Mortgage Loans and, in the event of any such assumption by the
successor Servicer, the Master Servicer may, in the exercise of its business
judgment, release the terminated Servicer from liability for such
representations and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between
the Master Servicer or a Servicer or references to actions taken through a
Servicer or otherwise, the Master Servicer shall remain obligated and liable
to the Trustee and Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Servicing
Agreements or arrangements or by virtue of indemnification from the Servicer
and to the same extent and under the same terms and conditions as if the
Master Servicer alone were servicing and administering the Mortgage Loans. The
Master Servicer shall be entitled to enter into any agreement with a Servicer
or Seller for indemnification of the Master Servicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Servicers
and the Trustee.
Any Servicing Agreement that may be entered into and any
other transactions or services relating to the Mortgage Loans involving a
Servicer in its capacity as such and not as an originator shall be deemed to
be between the Servicer and the Master Servicer alone and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Servicer in its capacity as such except as set forth in Section 3.07.
Section 3.06. Rights of the Depositor and the Trustee in
Respect of the Master Servicer.
The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the
Master Servicer hereunder and in connection with any such defaulted obligation
to exercise the related rights of the Master Servicer hereunder; provided that
the Master Servicer shall not be relieved of any of its obligations hereunder
by virtue of such performance by the Depositor or its designee. Neither the
Trustee nor the Depositor shall have any responsibility or liability for any
action or failure to act by the Master Servicer nor shall the Trustee or the
Depositor be obligated to supervise the performance of the Master Servicer
hereunder or otherwise.
Section 3.07. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason
no longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its successor shall thereupon assume all of the
rights and obligations of the Master Servicer hereunder arising thereafter
(except that the Trustee shall not be (i) liable for losses of the Master
Servicer pursuant to Section 3.12 or any acts or omissions of the predecessor
Master Servicer hereunder), (ii) obligated to make Advances if it is
prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including but not
limited to repurchases or substitutions pursuant to Section 2.02 or 2.03, (iv)
responsible for expenses of the Master Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties of the Master
Servicer hereunder. Any such assumption shall be subject to Section 7.02. If
the Master Servicer shall for any reason no longer be the Master Servicer
(including by reason of any Event of Default), the Trustee or its successor
shall succeed to any rights and obligations of the Master Servicer under each
Servicing Agreement. The Trustee or the successor servicer for the Trustee
shall be deemed to have assumed all of the Master Servicer's interest therein
and to have replaced the Master Servicer as a party to any Servicing Agreement
entered into by the Master Servicer as contemplated by Section 3.02 to the
same extent as if the Servicing Agreement had been assigned to the assuming
party except that the Master Servicer shall not be relieved of any liability
or obligations under any such Servicing Agreement.
The Master Servicer shall, upon request of the Trustee, but
at the expense of the Master Servicer, deliver to the assuming party all
documents and records relating to each Servicing Agreement or substitute
servicing agreement and the Mortgage Loans then being serviced thereunder and
an accounting of amounts collected or held by it and otherwise use
commercially reasonable efforts to effect the orderly and efficient transfer
of the substitute Servicing Agreement to the assuming party.
Section 3.08. Collection of Mortgage Loan Payments; Custodial
Accounts; Investment Account; Distribution Account.
(a) In accordance with and to the extent of the Servicing
Standard, the Master Servicer shall make commercially 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 from the first day it first became Delinquent; provided,
however, that the Master Servicer cannot extend the maturity of any such
Mortgage Loan past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan in accordance with the provisions of Section 4.01 during the scheduled
period in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements. The Master Servicer
shall not be required to institute or join in litigation with respect to
collection of any payment (whether under a Mortgage, Mortgage Note or otherwise
or against any public or governmental authority with respect to a taking or
condemnation) if it reasonably believes that enforcing the provision of the
Mortgage or other instrument pursuant to which such payment is required is
prohibited by applicable law.
(b) In those cases where a Servicer is servicing Mortgage
Loans pursuant to a Servicing Agreement, the Master Servicer shall cause the
Servicer, pursuant to the Servicing Agreement, to establish and maintain one or
more Custodial Accounts for P&I and Custodial Accounts for Reserves, each of
which shall be an Eligible Account. The Servicer will be required under its
Servicing Agreement to deposit into the Custodial Account for P&I or the
Custodial Account for Reserves on a daily basis no later than the Business Day
following receipt, all proceeds of Mortgage Loans received by the Servicer, less
its Servicing Fees and unreimbursed Servicer Advances and expenses to the extent
permitted by the Servicing Agreement. Proceeds received for individual Mortgage
Loans from any title, hazard, or FHA insurance policy, VA guaranty, Primary
Insurance Policy or other insurance policy covering the Mortgage Loans shall be
deposited first in the Custodial Account for Reserves if required for the
restoration or repair of the related Mortgaged Property. Proceeds from those
insurance policies not deposited in the Custodial Account for Reserves shall be
deposited in the Custodial Account for P&I and shall be applied to the balances
of the related Mortgage Loans as payments of interest and principal. The
Servicer shall not be required to deposit in the Custodial Account for P&I or
the Custodial Account for Reserves payments or collections in the nature of
prepayment charges or late charges. The Master Servicer is hereby authorized to
make withdrawals from and to issue drafts against the Custodial Accounts for P&I
and the Custodial Accounts for Reserves for the purposes required or permitted
by this Agreement. Each Custodial Account for P&I and each Custodial Account for
Reserves shall bear a designation clearly showing the respective interests of
the applicable Servicer, as trustee, and of the Master Servicer, in
substantially one of the following forms:
(i) With respect to the Custodial Account for P&I: (i)
[Servicer's Name], as agent, trustee and/or bailee of principal and interest
custodial account for PNC Mortgage Securities Corp., its successors and assigns,
for various owners of interests in PNC Mortgage Securities Corp. mortgage-backed
pools or (ii) [Servicer's Name] in trust for PNC Mortgage Securities Corp.;
(ii) With respect to the Custodial Account for Reserves: (i)
[Servicer's Name], as agent, trustee and/or bailee of taxes and insurance
custodial account for PNC Mortgage Securities Corp., its successors and assigns
for various mortgagors and/or various owners of interests in PNC Mortgage
Securities Corp. mortgage-backed pools or (ii) [Servicer's Name] in trust for
PNC Mortgage Securities Corp. and various Mortgagors.
(c) The Master Servicer shall establish and maintain, or cause
the Servicers to establish and maintain, Buydown Fund Accounts into which the
Master Servicer and the Servicers, as applicable, shall deposit the Buydown
Funds.
(d) On or before the Withdrawal Date in each calendar month,
the Master Servicer shall cause the Servicer, pursuant to the Servicing
Agreement, to remit to the Master Servicer for deposit in the Investment Account
all funds held in the Custodial Account for P&I with respect to each Mortgage
Loan serviced by such Servicer that are required to be remitted to the Master
Servicer. The Servicer will also be required, pursuant to the Servicing
Agreement, to advance on or before each such Withdrawal Date amounts equal to
any Scheduled Payments (net of its Servicing Fees with respect thereto) not
received on any Mortgage Loans by the Servicer (such amount, a "Servicer
Advance"). The Servicer's obligation to advance with respect to each Mortgage
Loan will continue up to and including the first day of the month following the
date on which the related Mortgaged Property is sold at a foreclosure sale or is
acquired by the Trust Fund by deed in lieu of foreclosure or otherwise. All such
Servicer Advances received by the Master Servicer shall be deposited promptly by
it in the Investment Account.
Within five Business Days after the receipt by a Servicer of
a Principal Prepayment in Full or any Liquidation Proceeds or Insurance
Proceeds (not required to be applied to the restoration or repair of the
related Mortgaged Property), the Master Servicer shall cause such Servicer,
pursuant to the related Servicing Agreement, to remit such amounts to the
Master Servicer for deposit in the Investment Account.
(e) The Master Servicer shall establish and maintain an
Investment Account into which the Master Servicer shall deposit on a daily basis
within one Business Day of receipt, except as otherwise specifically provided
herein, the following payments and collections received by it in respect of
Mortgage Loans, and into which the Master Servicer shall transfer from the
Custodial Accounts for P&I, the Custodial Accounts for Reserves, and the Buydown
Fund Accounts, as appropriate, the following payments and collections deposited
into them by Servicers, subsequent to the Cut-off Date (other than in respect of
principal and interest due on the Mortgage Loans on or before the Cut-off Date)
and the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the Mortgage
Loans, including Principal Prepayments and the principal component of any
Servicer Advance;
(ii) all payments on account of interest on the Mortgage
Loans, net of the sum of the related Master Servicing Fee and related Servicing
Fee, and the interest component of any Servicer Advance;
(iii) all Insurance Proceeds and Liquidation Proceeds (net of
any related expenses of the related Servicer), other than proceeds to be applied
to the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Master Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Master
Servicer pursuant to Section 3.08(g) in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by the Master
Servicer pursuant to Sections 3.12 and 3.14;
(vi) all Purchase Prices from the Master Servicer or Seller
and all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to
Section 4.01; and
(viii) any other amounts required to be deposited hereunder.
In addition, with respect to any Mortgage Loan that is
subject to a Buydown Agreement, on each Due Date for such Mortgage Loan, in
addition to the monthly payment remitted by the Mortgagor, the Master Servicer
shall cause funds to be transferred from the related Buydown Fund Account into
the Investment Account in an amount required to cause an amount of interest to
be paid with respect to such Mortgage Loan equal to the amount of interest
that has accrued on such Mortgage Loan from the preceding Due Date at the
Mortgage Rate net of the Master Servicing Fee on such date.
The foregoing requirements for remittance by the Master
Servicer shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of prepayment
penalties, late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. In the event that the Master Servicer shall
remit any amount not required to be remitted, it may at any time withdraw or
direct the institution maintaining the Investment Account to withdraw such
amount from the Investment 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 Investment Account which describes the amounts deposited in
error in the Investment Account. The Master Servicer shall maintain adequate
records with respect to all withdrawals made pursuant to this Section 3.08.
All funds deposited in the Investment Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.11.
At its option, the Master Servicer may invest funds
withdrawn from the Custodial Accounts for P&I, as well as any Buydown Funds,
Insurance Proceeds and Liquidation Proceeds previously received by the Master
Servicer for its own account and at its own risk, during any period before
their deposit in the Distribution Account. Those funds shall immediately be
deposited by the Master Servicer with the Investment Depository in the
Investment Account for investment only as set forth in this Section 3.08. The
Master Servicer shall bear any losses incurred on any investments made with
the funds and shall be entitled to retain all gains realized on the
investments as additional servicing compensation. Not later than the Business
Day before the Distribution Date the Master Servicer shall deposit the funds,
net of any gains, in the Distribution Account.
(f) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Master Servicer to
the Trustee pursuant to Section 3.11(a);
(ii) any amount deposited by the Master Servicer pursuant to
Section 3.08(g) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount
not required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering an
Officer's Certificate to the Trustee which describes the amounts deposited in
error in the Distribution Account. All funds deposited in the Distribution
Account shall be held by the Trustee in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.11. In no event shall the Trustee incur liability for withdrawals
from the Distribution Account at the direction of the Master Servicer.
(g) Each institution at which the Investment 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 the Business Day next preceding the related Distribution Account
Deposit Date in the case of the Investment Account or the Business Day next
preceding the Distribution Date in the case of the Distribution Account (except
that if such Permitted Investment is an obligation of the institution that
maintains such account, then such Permitted Investment shall mature not later
than such Distribution Account Deposit Date or Distribution Date, as the case
may be) 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
Investment 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 Investment 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 Investment
Account or paid to the Trustee for deposit into the Distribution Account, as
applicable.
(h) The Master Servicer shall give notice to the Trustee, the
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Investment Account not later than 30 days and not more than 45
days prior to any change thereof. The Trustee shall give notice to the Master
Servicer, the Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account not later than 30 days and
not more than 45 days prior to any change thereof.
Section 3.09. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts.
(a) To the extent required by the related Mortgage Note and
not violative of current law, the Master Servicer shall cause each Servicer to
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Master Servicer or any Servicer to compel a Mortgagor to establish
an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow
Accounts may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer or the related Servicer out of related collections
for any payments made pursuant to Sections 3.12 (with respect to taxes and
assessments and insurance premiums) and 3.13 (with respect to hazard insurance),
to refund to any Mortgagors any sums determined to be overages, to pay interest,
if required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01. The Escrow Accounts shall not be a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to
in Section 3.09(a) that are not timely paid by the Mortgagors or advanced by the
Servicers on the date when the tax, premium or other cost for which such payment
is intended is due, but the Master Servicer shall be required so to advance only
to the extent that such advances, in the good faith judgment of the Master
Servicer, will be recoverable by the Master Servicer out of Insurance Proceeds,
Liquidation Proceeds or otherwise.
Section 3.10. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master Servicer shall afford, or shall cause the
Servicers to afford, the Depositor and the Trustee reasonable access to all
records and documentation regarding the Mortgage Loans and all accounts,
insurance information and other matters relating to this Agreement, such
access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the Master Servicer.
Upon reasonable advance notice in writing, the Master
Servicer will provide, or will cause the Servicers to provide, to each
Certificateholder which is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder to
comply with applicable regulations of the OTS or other regulatory authorities
with respect to investment in the Certificates; provided that the Master
Servicer and any Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Master Servicer or such
Servicer in providing such reports and access.
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 only upon reasonable and prior written request and during
normal business hours at the offices designated by the Master Servicer. Unless
prohibited by applicable laws or regulations, the Master Servicer and any
Servicer shall be entitled to be reimbursed by the related Certificateholders
for actual expenses incurred by the Master Servicer or such Servicer in
providing such access. Nothing in this Section 3.10 shall limit the obligation
of the Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer or
any Servicer to provide access as provided in this Section 3.10 as a result of
such obligation shall not constitute a breach of this Section 3.10.
Section 3.11. Permitted Withdrawals from the Investment
Account and the Distribution Account.
(a) The Master Servicer may from time to time make withdrawals
from the Investment Account for the following purposes:
(i) to pay to the Master Servicer or the related Servicer (to
the extent not previously retained), the servicing compensation to which it is
entitled pursuant to Section 3.17, and to pay to the Master Servicer, as
additional master servicing compensation, earnings on or investment income with
respect to funds in or credited to the Investment Account;
(ii) to reimburse the Master Servicer or the related Servicer
for unreimbursed Advances or Servicer Advances made by it, such right of
reimbursement pursuant to this subclause (ii) being limited to amounts received
on the Mortgage Loan(s) in respect of which any such Advance or Servicer Advance
was made;
(iii) to reimburse the Master Servicer or the related 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 or the related Servicer
for (A) unreimbursed Servicing Advances, the right to reimbursement pursuant to
this clause (v)(A) with respect to any Mortgage Loan being limited to amounts
received on such Mortgage Loan(s) which represent late recoveries of the
payments for which such advances were made pursuant to Section 3.01 or Section
3.09 and (B) for unpaid Master Servicing Fees as provided in Section 3.14;
(vi) to pay to the purchaser, with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03, 3.14(a), 3.14(b) or 3.14(c), all amounts received thereon
after the date of such purchase;
(vii) to pay itself reinvestment earnings deposited or earned
in the Investment Account to which it is entitled and to reimburse the Seller,
the Master Servicer or the Depositor for expenses incurred by any of them and
reimbursable pursuant to Section 6.03;
(viii) to withdraw any amount deposited in the Investment
Account and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the related Available Funds and the Trustee Fee for
such Distribution Date, to the extent on deposit, and remit such amount to the
Trustee for deposit in the Distribution Account; and
(x) to clear and terminate the Investment Account upon
termination of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Investment Account pursuant to such
subclauses (i), (ii), (iv), (v) and (vi). Prior to making any withdrawal from
the Investment Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master
Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
Loan(s) and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for distributions to Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn the amount of any taxes
that it is authorized to withhold pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds in the
Distribution Account;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited therein;
and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01.
(c) The Master Servicer (or the applicable Servicer, if it
maintains a Buydown Fund Account) is authorized to make withdrawals from the
Buydown Fund Account or Custodial Account for P&I established by any Servicer
under its supervision of the following amounts of Buydown Funds:
(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
(ii) Upon a Principal Prepayment in Full of any Mortgage Loan
having a related Buydown Fund, to apply amounts remaining in Buydown Fund
Accounts to reduce the required amount of the Principal Prepayment in Full (or,
if the Mortgagor has made a Principal Prepayment in Full, to refund the
remaining Buydown Fund amounts to the Person entitled to them);
(iii) Upon a foreclosure or liquidation of any Mortgage Loan
having a Buydown Fund, to deposit remaining Buydown Fund amounts in the
Investment Account as Liquidation Proceeds; and
(iv) To clear and terminate the portion of any account
representing Buydown Funds following termination of this Agreement pursuant to
Section 9.01.
Section 3.12. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Master Servicer shall cause to be maintained, for each
Mortgage Loan (other than a Cooperative Loan), hazard insurance with extended
coverage in an amount that is at least equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan or (ii) the
greater of (y) the outstanding principal balance of the Mortgage Loan and (z) an
amount such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying endorsement
that contains, a standard mortgagee clause. To the extent it may do so without
breaching the related Servicing Agreement, the Master Servicer shall replace any
Servicer that does not cause such insurance, to the extent it is available, to
be maintained. Any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Investment Account or the related Custodial Account for P&I, as
applicable. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders or remittances to the Trustee for their
benefit, be added to the principal balance of the Mortgage Loan, notwithstanding
that the terms of the Mortgage Loan so permit. Such costs shall be recoverable
by the Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds to the extent permitted by Section 3.11. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage other
than pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
is located at the time of origination of the Mortgage Loan in a federally
designated special flood hazard area and such area is participating in the
national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the least of (i) the original principal
balance of the related Mortgage Loan, (ii) the replacement value of the
improvements which are part of such Mortgaged Property, and (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program.
In the event that the Master Servicer shall obtain and
maintain a blanket policy insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.12, it being
understood and agreed that such policy may contain a deductible clause on
terms substantially equivalent to those commercially available and maintained
by comparable servicers. If such policy contains a deductible clause, the
Master Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with the first sentence
of this Section 3.12, and there shall have been a loss that would have been
covered by such policy, deposit in the Investment Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
In connection with its activities as Master Servicer of the Mortgage Loans,
the Master Servicer agrees to present, on behalf of itself, the Depositor, and
the Trustee for the benefit of the Certificateholders, claims under any such
blanket policy.
(b) The Master Servicer shall not take, or permit any Servicer
to take, any action which would result in non-coverage under any applicable
Primary Insurance Policy of any loss which, but for the actions of the Master
Servicer or any Servicer, would have been covered thereunder. The Master
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
that is in effect at the date of the initial issuance of the Certificates and is
required to be kept in force hereunder unless the replacement Primary Insurance
Policy for such canceled or non-renewed policy is maintained with a Qualified
Insurer. The Master Servicer shall not be required to maintain any Primary
Insurance Policy (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 the
extent permitted by applicable law, to effect the timely payment of the premiums
on each Primary Insurance Policy, and such costs not otherwise recoverable shall
be recoverable by the Master Servicer from the related liquidation proceeds.
In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present, or cause the related
Servicer to present, on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any Primary Insurance Policies
and, in this regard, to take such commercially reasonable action in accordance
with the Servicing Standard as shall be necessary to permit recovery under any
Primary Insurance Policies respecting defaulted Mortgage Loans. Any amounts
collected by a Servicer or the Master Servicer under any Primary Insurance
Policies shall be deposited in the Custodial Account for P&I, Custodial
Account for Reserves, or the Investment Account, as applicable.
Section 3.13. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
(a) Except as otherwise provided in this Section 3.13, when
any property subject to a Mortgage has been conveyed by the Mortgagor, the
Master Servicer or the related Servicer shall, to the extent that it has
knowledge of such conveyance and in accordance with the Servicing Standard,
enforce on behalf of the Trustee any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable law and
governmental regulations, but only to the extent that such enforcement will not
adversely affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, neither the Master Servicer nor the related
Servicer is required to exercise such rights with respect to a Mortgage Loan if
the Person to whom the related Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that (i)
the Master Servicer or the related Servicer is prohibited by law from enforcing
any such due-on-sale clause, (ii) coverage under any Required Insurance Policy
would be adversely affected, (iii) the Mortgage Note does not include a
due-on-sale clause or (iv) nonenforcement is otherwise permitted hereunder, the
Master Servicer is authorized, subject to Section 3.13(b), to take or enter into
an assumption and modification agreement from or with the person to whom such
property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, unless prohibited by applicable
state law, the Mortgagor remains liable thereon, provided that the Mortgage Loan
shall continue to be covered (if so covered before the Master Servicer enters
such agreement) by the applicable Required Insurance Policies. The Master
Servicer, subject to Section 3.13(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Master Servicer shall not be deemed to be in default under this
Section 3.13 by reason of any transfer or assumption which the Master Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.13(a), in any case in
which a Mortgaged Property has been conveyed to a Person by a Mortgagor, and
such Person is to enter into an assumption agreement or modification agreement
or supplement to the Mortgage Note or Mortgage that requires the signature of
the Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Master Servicer
shall prepare and deliver or cause to be prepared and delivered to the Trustee
for signature and shall direct, in writing, the Trustee to execute the
assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person. In connection with any such assumption, no material term of the
Mortgage Note may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. Together with each such
substitution, assumption or other agreement or instrument delivered to the
Trustee for execution by it, the Master Servicer shall deliver an Officer's
Certificate signed by a Servicing Officer stating that the requirements of this
subsection have been met in connection therewith. The Master Servicer shall
notify, or cause the related Servicer to notify, the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Master Servicer or any Servicer for entering into an assumption
or substitution of liability agreement will be retained by the Master Servicer
as additional master servicing compensation.
Section 3.14. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans.
(a) The Master Servicer shall use commercially reasonable
efforts in accordance with the Servicing Standard to foreclose upon or otherwise
comparably convert the ownership of Mortgaged Properties in respect of which the
related Mortgage Loans 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 the Servicing Standard and shall follow the requirements of the insurer
under any Required Insurance Policy; provided, however, that the Servicer may
enter into, and shall give the Rating Agencies notice of, a special servicing
agreement with an unaffiliated holder of 100% Percentage Interest of one or more
Classes of Subordinated Certificates or a holder of a class of securities
representing interests in one or more Classes of Subordinated Certificates and
provided, further, that entering into such special servicing agreement shall not
result in the downgrading or withdrawal of the respective ratings when assigned
to the Certificates. Any such agreement may contain provisions whereby such
holder may instruct the Servicer to commence or delay foreclosure proceedings
with respect to delinquent Mortgage Loans and will contain provisions for the
deposit of cash by the holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may have
been had the Servicer acted in accordance with its normal procedures.
Notwithstanding the foregoing, the Master Servicer shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it shall determine (i) that such restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan after reimbursement to itself of such expenses and (ii) that such expenses
will be recoverable to it through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Investment 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. The Master Servicer shall not foreclose upon or otherwise comparably
convert a Mortgaged Property if it 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 if the Master Servicer is aware of evidence of toxic waste, other
hazardous substances or other evidence of environmental contamination on the
Mortgaged Property and in either case the Master Servicer determines that it
would be imprudent to do so. In connection with such a foreclosure or other
conversion, the Master Servicer shall cause to be followed practices and
procedures it deems appropriate and that are usual in general mortgage servicing
activities.
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Master Servicer
shall ensure that the title to such REO Property references the Pooling and
Servicing Agreement and the Trustee's capacity hereunder. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall either itself or
through an agent selected by the Master Servicer protect and conserve such REO
Property in accordance with the Servicing Standard 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 Investment Account no later than the close
of business on each Determination Date. The Master Servicer shall perform the
tax reporting and withholding required by Sections 1445 and 6050J of the Code
with respect to foreclosures and abandonments, the tax reporting required by
Section 6050H of the Code with respect to the receipt of mortgage interest
from individuals and, if required by Section 6050P of the Code with respect to
the cancellation of indebtedness by certain financial entities, by preparing
such tax and information returns as may be required, in the form required, and
delivering the same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer shall dispose of such
Mortgaged Property prior to three 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 three-year period will not result in the imposition of
taxes on "prohibited transactions" on the REMIC as defined in section 860F of
the Code or cause the REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to
hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or (ii) subject the REMIC
to the imposition of any federal, state or local income taxes on the income
earned from such Mortgaged Property under Section 860G(c) of the Code or
otherwise, unless the Master Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to a determination by the Master
Servicer that the proceeds of such foreclosure would exceed the costs and
expenses of bringing such a proceeding. The income earned from the management
of any REO Properties, net of reimbursement to the Master Servicer for
expenses incurred (including any property or other taxes) in connection with
such management and net of unreimbursed Master Servicing Fees, Servicing Fees,
Advances, Servicer Advances and Servicing Advances, shall be applied to the
payment of principal of and interest on the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current and
adjustments, if applicable, to the Mortgage Rate were being made in accordance
with the terms of the Mortgage Note) and all such income shall be deemed, for
all purposes in this Agreement, to be payments on account of principal and
interest on the related Mortgage Notes and shall be deposited into the
Investment Account. To the extent the net income received during any calendar
month is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related Mortgage Loan for
such calendar month, such excess shall be considered to be a partial
prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as
well as any income from an REO Property, will be applied in the following
order of priority: first, to reimburse the Master Servicer or the related
Servicer for any related unreimbursed Servicing Advances, Master Servicing
Fees and Servicing Fees, as applicable; second, to reimburse the Master
Servicer or the related Servicer for any unreimbursed Advances or Servicer
Advances, as applicable, and to reimburse the Investment Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn
by the Master Servicer pursuant to Section 3.11(a)(iii) that related to such
Mortgage Loan; third, to accrued and unpaid interest (to the extent no Advance
or Servicer Advance has been made for such amount or any such Advance or
Servicer Advance has been reimbursed) on the Mortgage Loan or related REO
Property, at the Adjusted Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan. Excess Proceeds, if any, from the
liquidation of a Liquidated Mortgage Loan will be retained by the Master
Servicer as additional servicing compensation pursuant to Section 3.17.
(b) 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 Investment 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.
(c) The Master Servicer may agree to a modification of any
Mortgage Loan (the "Relevant Mortgage Loan") upon the request of the related
Mortgagor, provided that the modification is in lieu of a refinancing and the
Mortgage Rate on the Relevant Mortgage Loan, as modified, is approximately a
prevailing market rate for newly-originated mortgage loans having similar terms
and (ii) the Master Servicer purchases the Relevant Mortgage Loan from the Trust
Fund as described below. Effective immediately after such modification, and, in
any event, on the same Business Day on which the modification occurs, all right,
title and interest of the Trustee in and to the Modified Mortgage Loan shall
automatically be deemed transferred and assigned to the Master Servicer and all
benefits and burdens of ownership thereof, including without limitation the
right to accrued interest thereon from and including the date of modification
and the risk of default thereon, shall pass to the Master Servicer. The Master
Servicer shall promptly deliver to the Trustee a certification of a Servicing
Officer to the effect that all requirements of the first paragraph of this
subsection (c) have been satisfied with respect to such Modified Mortgage Loan.
The Master Servicer shall deposit the Purchase Price for any
Modified Mortgage Loan in the Investment Account pursuant to Section 3.08(e)
within one Business Day after the purchase of such Modified Mortgage Loan.
Upon receipt by the Trustee of written notification of any such deposit signed
by a Servicing Officer, the Trustee shall release to the Master Servicer the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary
to vest in the Master Servicer any Modified Mortgage Loan previously
transferred and assigned pursuant hereto.
The Master Servicer covenants and agrees to indemnify the
REMIC against any and all liability for any "prohibited transaction" taxes and
any related interest, additions and penalties imposed on the REMIC established
hereunder as a result of any modification of a Mortgage Loan effected pursuant
to this subsection (c), any holding of a Modified Mortgage Loan by the REMIC
or any purchase of a Modified Mortgage Loan by the Master Servicer (but such
obligation shall not prevent the Master Servicer or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Master Servicer from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings). The Master Servicer shall
have no right of reimbursement for any amount paid pursuant to the foregoing
indemnification, except to the extent that the amount of any tax, interest and
penalties, together with interest thereon, is refunded to the REMIC or the
Master Servicer.
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee by delivering, or causing to be delivered, a
"Request for Release" substantially in the form of Exhibit N. Upon receipt of
such request, the Trustee shall promptly release the related Mortgage File to
the Master Servicer, and the Trustee shall at the Master Servicer's direction
execute and deliver to the Master Servicer the request for reconveyance, deed
of reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Master
Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the related
Mortgagor. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose collection under
any policy of flood insurance, any fidelity bond or errors or omissions
policy, or for the purposes of effecting a partial release of any Mortgaged
Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the Trustee shall, upon delivery to the Trustee of a Request
for Release in the form of Exhibit M signed by a Servicing Officer, release
the Mortgage File to the Master Servicer or, at the Master Servicer's
direction, to the related Servicer. Subject to the further limitations set
forth below, the Master Servicer shall cause the Mortgage File or documents so
released to be returned to the Trustee when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the Investment Account, in which case the
Master Servicer shall deliver to the Trustee a Request for Release in the form
of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity.
Section 3.16. Documents, Records and Funds in Possession of
the Master Servicer to be Held for the Trustee.
The Master Servicer 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 Investment 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 Investment Account, Distribution
Account or any Escrow Account or Custodial Account for P&I or Custodial
Account for Reserves, 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 or any Servicer under this
Agreement.
Section 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer shall be entitled out of each payment of interest on a Mortgage Loan
(or portion thereof) included in the Trust Fund to retain or withdraw from the
Investment Account an amount equal to the Master Servicing Fee for such
Distribution Date.
Additional master servicing compensation in the form of
Excess Proceeds, prepayment penalties, assumption fees, late payment charges
and all income and gain net of any losses realized from Permitted Investments
shall be retained by the Master Servicer to the extent not required to be
deposited in the Investment Account pursuant to Section 3.08. The Master
Servicer shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder (including payment of any premiums for
hazard insurance and any Primary Insurance Policy and maintenance of the other
forms of insurance coverage required by this Agreement) and shall not be
entitled to reimbursement therefor except as specifically provided in this
Agreement.
As compensation for its activities under its Servicing
Agreement, each Servicer shall be entitled to retain out of each payment of
interest on a Mortgage Loan (or portion thereof) included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
Additional servicing compensation in the form of prepayment
penalties, assumption fees and late payment charges shall be retained by the
Servicers to the extent not required to be deposited in the Custodial Account
for P&I pursuant to the related Servicing Agreement. Each Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities under its Servicing Agreement (including payment of any premium for
hazard insurance and any Primary Insurance Policy and maintenance of the other
forms of insurance coverage required by this Agreement and its Servicing
Agreement) and shall not be entitled to reimbursement therefor except as
specifically provided in its Servicing Agreement and not inconsistent with
this Agreement.
In the event of any Prepayment Interest Shortfall, the
aggregate Master Servicing Fee for such Distribution Date shall be reduced
(but not below zero) by an amount equal to such Prepayment Interest Shortfall.
Section 3.18. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before 120 days after the end of the Master Servicer's fiscal
year, commencing with its 1999 fiscal year, an Officer's Certificate stating,
as to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the
Master Servicer under this Agreement has been made under such officer's
supervision, (ii) to the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Servicer has fulfilled all its obligations under its
Servicing Agreement throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof. The Trustee shall forward a
copy of each such statement to each Rating Agency.
Section 3.19. Annual Independent Public Accountants'
Servicing Statement; Financial Statements.
On or before 120 days after the end of the Master Servicer's
fiscal year, commencing with its 1999 fiscal year, the Master Servicer at its
expense shall cause a nationally or regionally recognized firm of independent
public accountants (who may also render other services to the Servicer, the
Seller or any of their affiliates) 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 Audit Guide for Audits of HUD Approved Nonsupervised Mortgagees, 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 Audit Guide for Audits of HUD Approved
Nonsupervised Mortgagees requires it to report. In rendering such statement,
such firm may rely, as to matters relating to direct servicing of mortgage
loans by Servicers, upon comparable statements for examinations conducted
substantially in compliance with the Audit Guide for Audits of HUD Approved
Nonsupervised Mortgagees (rendered within one year of such statement) of
independent public accountants with respect to the related Servicer. Copies of
such statement shall be provided by the Trustee to any Certificateholder upon
request at the Master Servicer's expense, provided that such statement is
delivered by the Master Servicer to the Trustee.
Section 3.20. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall obtain and maintain, and shall
cause each Servicer to obtain and maintain, (to the extent generally
commercially available from time to time) fidelity bond and errors and
omissions coverage acceptable to FNMA or FHLMC regarding their obligations
under this Agreement and the applicable Servicing Agreement, respectively.
<PAGE>
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.
The Master Servicer shall determine on or before each Master
Servicer Advance Date whether it is required to make an Advance pursuant to
the definition thereof. If the Master Servicer determines it is required to
make an Advance, it shall, on or before the Master Servicer Advance Date,
either (i) deposit into the Distribution Account an amount equal to the
Advance, (ii) make an appropriate entry in its records relating to the
Distribution 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, or (iii) make a Master Servicer Advance in the form of any
combination of (i) and (ii). Any Amount Held for Future Distribution so
applied shall be replaced by the Master Servicer by deposit in the Investment
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
Investment Account for all Advances of its own funds made pursuant to this
Section 4.01 as provided in Section 3.11. The obligation to make Advances with
respect to any Mortgage Loan shall continue if such Mortgage Loan has been
foreclosed or otherwise terminated and the related Mortgaged Property has not
been liquidated. The Master Servicer shall inform the Trustee of the amount of
the Advance to be made on each Master Servicer Advance Date no later than the
second Business Day before the related Distribution Date.
The Master Servicer shall deliver to the Trustee on the
related Master Servicer Advance Date an Officer's Certificate of a Servicing
Officer indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
Section 4.02. Priorities of Distribution.
(a) The Trustee shall withdraw such Available Funds from the
Distribution Account and apply such funds to distributions on the specified
Classes of Senior Certificates in the following order and priority and, in each
case, to the extent of such funds remaining:
(i) to each interest-bearing Class of Senior Certificates, an
amount allocable to interest equal to the related Class Optimal Interest
Distribution Amount, any shortfall being allocated pro rata among such Classes
in proportion to the amount of the Class Optimal Interest Distribution Amount
that would have been distributed in the absence of such shortfall;
(ii) 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;
(1)(y) on each Distribution Date prior
to the Senior Credit Support Depletion Date,
the related Non-PO Formula Principal Amount,
up to the amount of the applicable Senior
Principal Distribution Amount for such
Distribution Date, will be distributed as
principal, sequentially, of the Class A-R
and Class A-1 Certificates, in that order
until the respective Class Certificate
Balances thereof have been reduced to zero.
(iii) 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;
(iv) to each Class of Subordinated Certificates, subject to
paragraph (e) below, in the following order of priority:
(A) to the Class B-1 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date;
(B) to the Class B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until the Class
Certificate Balance thereof is reduced to zero;
(C) to the Class B-2 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until the Class
Certificate Balance thereof is reduced to zero;
(E) to the Class B-3 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until the Class
Certificate Balance thereof is reduced to zero;
(G) to the Class B-4 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date;
(H) to the Class B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until the Class
Certificate Balance thereof is reduced to zero;
(I) to the Class B-5 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date;
(J) to the Class B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until the Class
Certificate Balance thereof is reduced to zero;
(K) to the Class B-6 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date; and
(L) to the Class B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until the Class
Certificate Balance thereof is reduced to zero; and
(v) to the Class A-R Certificates, any remaining funds.
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 (iii)(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)(ii)(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' 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), if, with respect to any Class of Subordinated Certificates,
on any Distribution Date the sum of the related Class Subordination Percentages
of such Class and of all Classes of Subordinated Certificates which have a
higher numerical Class designation than such Class (the "Applicable Credit
Support Percentage") is less than the Original Applicable Credit Support
Percentage for such Class, no distribution of Principal Prepayments will be made
to any such Classes (the "Restricted Classes") and the amount of such Principal
Prepayments otherwise distributable to the Restricted Classes shall be
distributed to the Classes of Subordinated Certificates having lower numerical
Class designations than such Class, pro rata, based on their respective Class
Certificate Balances immediately prior to such Distribution Date and shall be
distributed in the sequential order set forth in Section 4.02(a)(iv).
Section 4.03. [Reserved]
Section 4.04. [Reserved]
Section 4.05. Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Trustee
shall determine the total amount of Realized Losses, including Excess Losses,
with respect to the related Distribution Date.
Realized Losses with respect to any Distribution Date shall
be allocated as follows:
(i) the applicable PO Percentage of any Realized Loss,
including any Excess Loss, shall be allocated to the Class PO Certificates until
the Class Certificate Balance thereof is reduced to zero; and
(ii) (A) the applicable Non-PO Percentage of any Realized
Loss (other than an Excess Loss) shall be allocated first, to the Subordinated
Certificates in reverse order of their respective numerical Class designations,
until the respective Class Certificate Balance of each such Class is reduced to
zero and second, to the Senior Certificates (other than the Class PO and Class X
Certificates), pro rata, on the basis of their respective Class Certificate
Balances, in each case immediately prior to the related Distribution Date, until
the respective Class Certificate Balance of each such Class is reduced to zero;
(B) the applicable Non-PO Percentage of any Excess Losses
on the Mortgage Loans shall be allocated to the Classes of Senior Certificates
(other than the Class PO and Class X Certificates) and the Subordinated
Certificates then outstanding, pro rata, on the basis of their respective Class
Certificate Balances in each case until the respective Class Certificate
Balances thereof have been reduced to zero.
(b) The Class Certificate Balance of the Class of
Subordinated Certificates then outstanding with the highest numerical Class
designation shall be reduced on each Distribution Date by the amount, if any, by
which the aggregate of the Class Certificate Balances of all outstanding Classes
of Certificates exceeds the Pool Stated Principal Balance for the following
Distribution Date.
(c) Any Realized Loss allocated to a Class of
Certificates or any reduction in the Class Certificate Balance of a Class of
Certificates pursuant to Section 4.05(b) shall be allocated among the
Certificates of such Class in proportion to their respective Certificate
Balances.
(d) Any allocation of Realized Losses to a Certificate or
to any Component or any reduction in the Certificate Balance of a Certificate
pursuant to Section 4.05(b) shall be accomplished by reducing the Certificate
Balance or Component Balance thereof, as applicable, immediately following the
distributions made on the related Distribution Date in accordance with the
definition of "Certificate Balance" or "Component Balance," as the case may be.
Section 4.06. Monthly Statements to 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, the Depositor and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal,
separately identifying the aggregate amount of any Principal
Prepayments and Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any
Class Unpaid Interest Shortfall included in such distribution
and any remaining Class Unpaid Interest Shortfall after giving
effect to such distribution;
(iii) if the distribution to the Holders of such Class
of Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall and the
allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of
principal on such Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the Senior Percentage and Subordinated Percentage
for the following Distribution Date;
(vii) the amount of the Master Servicing Fees and
Servicing Fees paid to or retained by the Master Servicer and
the Servicers (with respect to the Servicers, in the
aggregate) with respect to such Distribution Date;
(viii) the Pass-Through Rate for each such Class of
Certificates with respect to such Distribution Date;
(ix) the amount of Advances included in the
distribution on such Distribution Date and the aggregate
amount of Advances outstanding as of the close of business on
such Distribution Date;
(x) the number and aggregate principal amounts of
Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90
days and (4) 91 or more days and (B) in foreclosure and
delinquent (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90
days and (4) 91 or more days, as of the close of business on
the last day of the calendar month preceding such Distribution
Date;
(xi) for each of the preceding 12 calendar months, or
all calendar months since the Cut-off Date, whichever is less,
the aggregate dollar amount of the Scheduled Payments (A) due
on all Outstanding Mortgage Loans on each of the Due Dates in
each such month and (B) delinquent 60 days or more on each of
the Due Dates in each such month;
(xii) with respect to any Mortgage Loan that became an
REO Property during the preceding calendar month, the loan
number and Stated Principal Balance of such Mortgage Loan as
of the close of business on the Determination Date preceding
such Distribution Date and the date of acquisition thereof;
(xiii) the total number and principal balance of any
REO Properties (and market value, if available) as of the
close of business on the Determination Date preceding such
Distribution Date;
(xiv) the Senior Prepayment Percentage for the
following Distribution Date;
(xv) the aggregate amount of Realized Losses incurred
during the preceding calendar month and aggregate Realized
Losses through such Distribution Date; and
(xvi) the Special Hazard Loss Coverage Amount, the
Fraud Loss Coverage Amount and the Bankruptcy Loss Coverage
Amount, in each case as of the related Determination Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.06 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
Section 4.07. Determination of Pass-Through Rates for COFI
Certificates.
The Pass-Through Rate for each Class of COFI Certificates
for each Interest Accrual Period after the initial Interest Accrual Period
shall be determined by the Trustee as provided below on the basis of the Index
and the applicable formulae appearing in footnotes corresponding to the COFI
Certificates in (1) to the table relating to the Certificates in the
Preliminary Statement.
Except as provided below, with respect to each Interest
Accrual Period following the initial Interest Accrual Period, the Trustee
shall not later than two Business Days following the publication of the
applicable Index determine the Pass-Through Rate at which interest shall
accrue in respect of the COFI Certificates during the related Interest Accrual
Period.
Except as provided below, the Index to be used in
determining the respective Pass-Through Rates for the COFI Certificates for a
particular Interest Accrual Period shall be COFI for the second calendar month
preceding such Interest Accrual Period. If at the Outside Reference Date for
any Interest Accrual Period, COFI for the second calendar month preceding such
Interest Accrual Period has not been published, the Trustee shall use COFI for
the third calendar month preceding such Interest Accrual Period. If COFI for
neither the second nor third calendar months preceding any Interest Accrual
Period has been published on or before the related Outside Reference Date, the
Index for such Interest Accrual Period and for all subsequent Interest Accrual
Periods shall be the National Cost of Funds Index for the third calendar month
preceding such Interest Accrual Period (or the fourth preceding calendar month
if such National Cost of Funds Index for the third preceding calendar month
has not been published by such Outside Reference Date). In the event that the
National Cost of Funds Index for neither the third nor fourth calendar months
preceding an Interest Accrual Period has been published on or before the
related Outside Reference Date, then for such Interest Accrual Period and for
each succeeding Interest Accrual Period, the Index shall be LIBOR, determined
in the manner set forth below.
On each Interest Determination Date so long as the COFI
Certificates are outstanding and the applicable Index therefor is LIBOR, the
Trustee shall either (i) request each Reference Bank to inform the Trustee of
the quotation offered by its principal London office for making one-month
United States dollar deposits in leading banks in the London interbank market,
as of 11:00 A.M. (London time) on such Interest Determination Date or (ii) in
lieu of making any such request, rely on such Reference Bank quotations that
appear at such time on the Reuters Screen LIBO Page (as defined in the
International Swap Dealers Association Inc. Code of Standard Wording,
Assumptions and Provisions for Swaps, 1986 Edition), to the extent available.
With respect to any Interest Accrual Period for which the
applicable Index is LIBOR, LIBOR for such Interest Accrual Period will be
established by the Trustee on the related Interest Determination Date as
follows:
(a) If on any Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the next Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounding
such arithmetic mean upwards if necessary to the nearest whole multiple of
1/32%).
(b) If on any Interest Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest Determination Date or (ii) the Reserve
Interest Rate. The "Reserve Interest Rate" shall be the rate per annum which the
Trustee determines to be either (i) the arithmetic mean (rounded upwards if
necessary to the nearest whole multiple of 1/32%) of the one-month United States
dollar lending rates that New York City banks selected by the Trustee are
quoting, on the relevant Interest Determination Date, to the principal London
offices of at least two of the Reference Banks to which such quotations are, in
the opinion of the Trustee, being so made, or (ii) in the event that the Trustee
can determine no such arithmetic mean, the lowest one-month United States dollar
lending rate which New York City banks selected by the Trustee are quoting on
such Interest Determination Date to leading European banks.
From such time as the applicable Index becomes LIBOR until
all of the COFI Certificates are paid in full, the Trustee will at all times
retain at least four Reference Banks for the purposes of determining LIBOR
with respect to each Interest Determination Date. The Master Servicer
initially shall designate the Reference Banks. Each "Reference Bank" shall be
a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or be
under common control with, the Trustee and shall have an established place of
business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Master Servicer should terminate its appointment as
Reference Bank, the Trustee shall promptly appoint or cause to be appointed
another Reference Bank. The Trustee shall have no liability or responsibility
to any Person for (i) the selection of any Reference Bank for purposes of
determining LIBOR or (ii) any inability to retain at least four Reference
Banks which is caused by circumstances beyond its reasonable control.
In determining LIBOR and any Pass-Through Rate for the COFI
Certificates or any Reserve Interest Rate, the Trustee may conclusively rely
and shall be protected in relying upon the offered quotations (whether
written, oral or on the Reuters Screen) from the Reference Banks or the New
York City banks as to LIBOR or the Reserve Interest Rate, as appropriate, in
effect from time to time. The Trustee shall not have any liability or
responsibility to any Person for (i) the Trustee's selection of New York City
banks for purposes of determining any Reserve Interest Rate or (ii) its
inability, following a good-faith reasonable effort, to obtain such quotations
from the Reference Banks or the New York City banks or to determine such
arithmetic mean, all as provided for in this Section 4.07.
The establishment of LIBOR and each Pass-Through Rate for
the 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 to leading
banks in the London interbank market, as of 11:00 A.M. (London time) on such
Interest Determination Date or (ii) in lieu of making any such request, rely
on such Reference Bank quotations that appear at such time on the Reuters
Screen LIBO Page (as defined in the International Swap Dealers Association
Inc. Code of Standard Wording, Assumptions and provisions for Swaps, 1986
Edition), to the extent available.
LIBOR for the next Interest Accrual Period will be
established by the Trustee on each Interest Determination Date as follows:
(a) If on any Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the next Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounding
such arithmetic mean upwards if necessary to the nearest whole multiple of
1/32%).
(b) If on any Interest Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest Determination Date or (ii) the Reserve
Interest Rate. The "Reserve Interest Rate" shall be the rate per annum which the
Trustee determines to be either (i) the arithmetic mean (rounded upwards if
necessary to the nearest whole multiple of 1/32%) of the one-month United States
dollar lending rates that New York City banks selected by the Trustee are
quoting, on the relevant Interest Determination Date, to the principal London
offices of at least two of the Reference Banks to which such quotations are, in
the opinion of the Trustee, being so made, or (ii) in the event that the Trustee
can determine no such arithmetic mean, the lowest one-month United States dollar
lending rate which New York City banks selected by the Trustee are quoting on
such Interest Determination Date to leading European banks.
(c) If on any Interest Determination Date the trustee is
required but is unable to determine the Reserve Interest Rate in the manner
provided in paragraph (b) above, LIBOR shall be LIBOR as determined on the
preceding Interest Determination Date, or, in the case of the first Interest
Determination Date, the Initial LIBOR Rate.
Until all of the LIBOR Certificates are paid in full, the
Trustee will at all times retain at least four Reference Banks for the purpose
of determining LIBOR with respect to each Interest Determination Date. The
Master Servicer initially shall designate the Reference Banks. Each "Reference
Bank" shall be a leading bank engaged in transactions in Eurodollar deposits
in the international Eurocurrency market, shall not control, be controlled by,
or be under common control with, the Trustee and shall have an established
place of business in London. If any such Reference Bank should be unwilling or
unable to act as such or if the Master Servicer should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to
be appointed another Reference Bank. The Trustee shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable
control.
The Pass-Through Rate for each Class of LIBOR Certificates
for each Interest Accrual Period shall be determined by the Trustee on each
Interest Determination Date so long as the LIBOR Certificates are outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement.
In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates or any Reserve Interest Rate, the Trustee may conclusively rely
and shall be protected in relying upon the offered quotations (whether
written, oral or on the Reuters Screen) from the Reference Banks or the New
York City banks as to LIBOR or the Reserve Interest Rate, as appropriate, in
effect from time to time. The Trustee shall not have any liability or
responsibility to any Person for (i) the Trustee's selection of New York City
banks for purposes of determining any Reserve Interest Rate or (ii) its
inability, following a good-faith reasonable effort, to obtain such quotations
from the Reference Banks or the New York City banks or to determine such
arithmetic mean, all as provided for in this Section 4.08.
The establishment of LIBOR and each Pass-Through Rate for
the LIBOR Certificates by the Trustee shall (in the absence of manifest error)
be final, conclusive and binding upon each Holder of a Certificate and the
Trustee.
<PAGE>
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates shall be substantially in the forms
attached hereto as exhibits. The Certificates shall be issuable in registered
form, in the minimum denominations, integral multiples in excess thereof
(except that one Certificate in each Class may be issued in a different amount
which must be in excess of the applicable minimum denomination) and aggregate
denominations per Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on
the Certificates, on each Distribution Date the Trustee shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such holder at a bank or other entity having appropriate facilities therefor,
if (i) such Holder has so notified the Trustee at least five Business Days
prior to the related Record Date and (ii) such Holder shall hold (A) a
Notional Amount Certificate, (B) 100% of the Class Certificate Balance of any
Class of Certificates or (C) Certificates of any Class with aggregate
principal Denominations of not less than $1,000,000 or (y) by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the
time such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the countersignature and delivery of
any such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless countersigned by the Trustee by
manual signature, and such countersignature upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly executed and delivered hereunder. All Certificates shall be dated the
date of their countersignature. On the Closing Date, the Trustee shall
countersign the Certificates to be issued at the direction of the Depositor,
or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
Section 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of 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 form
set forth in Exhibit J (the "Transferor Certificate") and (i) deliver a letter
in substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Trustee at the expense of the transferor an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Master Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor, the Seller and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate or a Residual Certificate, such requirement is satisfied only by
the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit K or Exhibit L), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA or a plan subject to Section 4975 of the Code, nor a person
acting on behalf of any such plan or arrangement nor using the assets of any
such plan or arrangement to effect such transfer, or (ii) if the purchaser is
an insurance company, a representation that the purchaser is an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under PTCE 95-60 or
(iii) in the case of any such ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee, which Opinion of Counsel shall not be an expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in
the assets of the Trust Fund being deemed to be "plan assets" and subject to
the prohibited transaction provisions of ERISA and the Code and will not
subject the Trustee to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is
not a Private Certificate or a Residual Certificate, in the event the
representation letter referred to in the preceding sentence is not furnished,
such representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA-Restricted Certificate that is
in fact not permitted by this Section 5.02(b) or for making any payments due
on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Trustee in accordance with the foregoing
requirements.
(c) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change
or impending change in its status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate
may be registered on the Closing Date or thereafter
transferred, and the Trustee shall not register the Transfer
of any Residual Certificate unless, in addition to the
certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished
with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto
as Exhibit I.
(iii) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (A) to obtain a
Transfer Affidavit from any other Person to whom such Person
attempts to Transfer its Ownership Interest in a Residual
Certificate, (B) to obtain a Transfer Affidavit from any
Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual
Certificate and (C) not to Transfer its Ownership Interest in
a Residual Certificate or to cause the Transfer of an
Ownership Interest in a Residual Certificate to any other
Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Residual Certificate in violation of
the provisions of this Section 5.02(c) shall be absolutely
null and void and shall vest no rights in the purported
Transferee. If any purported transferee shall become a Holder
of a Residual Certificate in violation of the provisions of
this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such
Residual Certificate. The Trustee shall be under no liability
to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b)
and this Section 5.02(c) or for making any payments due on
such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after
receipt of the related Transfer Affidavit, Transferor
Certificate and either the Rule 144A Letter or the Investment
Letter. The Trustee shall be entitled but not obligated to
recover from any Holder of a Residual Certificate that was in
fact not a Permitted Transferee at the time it became a Holder
or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments
so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Permitted Transferee of such
Certificate.
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee,
all information necessary to compute any tax imposed under
Section 860E(e) of the Code as a result of a Transfer of an
Ownership Interest in a Residual Certificate to any Holder who
is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable
portions of the legend on a Residual Certificate may be deleted) with respect
to Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the
Trustee, the Seller or the Master Servicer, to the effect that the elimination
of such restrictions will not cause the REMIC hereunder to fail to qualify as
a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is
not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Residual Certificate which is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry
Certificates shall be made in accordance with the procedures established by
the Depository Participant or brokerage firm representing such Certificate
Owner. Each Depository Participant shall only transfer Book-Entry Certificates
of Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Trustee or
the Depositor is unable to locate a qualified successor, (y) the Depositor at
its option advises the Trustee in writing that it elects to terminate the
book-entry system through the Depository or (z) after the occurrence of an
Event of Default, Certificate Owners representing at least 51% of the
Certificate Balance of the Book-Entry Certificates together advise the Trustee
and the Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same.
Upon surrender to the Trustee of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Master Servicer, the Depositor nor the Trustee shall be liable for any delay
in delivery of such instruction and each may conclusively rely on, and shall
be protected in relying on, such instructions. The Master Servicer shall
provide the Trustee with an adequate inventory of certificates to facilitate
the issuance and transfer of Definitive Certificates. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Trustee shall not by virtue of its assumption of such obligations become
liable to any party for any act or failure to act of the Depository.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to
the Master Servicer and the Trustee such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, countersign and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with
the issuance of any new Certificate under this Section 5.03, the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith. Any
replacement Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the
contrary.
Section 5.05. Access to List of Certificateholders' Names
and Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and
(c) provide a copy of the communication which such Certificateholders propose
to transmit, or if the Depositor or Master Servicer shall request such
information in writing from the Trustee, then the Trustee shall, within ten
Business Days after the receipt of such request, provide the Depositor, the
Master Servicer or such Certificateholders at such recipients' expense the
most recent list of the Certificateholders of such Trust Fund held by the
Trustee, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
<PAGE>
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and
the Master Servicer.
The Depositor and the Master Servicer shall each be liable
in accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02. Merger or Consolidation of the Depositor or
the Master Servicer.
The Depositor and the Master Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the laws of
the United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Master Servicer
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party,
or any person succeeding to the business of the Depositor or the Master
Servicer, shall be the successor of the Depositor or the Master Servicer, as
the case may be, hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided, however, that the successor or
surviving Person to the Master Servicer shall be qualified to sell mortgage
loans to, and to service mortgage loans on behalf of, FNMA or FHLMC.
Section 6.03. Limitation on Liability of the Depositor, the
Seller, the Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or
any of the directors, officers, employees or agents of the Depositor, the
Seller or the Master Servicer shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Seller, the Master Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Seller, the Master Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Depositor, the
Seller, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Seller or the Master Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Seller, the
Master Servicer and any director, officer, employee or agent of the Depositor,
the Seller or the Master Servicer shall be indemnified by the Trust Fund and
held harmless against any loss, liability or expense incurred in connection
with any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. None of the
Depositor, the Seller or the Master Servicer shall be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
respective duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that any of the Depositor, the Seller
or the Master Servicer may in its discretion undertake any such action that it
may deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Seller and the Master
Servicer shall be entitled to be reimbursed therefor out of the Investment
Account.
Section 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations
and duties hereby imposed on it except (a) upon appointment of a successor
servicer and receipt by the Trustee of a letter from each Rating Agency that
such a resignation and appointment will not result in a downgrading of the
rating of any of the Certificates, or (b) upon determination that its duties
hereunder are no longer permissible under applicable law. Any such
determination under clause (b) permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Trustee. No such resignation shall become effective until the Trustee
or a successor master servicer shall have assumed the Master Servicer's
responsibilities, duties, liabilities and obligations hereunder.
Section 6.05. Indemnification of Depositor and Seller. The
Master Servicer agrees to indemnify the Depositor and the Seller and each Person
who controls the Depositor or the Seller within the meaning of the Securities
Act against any claims, losses, damages, penalties, fines, forfeitures, legal
fees and related costs, judgments, and any other costs fees and expenses that
the trust, the Seller or the Depositor may sustain in any way related to the
failure of the Master Servicer to perform its obligations under this Agreement
to service the Mortgage Loans by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder. The Master Servicer agrees to
indemnify the Depositor and the Seller and each Person who controls the
Depositor or the Seller within the meaning of the Securities Act against any
claims, losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs fees and expenses that the trust may
sustain in any way related to the breach of a representation or warranty under
Section 2.03(c).
<PAGE>
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in
the Distribution 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 (or such
longer period as is required so that three of the days are
Business 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 that materially affects the rights of
Certificateholders, which failure shall continue unremedied
for a period of 60 days after the date on which written notice
of such failure shall have been given to the Master Servicer
by the Trustee or the Depositor, or to the Master Servicer and
the Trustee by the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates;
or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for
the appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days;
or
(iv) the Master Servicer shall consent to the
appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or
all or substantially all of the property of the Master
Servicer; or
(v) the Master Servicer shall admit in writing its
inability to pay its debts generally as they become due, file
a petition to take advantage of, or commence a voluntary case
under, any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations.
If an Event of Default described in clauses (i) to (v) of
this Section 7.01 shall occur, then, and in each and every such case, so long
as such Event of Default shall not have been remedied, the Trustee may, or at
the direction of the Holders of Certificates evidencing not less than 66K% of
the Voting Rights evidenced by the Certificates, the Trustee shall by notice
in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other
than its rights as a Certificateholder hereunder. On and after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee. The Trustee shall make
any Advance which the Master Servicer failed to make subject to Section 4.01,
whether or not the obligations of the Master Servicer have been terminated
pursuant to this Section. The Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such
termination shall affect any obligation of the Master Servicer to pay amounts
owed pursuant to Article VIII. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be
credited to the Distribution Account, or thereafter be received with respect
to the Mortgage Loans.
Notwithstanding any termination of the activities of the
Master Servicer hereunder, the Master Servicer shall be entitled to receive,
out of any late collection of a Scheduled Payment on a Mortgage Loan which was
due prior to the notice terminating such Master Servicer's rights and
obligations as Master Servicer hereunder and received after such notice, that
portion thereof to which such Master Servicer would have been entitled
pursuant to Sections 3.11(a)(i) through (viii), and any other amounts payable
to such Master Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice
of termination pursuant to Section 7.01, the Trustee shall, subject to and to
the extent provided in Section 3.07, be the successor to the Master Servicer
in its capacity as master servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof and applicable law including the
obligation to make Advances pursuant to Section 4.01. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans that the Master Servicer would have been entitled to charge to the
Investment Account or Distribution Account if the Master Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Master Servicer in accordance with Section 7.01,
the Trustee may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making Advances pursuant to Section 4.01 or
if it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
the appointment of which does not adversely affect the then current rating of
the Certificates, by each Rating Agency, as the successor to the Master
Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder. Any
successor to the Master Servicer shall be an institution which is a FNMA and
FHLMC approved seller/servicer in good standing, which has a net worth of at
least $15,000,000, which is willing to service the Mortgage Loans and which
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, containing an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Master Servicer (other than liabilities of the Master Servicer under Section
6.03 incurred prior to termination of the Master Servicer under Section 7.01),
with like effect as if originally named as a party to this Agreement; provided
that each Rating Agency acknowledges that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be
qualified or reduced as a result of such assignment and delegation. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.07, act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Master Servicing Fee permitted the Master Servicer
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor master servicer shall be deemed to
be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
Any successor to the Master Servicer as master servicer
shall give notice to the Mortgagors of such change of servicer and shall,
during the term of its service as master servicer, maintain in force the
policy or policies that the Master Servicer is required to maintain pursuant
to Section 6.05.
Section 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee that are specifically required to be furnished
pursuant to any provision of this Agreement shall examine them to determine
whether they are in the form required by this Agreement; provided, however,
that the Trustee shall not be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document, order or
other instrument.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) unless an Event of Default known to the Trustee
shall have occurred and be continuing, the duties and
obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this
Agreement against the Trustee and the Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
finally proven that the Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of
Certificates evidencing not less than 25% of the Voting Rights
of Certificates relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties and
the Trustee shall have no responsibility to ascertain or
confirm the genuineness of any signature of any such party or
parties;
(ii) the Trustee may consult with counsel, financial
advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do
by Holders of Certificates evidencing not less than 25% of the
Voting Rights allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents, accountants or attorneys;
(vi) the Trustee shall not be required to risk or
expend its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the
exercise of any of its rights or powers hereunder if it shall
have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is
not assured to it;
(vii) the Trustee shall not be liable for any loss on
any investment of funds pursuant to this Agreement (other than
as issuer of the investment security);
(viii) the Trustee shall not be deemed to have
knowledge of an Event of Default until a Responsible Officer
of the Trustee shall have received written notice thereof; and
(ix) the Trustee shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by
this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which may be
incurred therein or thereby.
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Seller, as the case may be,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Agreement
or of the Certificates or of any Mortgage Loan or related document other than
with respect to the Trustee's execution and countersignature of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Investment Account by the Depositor or the Master Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the same rights as it would
have if it were not the Trustee.
Section 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder,
shall be entitled to withdraw from the Distribution Account on each
Distribution Date an amount equal to the Trustee Fee for such Distribution
Date. The Trustee and any director, officer, employee or agent of the Trustee
shall be indemnified by the Master Servicer and held harmless against any
loss, liability or expense (including reasonable attorney's fees) (i) incurred
in connection with any claim or legal action relating to (a) this Agreement,
(b) the Certificates, or (c) the performance of any of the Trustee's duties
hereunder, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder 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 the Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating which would not cause either of the Rating Agencies to reduce
their respective then current ratings of the Certificates (or having provided
such security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor and
its affiliates or the Master Servicer and its affiliates; provided, however,
that such entity cannot be an affiliate of the Seller, the Depositor or the
Master Servicer other than the Trustee in its role as successor to the Master
Servicer.
Section 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from
the trusts hereby created by giving written notice of resignation to the
Depositor, the Master Servicer and each Rating Agency not less than 60 days
before the date specified in such notice, when, subject to Section 8.08, such
resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.08 meeting the qualifications set forth in Section
8.06. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within 30 days after the giving of
such notice or resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request thereto by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged as bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a
tax is imposed with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund is located and the imposition of such tax would be
avoided by the appointment of a different trustee, then the Depositor or the
Master Servicer may remove the Trustee and appoint a successor trustee by
written instrument, in triplicate, one copy of which shall be delivered to the
Trustee, one copy to the Master Servicer and one copy to the successor
trustee.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
shall be delivered by the successor Trustee to the Master Servicer, one
complete set to the Trustee so removed and one complete set to the successor
so appointed. Notice of any removal of the Trustee shall be given to each
Rating Agency by the successor trustee.
Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section 8.07
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.08.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein. The Depositor, the Master Servicer and
the predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.09. Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation shall
be eligible under the provisions of Section 8.06 without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at
any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Fund or property securing any
Mortgage Note may at the time be located, the Master Servicer and the Trustee
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof,
whichever is applicable, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) To the extent necessary to effectuate the purposes
of this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee, except for
the obligation of the Trustee under this Agreement to advance
funds on behalf of the Master Servicer, shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the
holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally
liable by reason of any act or omission of any other trustee
hereunder and such appointment shall not, and shall not be
deemed to, constitute any such separate trustee or co-trustee
as agent of the Trustee;
(iii) The Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee;
and
(iv) The Master Servicer, and not the Trustee, shall be
liable for the payment of reasonable compensation,
reimbursement and indemnification to any such separate trustee
or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision
of this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the Master Servicer and the
Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 8.11. Tax Matters.
It is intended that the assets with respect to which any
REMIC election pertaining to the Trust Fund is to be made, as set forth in the
Preliminary Statement, shall constitute, and that the conduct of matters
relating to such assets shall be such as to qualify such assets as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act
as agent) on behalf of the 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 the REMIC, containing such information
and at the times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and
in such manner as may be required thereby; (b) within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code; (c) make
or cause to be made an election that such assets be treated as a REMIC on the
federal tax return for its first taxable year (and, if necessary, under
applicable state law); (d) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and,
if necessary, state tax authorities, all information returns and reports as
and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original
issue discount using the Prepayment Assumption; (e) provide information
necessary for the computation of tax imposed on the transfer of a Residual
Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is
the record holder of an interest (the reasonable cost of computing and
furnishing such information may be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters relating to
such assets at all times that any Certificates are outstanding so as to
maintain the status as a REMIC under the REMIC Provisions; (g) not knowingly
or intentionally take any action or omit to take any action that would cause
the termination of the REMIC's 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 the
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 the 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 the 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 REMIC, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any REMIC, and otherwise act on behalf of the 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 or the Seller, in the case of any such minimum tax, if such tax
arises out of or results from a breach by the Master Servicer or Seller of any
of their obligations under this Agreement or (iii) the Seller, if any such tax
arises out of or results from the Seller's obligation to repurchase a Mortgage
Loan pursuant to Section 2.02 or 2.03 or (iv) in all other cases, or in the
event that the Trustee, the Master Servicer or the Seller fails to honor its
obligations under the preceding clauses (i), (ii) or (iii), any such tax will
be paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 3.11(b).
Section 8.12. Periodic Filings.
Pursuant to written instructions from the Depositor, the
Trustee shall prepare, execute and file all periodic reports required under
the Securities Exchange Act of 1934 in conformity with the terms of the relief
granted to the Depositor in CWMBS, Inc. (February 3, 1994), a copy of which
has been supplied to the Trustee by the Issuer. In connection with the
preparation and filing of such periodic reports, the Depositor and the Master
Servicer shall timely provide to the Trustee all material information
available to them which is required to be included in such reports and not
known to them to be in the possession of the Trustee and such other
information as the Trustee reasonably may request from either of them and
otherwise reasonably shall cooperate with the Trustee. The Trustee shall have
no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Trustee's inability or
failure to obtain any information not resulting from its own negligence or
willful misconduct.
<PAGE>
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 (other than in respect of REO
Property) 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 Master Servicer may purchase all Mortgage Loans and REO Properties
pursuant to clause (a) above only if the Pool Stated Principal Balance, at the
time of any such repurchase, aggregates less than ten percent of the Cut-off
Date Pool Principal Balance. The purchase price for the Mortgage Loans shall
be deposited in the Investment 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 Master Servicer the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment
prepared by the Master Servicer, in either case without recourse, as shall be
necessary to vest the Mortgage Loans in the Master Servicer and the Master
Servicer shall succeed to all the Trustee's right, title and interest in and
to the Mortgage Loans and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The Master
Servicer shall thereupon own the Mortgage Loans, and all security and
documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
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 Investment Account, the Master
Servicer shall direct the Trustee promptly to send a final distribution notice
to each Certificateholder. If the Master Servicer elects to terminate the
Trust Fund pursuant to clause (a) of Section 9.01, at least 20 days prior to
the date notice is to be mailed to the affected Certificateholders the Master
Servicer shall notify the Depositor and the Trustee of the date the Master
Servicer intends to terminate the Trust Fund and of the applicable repurchase
price of the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given
promptly by the Trustee by letter to Certificateholders mailed not earlier
than the 15th day and not later than the 10th day of the month next preceding
the month of such final distribution. Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be
made upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and
(d) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
the Certificates at the office therein specified. The Master Servicer will
give such notice to each Rating Agency at the time such notice is given to
Certificateholders.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Certificateholders of each Class,
in each case on the final Distribution Date and in the order set forth in
Section 4.02, in the case of the Certificateholders, in proportion to their
respective Percentage Interests, with respect to Certificateholders of the
same Class, an amount equal to (i) as to each Class of Regular Certificates,
the Certificate Balance thereof plus accrued interest thereon (or on their
Notional Amount, if applicable) and (ii) as to the Residual Certificates, the
amount, if any, which remains on deposit in the Distribution Account (other
than the amounts retained to meet claims) after application pursuant to clause
(i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for
cancellation, the Class A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Trust Fund which remain subject
hereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase
option as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of the Master Servicer,
to the effect that the failure to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited transactions"
on the REMIC as defined in Section 860F of the Code, or (ii) cause the REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date
set forth in the notice given by the Master Servicer under
Section 9.02, the Master Servicer shall prepare and the
Trustee, at the expense of the "tax matters person", shall
adopt a plan of complete liquidation within the meaning of
Section 860F(a)(4) of the Code which, as evidenced by an
Opinion of Counsel (which opinion shall not be an expense of
the Trustee, the Tax Matters Person or the Trust Fund), meets
the requirements of a qualified liquidation; and
(2) Within 90 days after the time of adoption of such a
plan of complete liquidation, the Trustee shall sell all of
the assets of the Trust Fund to the Master Servicer for cash
in accordance with Section 9.01.
(b) The Trustee as agent for the 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.
<PAGE>
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.
This Agreement may be amended from time to time by the
Seller, the Depositor, the Master Servicer and the Trustee without the consent
of any of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to
correct any defective provision herein or to supplement any provision herein
which may be inconsistent with any other provision herein, (iii) to add to the
duties of the Depositor, the Seller or the Master Servicer, (iv) to add any
other provisions with respect to matters or questions arising hereunder or (v)
to modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement; provided that any action pursuant to clauses (iv)
or (v) above shall not, as evidenced by an Opinion of Counsel (which Opinion
of Counsel shall not be an expense of the Trustee or the Trust Fund),
adversely affect in any material respect the interests of any
Certificateholder; provided, however, that no such Opinion of Counsel shall be
required if the Person requesting the amendment obtains a letter from each
Rating Agency stating that the amendment would not result in the downgrading
or withdrawal of the respective ratings then assigned to the Certificates; it
being understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating.
The Trustee, the Seller, 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 the REMIC as a REMIC under the Code, (ii) avoid
or minimize the risk of the imposition of any tax on the 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
Seller, 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 the REMIC or the
Certificateholders or cause the REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall
furnish written notification of the substance or a copy of such amendment to
each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 10.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund), satisfactory to the
Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect in
any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required
to be reached pursuant to this Section 10.01.
Section 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the properties subject to the
Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Master Servicer at its
expense, but only upon direction by the Trustee accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE 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, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES.
Section 10.04. Intention of Parties.
It is the express intent of the parties hereto that the
conveyance (i) of the Mortgage Loans by the Seller to the Depositor and (ii)
of the Trust Fund by the Depositor to the Trustee each be, and be construed
as, an absolute sale thereof. It is, further, not the intention of the parties
that such conveyances be deemed a pledge thereof. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Seller or Depositor, as the case may be, or if for any other
reason this Agreement is held or deemed to create a security interest in
either such assets, then (i) this Agreement shall be deemed to be a security
agreement within the meaning of the Uniform Commercial Code of the State of
New York and (ii) the conveyances provided for in this Agreement shall be
deemed to be an assignment and a grant (i) by the Seller to the Depositor or
(ii) by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Seller and the Depositor for the benefit of the
Certificateholders shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the Trust Fund, such security interest would
be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement. The Depositor shall arrange for filing any Uniform Commercial Code
continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not
been cured;
3. The resignation or termination of the Master
Servicer or the Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans
pursuant to Section 2.03; and
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each
Rating Agency copies of the following:
1. Each report to Certificateholders described in
Section 4.06;
2. Each annual statement as to compliance
described in Section 3.16;
3. Each annual independent public accountants'
servicing report described in Section 3.17; and
4. Any notice of a purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor, CWMBS, Inc., 155 North Lake Avenue, Pasadena, California
91101, Attention: David A. Spector, (b) in the case of the Master Servicer, PNC
Mortgage Securities Corp., 75 North Fairway Drive, Vernon Hills, Illinois 60061,
Attention: General Counsel (with a copy directed to the attention of the Master
Servicing Department) 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 Seller, IndyMac, Inc., 155 North Lake Avenue, Pasadena, California 91101,
Attention: Secondary Marketing, (d) 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 1999-B, or such other address as the
Trustee may hereafter furnish to the Depositor or Master Servicer, and (e) in
the case of each of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions
or terms of this Agreement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Certificates or the rights of the
Holders thereof.
Section 10.07. Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided in Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and
Depositor.
Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting
or to take any action or commence any proceeding in any court for a petition
or winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice,
it will permit and will cause each Servicer to permit any representative of
the Seller, 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 Seller, 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 Seller,
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 Servicer.
Section 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and
shall be deemed fully paid.
* * * * * *
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller
and the Master Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
CWMBS, INC.,
as Depositor
By: /s/ Celia Coulter
____________________________
Name: Celia Coulter
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Mauro Palladino
____________________________
Name: Mauro Palladino
Title: Assistant Vice President
INDYMAC, INC.,
as Seller
By: /s/ John Kim
_____________________________
Name: John Kim
Title: Vice President
PNC MORTGAGE SECURITIES CORP.,
as Master Servicer
By: /s/Alexander T. Topping Jr.
_____________________________
Name: Alexander T. Topping Jr.
Title: Senior Vice-President
<PAGE>
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
<PAGE>
SCHEDULE II
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1999-B
Representations and Warranties of the Seller
IndyMac, Inc. ("IndyMac") 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 IndyMac, as seller, PNC Mortgage Securities Corp., as master servicer,
CWMBS, Inc., as depositor, and The Bank of New York, as trustee.
(1) IndyMac is duly organized as a Delaware
corporation and is validly existing and in good standing under the
laws of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by the Pooling and
Servicing Agreement to be conducted by IndyMac 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 perform any of its
obligations under the Pooling and Servicing Agreement in accordance
with the terms thereof.
(2) IndyMac has the full corporate power and
authority to sell 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 IndyMac
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
IndyMac, enforceable against IndyMac in accordance with its terms,
except that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and
Servicing Agreement by IndyMac, the sale of the Mortgage Loans by
IndyMac 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 IndyMac and
will not (A) result in a material breach of any term or provision of
the charter or by-laws of IndyMac 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 IndyMac is a party or by which it
may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to IndyMac of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over IndyMac; and IndyMac 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
IndyMac's ability to perform or meet any of its obligations under the
Pooling and Servicing Agreement.
(4) No litigation is pending or, to the best of
IndyMac's knowledge, threatened against IndyMac that would prohibit
the execution or delivery of, or performance under, the Pooling and
Servicing Agreement by IndyMac.
<PAGE>
SCHEDULE III
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1999-B
Representations and Warranties as to the Mortgage Loans
IndyMac, Inc. ("IndyMac") 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 or date of origination of the Mortgage Loan. 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 IndyMac, as seller,
PNC Mortgage Securities Corp., as 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 regularly scheduled
monthly payments due with respect to each Mortgage Loan up to and
including the Due Date immediately prior to the Cut-off Date have
been made; and as of the Cut-off Date, no Mortgage Loan had a
regularly scheduled monthly payment that was 60 or more days
Delinquent during the twelve months prior to the Cut-off Date.
(3) With respect to any Mortgage Loan that is not a
Cooperative Loan, each Mortgage is a valid and enforceable first lien
on the Mortgaged Property subject only to (a) the lien of
nondelinquent current real property taxes and assessments and liens
or interests arising under or as a result of any federal, state or
local law, regulation or ordinance relating to hazardous wastes or
hazardous substances and, if the related Mortgaged Property is a unit
in a condominium project or planned unit development, any lien for
common charges permitted by statute or homeowner association fees,
(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 generally
acceptable to mortgage lending institutions in the area wherein the
related Mortgaged Property is located 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.
(4) 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.
(5) As of the date of origination of each Mortgage
Loan, there was no delinquent tax or assessment lien against the
related Mortgaged Property.
(6) 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.
(7) 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 (11) below.
(8) To the best of the Seller's knowledge, no
Mortgaged Property has been materially damaged by water, fire,
earthquake, windstorm, flood, tornado or similar casualty (excluding
casualty from the presence of hazardous wastes or hazardous
substances, as to which the Seller makes no representation) so as to
affect adversely the value of the related Mortgaged Property as
security for such Mortgage Loan.
(9) 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 or
any noncompliance does not have a material adverse effect on the
value of the related Mortgage Loan.
(10) As of the Closing Date, the Seller has not
modified the Mortgage in any material respect (except that a Mortgage
Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and which has been delivered to
the Trustee); satisfied, cancelled or subordinated such Mortgage in
whole or in part; released the related Mortgaged Property in whole or
in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect
thereto.
(11) 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.
(12) 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.
(13) 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, unless such failure to be wholly within such boundaries and
restriction lines or such encroachment, as the case may be, does not
have a material effect on the value of such Mortgaged Property.
(14) To the best of the Seller's knowledge, as of
the date of origination of each Mortgage Loan, no improvement located
on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation unless such violation would not
have a material adverse effect on the value of the related Mortgaged
Property. 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.
(15) 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.
(16) The proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances
thereunder.
(17) 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.
(18) 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.
(19) 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 customarily required by institutional single family mortgage
lenders in the area where the Mortgaged Property is located, 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. Anything to the contrary in this
item (19) notwithstanding, no breach of this item (19) shall be
deemed to give rise to any obligation of the Seller to repurchase or
substitute for such affected Mortgage Loan or Loans so long as the
Master Servicer maintains a blanket policy pursuant to the second
paragraph of Section 3.12(a) of the Pooling and Servicing Agreement.
(20) If at the time of origination of each Mortgage
Loan, related the Mortgaged Property was in an area then 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 then-current requirements of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier.
(21) To the best of the Seller's knowledge, there
is no proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring.
(22) To 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 material
non-monetary default, breach, violation or event of acceleration
under the Mortgage or the related Mortgage Note; and the Seller has
not waived any material non-monetary default, breach, violation or
event of acceleration.
(23) Each Mortgage File contains an appraisal of
the related Mortgaged Property in a form acceptable to FNMA or FHLMC.
(24) Any leasehold estate securing a Mortgage Loan
has a stated term at least as long as the term of the related
Mortgage Loan.
(25) Each Mortgage Loan was selected from among the
outstanding fixed-rate one- to four-family mortgage loans in the
Seller's portfolio at the Closing Date as to which the
representations and warranties made with respect to the Mortgage
Loans set forth in this Schedule III can be made. No such selection
was made in a manner intended to adversely affect the interests of
the Certificateholders.
(26) No more than 1.20% of the Mortgage Loans (by
aggregate Stated Principal Balance of the Mortgage Loans) are
Cooperative Loans.
(27) Each Cooperative Loan is secured by a valid,
subsisting and enforceable perfected first lien and security interest
in the related Mortgaged Property, subject only to (i) the rights of
the Cooperative Corporation to collect Maintenance and assessments
from the Mortgagor, (ii) the lien of the Blanket Mortgage, if any, on
the Cooperative Property and of real property taxes, water and sewer
charges, rents and assessments on the Cooperative Property not yet
due and payable, and (iii) other matters to which like Cooperative
Units are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Security
Agreement or the use, enjoyment, value or marketability of the
Cooperative Unit. Each original UCC financing statement, continuation
statement or other governmental filing or recordation necessary to
create or preserve the perfection and priority of the first priority
lien and security interest in the Cooperative Shares and Proprietary
Lease has been timely and properly made. Any security agreement,
chattel mortgage or equivalent document related to the Cooperative
Loan and delivered to the Sponsor or its designee establishes in the
Seller a valid and subsisting perfected first lien on and security
interest in the property described therein, and the Seller has full
right to sell and assign the same.
(28) Each Cooperative Corporation qualifies as a
"cooperative housing corporation" as defined in Section 216 of the
Code.
<PAGE>
SCHEDULE IV
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1999-B
Representations and Warranties of the Master Servicer
PNC Mortgage Securities Corp. ("PNC") hereby makes the
representations and warranties set forth in this Schedule IV 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 IndyMac, as seller, PNC Mortgage Securities
Corp., as master servicer, CWMBS, Inc., as depositor, and The Bank of New
York, as trustee.
(1) PNC is duly incorporated as a Delaware
corporation and is validly existing and in good standing under the
laws of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by the Pooling and
Servicing Agreement to be conducted by PNC 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) PNC has the full corporate power and authority
to 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 PNC 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 PNC, enforceable
against PNC in accordance with its terms, except that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and
Servicing Agreement by PNC, the servicing of the Mortgage Loans by
PNC 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 PNC and will
not (A) result in a material breach of any term or provision of the
charter or by-laws of PNC 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 PNC is a party or by which it may be bound, or
(C) constitute a material violation of any statute, order or
regulation applicable to PNC of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
PNC; and PNC 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 PNC's ability to
perform or meet any of its obligations under the Pooling and
Servicing Agreement.
(4) No litigation is pending or, to the best of
PNC's knowledge, threatened against PNC that would prohibit the
execution or delivery of, or performance under, the Pooling and
Servicing Agreement by PNC.
