EXHIBIT 4.1
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ABN AMRO MORTGAGE CORPORATION
Depositor
and
ABN AMRO MORTGAGE GROUP, INC.
Servicer
and
JPMORGAN CHASE BANK
Trustee
-----------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2002
-----------------------------
$158,631,471
Mortgage Pass-Through Certificates
SERIES 2002-2
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Trust Fund...................................................................35
Section 2.2 Acceptance by Trustee......................................................................38
Section 2.3 Representations and Warranties of the Depositor............................................40
Section 2.4 Authentication and Delivery of Certificates; Designation
of Certificates as REMIC Regular and Residual Interests...............................44
Section 2.5 Designation of Startup Day.................................................................45
Section 2.6 No Contributions...........................................................................45
Section 2.7 Representations and Warranties of the Servicer.............................................45
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.1 Servicer to Act as Servicer; Administration of the Loans...................................46
Section 3.2 Collection of Certain Loan Payments; Custodial Account for P&I.............................49
Section 3.3 Permitted Withdrawals from the Custodial Account for P&I...................................51
Section 3.4 Taxes, Assessments and Similar Items; Escrow Accounts......................................52
Section 3.5 Maintenance of Insurance...................................................................53
Section 3.6 Enforcement of Due-on-Sale Clauses; Assumption and
Substitution Agreements...............................................................55
Section 3.7 Realization upon Defaulted Loans...........................................................55
Section 3.8 Trustee to Cooperate; Release of Mortgage Files............................................58
Section 3.9 Servicing Compensation.....................................................................58
Section 3.10 Reports to the Trustee; Custodial Account for P&I Statements...............................59
Section 3.11 Annual Statement as to Compliance..........................................................59
Section 3.12 Annual Independent Public Accountants' Servicing Report....................................59
Section 3.13 Access to Certain Documentation and Information Regarding the Loans........................60
Section 3.14 [Reserved].................................................................................60
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Section 3.15 Sale of Defaulted Loans and REO Properties.................................................60
Section 3.16 Delegation of Duties.......................................................................61
Section 3.17 [Reserved].................................................................................62
Section 3.18 [Reserved].................................................................................62
Section 3.19 Appointment of a Special Servicer..........................................................62
Section 3.20 Allocation of Realized Losses..............................................................62
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
Section 4.1 Distributions to Certificateholders........................................................63
Section 4.2 Statements to Certificateholders...........................................................64
Section 4.3 Advances by the Servicer; Distribution Reports to the Trustee..............................66
Section 4.4 Nonrecoverable Advances....................................................................67
Section 4.5 Foreclosure Reports........................................................................67
Section 4.6 Adjustment of Servicing Fees with Respect to Payoffs.......................................67
Section 4.7 Prohibited Transactions Taxes and Other Taxes..............................................68
Section 4.8 Tax Administration.........................................................................68
Section 4.9 Equal Status of Servicing Fee..............................................................69
Section 4.10 Appointment of Paying Agent and Certificate Administrator..................................69
ARTICLE V
THE CERTIFICATES
Section 5.1 The Certificates...........................................................................70
Section 5.2 Certificates Issuable in Classes; Distributions of Principal
and Interest; Authorized Denominations................................................76
Section 5.3 Registration of Transfer and Exchange of Certificates......................................76
Section 5.4 Mutilated, Destroyed, Lost or Stolen Certificates..........................................77
Section 5.5 Persons Deemed Owners......................................................................77
Section 5.6 Temporary Certificates.....................................................................77
Section 5.7 Book-Entry for Book-Entry Certificates.....................................................78
Section 5.8 Notices to Clearing Agency.................................................................79
Section 5.9 Definitive Certificates....................................................................79
Section 5.10 Office for Transfer of Certificates........................................................80
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.1 Liability of the Depositor and the Servicer................................................80
Section 6.2 Merger or Consolidation of the Depositor or the Servicer...................................80
Section 6.3 Limitation on Liability of the Servicer and Others.........................................80
Section 6.4 Servicer Not to Resign.....................................................................81
ARTICLE VII
DEFAULT
Section 7.1 Events of Default..........................................................................82
Section 7.2 Other Remedies of Trustee..................................................................83
Section 7.3 Directions by Certificateholders and Duties of Trustee
During Event of Default...............................................................83
Section 7.4 Action upon Certain Failures of Servicer and upon Event of Default.........................84
Section 7.5 Appointment of Successor Servicer..........................................................84
Section 7.6 Notification to Certificateholders.........................................................86
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties of Trustee..........................................................................86
Section 8.2 Certain Matters Affecting Trustee..........................................................88
Section 8.3 Trustee Not Required to Make Investigation.................................................88
Section 8.4 Trustee Not Liable for Certificates or Loans...............................................89
Section 8.5 Trustee May Own Certificates...............................................................89
Section 8.6 Servicer to Pay Trustee's Fees and Expenses................................................90
Section 8.7 Eligibility Requirements for Trustee.......................................................90
Section 8.8 Resignation and Removal of Trustee.........................................................90
Section 8.9 Successor Trustee..........................................................................91
Section 8.10 Merger or Consolidation of Trustee.........................................................92
Section 8.11 Appointment of Co-Trustee or Separate Trustee..............................................92
Section 8.12 Appointment of Custodians..................................................................93
Section 8.13 Authenticating Agent.......................................................................93
Section 8.14 Bloomberg..................................................................................94
Section 8.15 Reports to Securities and Exchange Commission..............................................94
Section 8.16 [Reserved]. ...............................................................................94
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ARTICLE IX
TERMINATION
Section 9.1 Termination upon Purchase by the Depositor or Liquidation of All Loans.....................95
Section 9.2 Trusts Irrevocable.........................................................................96
Section 9.3 Additional Termination Requirements........................................................96
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Amendment..................................................................................97
Section 10.2 Recordation of Agreement...................................................................98
Section 10.3 Limitation on Rights of Certificateholders.................................................98
Section 10.4 Governing Law; Jurisdiction................................................................99
Section 10.5 Notices....................................................................................99
Section 10.6 Severability of Provisions................................................................100
EXHIBITS
Exhibit A - Forms of Certificates
Exhibit B - Form of Residual Certificate
Exhibit C - [Reserved]
Exhibit D - Schedule of Loans
Exhibit E - Fields of Loan Information
Exhibit F - Form of Transferor Certificate for Privately Offered Certificates
Exhibit G - Form of Transferee's Certificate for Privately Offered Certificates
Exhibit H - [Reserved]
Exhibit I - Form of Transferor Certificate
Exhibit J - Form of Transferee Affidavit and Agreement
Exhibit K - Form of Additional Matter Incorporated into the Form of the Certificates
Exhibit L - Form of Rule 144A Investment Representation
Exhibit M - [Reserved]
Exhibit N - [Reserved]
Exhibit O - [Reserved]
Exhibit P - [Reserved]
Exhibit Q - Bloomberg Data
Exhibit R - Form of Special Servicing Agreement
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This Pooling and Servicing Agreement, dated and effective as of
February 1, 2002 (this "Agreement"), is executed by and among ABN AMRO
Mortgage Corporation, as depositor (the "Depositor"), ABN AMRO Mortgage Group,
Inc., as servicer (the "Servicer"), and JPMorgan Chase Bank, as trustee (the
"Trustee"). Capitalized terms used in this Agreement and not otherwise defined
have the meanings ascribed to such terms in Article I hereof.
PRELIMINARY STATEMENT
The Depositor at the Closing Date is the owner of the Loans and the
other property being conveyed by it to the Trustee for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from
the Trust Fund as consideration for its transfer to the Trust Fund of the
Loans and certain other assets and will be the owner of the Certificates. The
Depositor has duly authorized the execution and delivery of this Agreement to
provide for the conveyance to the Trustee of the Loans and the issuance to the
Depositor of the Certificates representing in the aggregate the entire
beneficial ownership of the Trust Fund. All covenants and agreements made by
the Depositor, the Servicer and the Trustee herein with respect to the Loans
and the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates. The Depositor and the Servicer
are entering into this Agreement, and the Trustee is accepting the trust
created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
The Certificates issued hereunder, other than the Class B-3, Class
B-4 and Class B-5 Certificates have been offered for sale pursuant to a
Prospectus, dated December 10, 2001, and a Prospectus Supplement, dated
February 25, 2002 of the Depositor (together, the "Prospectus"). The Class
B-3, Class B-4 and Class B-5 Certificates have been offered for sale pursuant
to a Private Placement Memorandum dated February 26, 2002. The Trust Fund
created hereunder is intended to be the "Trust" as described in the Prospectus
and the Private Placement Memorandum and the Certificates are intended to be
the "Certificates" described therein.
As provided herein, the Trustee will elect to treat the segregated
pool of assets consisting of the Loans and other related assets in the Trust
Fund subject to this Agreement as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC I." Component R-1
of the Class R Certificate will represent the sole class of "residual
interests" in REMIC I for purposes of the REMIC Provisions under federal
income tax law.
As provided herein, the Trustee will elect to treat the segregated
pool of assets consisting of the REMIC I Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". Component R-2 of the Class R Certificate will
represent the sole class of "residual interests" in REMIC II for purposes of
the REMIC Provisions under federal income tax law. The following table
irrevocably sets forth the designations, the Remittance Rate and initial Class
Principal Balance for each Class of Certificates which, together with the
Class R-2 Component, constitute the entire beneficial interests in REMIC II.
Determined solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
I Regular Interests and for each Class of Certificates shall be (i) with
respect to the Class A and Subordinate Certificates, the first Distribution
Date that is at least
two years after the end of the remaining amortization schedule of the Loan
that has, as of the Closing Date, the longest remaining amortization schedule,
irrespective of its scheduled maturity, and (ii) with respect to the Class R
Certificate, the first Distribution Date that is at least two years after the
end of the remaining amortization schedule of the Loan in the Mortgage Pool
that has, as of the Closing Date, the longest remaining amortization schedule,
irrespective of its scheduled maturity. The following table sets forth the
designation, Remittance Rate, initial Class Principal Balance, and Last
Scheduled Distribution Date for each Class of Certificates comprising the
beneficial interests in REMIC II and the Class R Certificate:
Initial Class
Principal Last Scheduled
Remittance or Notional Distribution
Designation Rate (1) Balance Date*
----------- ---------- -------- ----
Class A-1 5.50% $23,888,510 March 25, 2017
Class A-2 6.00% 90,559,000 March 25, 2017
Class A-3 6.50% 42,192,890 March 25, 2017
Class A-X 6.50%(2) 186,023 March 25, 2017
Class A-P 0.00(3) 7,278 March 25, 2017
Class M 6.00% 873,000 March 25, 2017
Class B-1 6.00% 396,000 March 25, 2017
Class B-2 6.00% 318,000 March 25, 2017
Class B-3 6.00% 158,000 March 25, 2017
Class B-4 6.00% 80,000 March 25, 2017
Class B-5 6.00% 158,693 March 25, 2017
Class R+ 6.00% 100(4) March 25, 2017
---------------------------
* The Distribution Date in the month after the maturity date for the
latest maturing Loan.
+ The Class R Certificate is entitled to receive the Residual
Distribution Amount and Excess Liquidation Proceeds.
(1) Interest distributed to the Certificates (other than the Principal
Only Certificates) on each Distribution Date will have accrued during
the preceding calendar month at the applicable per annum Remittance
Rate.
(2) The Class A-X Certificates will accrue interest on the Class A-X
Notional Amount (as defined herein).
(3) The Class A-P Certificates will not be entitled to distributions of
interest and the Class A-P Certificates will only receive a portion
of the principal in respect of the Loans with Pass- Through Rates
that are less than 5.50% per annum.
(4) The Class R Certificate will be comprised of two components,
component R-1, which represents the sole residual interest in REMIC I
(as defined herein), and component R-2, which represents the sole
residual interest in REMIC II (as defined herein).
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W I T N E S S E T H
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In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article:
Advance: An Advance made by the Servicer pursuant to Section 4.3.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may
obtain and rely on an Officer's Certificate of the Servicer or the Depositor
to determine whether any Person is an Affiliate of such party.
Aggregate Certificate Principal Balance: At any given time, the sum
of the then current Class Principal Balances of all Classes of Certificates.
Agreement: This Pooling and Servicing Agreement and all amendments
and supplements hereto.
ALTA: The American Land Title Association, or any successor.
Applicable Fraction: For each specified Class and each Loan in the
related Subgroup is as follows:
(1) for the Class A-1 Certificates and each Loan in Subgroup 1:
the Pass-Through Rate on such Loan in Subgroup 1
------------------------------------------------
5.50%
(2) for the Class A-1 Certificates and each Loan in Subgroup 2:
6.00% minus the Pass-Through Rate on such Loan in Subgroup 2
------------------------------------------------------------
0.50%
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(3) for the Class A-2 Certificates, the Class R Certificate and
the Subordinate Certificates and each Loan in Subgroup 2:
1 minus (6.00% minus the Pass-Through Rate on such Loan in Subgroup 2
------------------------------------------------------------
0.50%);
(4) for the Class A-2 Certificates, the Class R Certificate and
the Subordinate Certificates and each Loan in Subgroup 3,
the greater of zero and the following fraction:
6.50% minus the Pass-Through Rate on such Loan in Subgroup 3
------------------------------------------------------------
0.50%; and
(5) for the Class A-3 Certificates and each Loan in Subgroup 3,
the lesser of one and the following fraction:
1 minus (6.50% minus the Pass-Through Rate on such Loan in Subgroup 3
------------------------------------------------------------
0.50%).
Anniversary: Each anniversary of the Cut-off Date.
Appraised Value: The amount set forth in an appraisal made by or for
the mortgage originator in connection with its origination of each Loan.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Loan to the Trustee, which assignment,
notice of transfer or equivalent instrument may, if permitted by law, be in
the form of one or more blanket assignments covering Mortgages secured by
Mortgaged Properties located in the same county.
Authenticating Agent: Any authenticating agent appointed by the
Trustee pursuant to Section 8.13.
Authorized Denomination: With respect to the Class A-1, Class A-2 and
Class A-3 Certificates, an initial Certificate Principal Balance equal to
$100,000 each and integral multiples of $1 in excess thereof. With respect to
the Class A-X and Class A-P Certificates, in a single denomination of 100%
Percentage Interest. With respect to the Senior Subordinate Certificates, an
initial Certificate Principal Balance equal to $200,000 each and integral
multiples of $1 in excess thereof. With respect to the Class ▇-▇, ▇-▇ and B-5
Certificates, an initial Certificate Principal Balance equal to $250,000 each
and integral multiples of $1 in excess thereof, except with respect to the
Class B-5 Certificates which may be issued in a different amount that is not a
multiple of $1. With respect to the Class R Certificate, one Certificate with
a Percentage Interest equal to 100%.
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Available Distribution Amount: The sum of the following amounts:
(1) the total amount of all cash received by or on behalf of
the Servicer with respect to such related Loans by the Determination
Date for such Distribution Date and not previously distributed
(including Liquidation Proceeds and Insurance Proceeds), except:
(a) all Prepaid Monthly Payments;
(b) all Curtailments received after the applicable
Prepayment Period (together with any interest payment
received with such prepayments to the extent that it
represents the payment of interest accrued on a related Loan
subsequent to the applicable Prepayment Period);
(c) all Payoffs received after the applicable
Prepayment Period (together with any interest payment
received with such Payoffs to the extent that it represents
the payment of interest accrued on such Loan for the period
subsequent to the applicable Prepayment Period);
(d) Insurance Proceeds and Liquidation Proceeds
on such Loans received after the applicable Prepayment Period;
(e) all amounts in the Custodial Account for P & I
which are due and reimbursable to the Servicer pursuant to
the terms of this Agreement;
(f) the Servicing Fee for each such Loan; and
(g) Excess Liquidation Proceeds;
(2) to the extent advanced by the Servicer and not
previously distributed, the amount of any Advance made by the
Servicer to the Trustee with respect to such Distribution Date
relating to such related Loans;
(3) to the extent advanced by the Servicer and not
previously distributed, any amount payable as Compensating Interest
by the Servicer on such Distribution Date relating to such related
Loans; and
(4) the total amount, to the extent not previously
distributed, of all cash received by the Distribution Date by the
Trustee or the Servicer, in respect of a Purchase Obligation under
Section 2.2 and Section 2.3 or any permitted repurchase of a Loan.
Bankruptcy Coverage: As of the Cut-Off Date, $100,000, and
thereafter, the initial Bankruptcy Coverage amount, less (a) any scheduled or
permissible reduction in the amount of Bankruptcy Coverage pursuant to this
definition and (b) Bankruptcy Losses allocated to the Certificates. The
Bankruptcy Coverage may be reduced upon written confirmation from each
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Rating Agency that such reduction will not adversely affect the then current
ratings assigned to the Certificates by each Rating Agency.
Bankruptcy Loss: A loss on a Loan arising out of (i) a reduction in
the scheduled Monthly Payment for such Loan by a court of competent
jurisdiction in a case under the United States Bankruptcy Code, other than any
such reduction that arises out of clause (ii) of this definition of
"Bankruptcy Loss," including, without limitation, any such reduction that
results in a permanent forgiveness of principal, or (ii) with respect to any
Loan, a valuation, by a court of competent jurisdiction in a case under such
Bankruptcy Code, of the related Mortgaged Property in an amount less than the
then outstanding Principal Balance of such Loan.
Beneficial Holder: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a DTC Participant or an Indirect DTC
Participant or a Person holding a beneficial interest in any Definitive
Certificate.
Book-Entry Certificates: The Class A Certificates, the Class M
Certificates, the Class B-1 Certificates and the Class B-2 Certificates
beneficial ownership and transfers of which shall be made through book entries
as described in Section 5.7.
Business Day: Any day other than a Saturday, a Sunday, or a day on
which banking institutions in Chicago, Illinois or New York, New York, are
authorized or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates issued pursuant to this
Agreement, executed by the Trustee and authenticated by or on behalf of the
Trustee hereunder in substantially one of the forms set forth in Exhibits A
and B hereto. The additional matter appearing in Exhibit K shall be deemed
incorporated into Exhibits A and B as though set forth at the end of Exhibit A
and at the end of Exhibit B, as applicable.
Certificate Account: The separate trust account created and
maintained with the Trustee or any other bank or trust company acceptable to
each Rating Agency which is incorporated or organized under the laws of the
United States or any state thereof, which account shall bear a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustee on behalf of the Certificateholders or any other
account serving a similar function acceptable to each Rating Agency. Funds in
the Certificate Account in respect of the Loans and amounts withdrawn from the
Certificate Account attributable thereto shall be accounted for separately. If
the Trustee has appointed a Certificate Administrator pursuant to Section
4.10, funds on deposit in the Certificate Account may be invested in Eligible
Investments and reinvestment earnings thereon shall be paid to the Certificate
Administrator as additional compensation for the Certificate Administrator's
performance of the duties delegated to it by the Trustee. Funds deposited in
the Certificate Account (exclusive of the Servicing Fee) shall be held in
trust for the Certificateholders and for the uses and purposes set forth in
Section 3.2, Section 3.3 and Section 4.1.
Certificate Administrator: As defined in Section 4.10.
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Certificate Administrator and Trustee Fee: For each Loan, a fee per
annum equal to 0.0100%, of the outstanding Principal Balance thereof which
shall be paid by the Servicer to the Certificate Administrator and the
Trustee.
Certificate Distribution Amount: (I) For any Distribution Date prior
to the Credit Support Depletion Date, the Available Distribution Amount shall
be distributed to the Certificates in the following amounts and priority:
(A) with respect to the Class A Certificates and the Class R
Certificate, to the extent of the Available Distribution
Amount on such Distribution Date:
(i) first, as principal to the Class A-P Certificates,
the sum of the Discount Fractional Principal Amounts
for such Distribution Date;
(ii) second, to the Class A Certificates and Class R
Certificate, concurrently, the sum of the
applicable Interest Distribution Amounts for such
Classes of Certificates (other than the Principal
Only Certificates) remaining unpaid from previous
Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(iii) third, to the Class A Certificates and Class R
Certificate, concurrently, the sum of the
applicable Interest Distribution Amounts for such
Classes of Certificates (other than the Principal
Only Certificates) for the current Distribution
Date, pro rata according to their respective
Interest Distribution Amounts;
(iv) fourth, concurrently, to the Class A-1
Certificates, Class A-2 Certificates, Class A-3
Certificates and Class R Certificate, the Principal
Distribution Amount for such Classes and such
Distribution Date, in each case, until the Class
Principal Balance thereof has been reduced to zero;
provided, however, that the amount distributable to
the Class A-2 Certificates and Class R Certificate
may not exceed the Senior Principal Amount for such
Distribution Date; provided, further, that amounts
distributed pursuant to this subparagraph
(I)(a)(iv) to the Class R Certificate and Class A-2
Certificates shall be distributed sequentially, in
that order;
(v) fifth, concurrently, as follows:
(1) concurrently, to the Class A-1 Certificates
and Class A-3 Certificates, the Deferred
Principal Amounts for such Classes and such
Distribution Date; provided, however, that
any shortfall in amounts available to pay
Deferred Principal Amounts on any
Distribution Date will be allocated pro rata
on the basis of the unpaid Deferred Principal
Amounts on that Distribution Date;
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(2) sequentially, to the Class A-P Certificates, as
follows
(a) to the Class A-P Certificates, up to,
when added to the amounts distributed
pursuant to paragraph (I)(A)(v)(1)
above, the Subordinate Principal
Amount (determined without regard to
the proviso of such definition) for
such Distribution Date, the sum of the
Discount Fractional Principal
Shortfalls payable to the Class A-P
Certificates on previous Distribution
Dates pursuant to paragraph
(I)(A)(v)(2)(b) of this definition of
"Certificate Distribution Amount" and
remaining unpaid from such previous
Distribution Dates; and
(b) to the Class A-P Certificates, up to,
when added to the amounts distributed
pursuant to paragraph (I)(A)(v)(1) and
paragraph (I)(A)(v)(2)(a) above, the
Subordinate Principal Amount
(determined without regard to the
proviso of such definition) for such
Distribution Date (less any amounts
distributed to the Class A-P
Certificates pursuant to paragraph
(I)(A)(v)(2)(a)), the sum of the
Discount Fractional Principal
Shortfalls for such Distribution Date;
provided that any amounts distributed
in respect of the Discount Fractional
Principal Shortfall pursuant to
paragraph (I)(A)(v)(2)(a) or this
paragraph (I)(A)(v)(2)(b) of this
definition of "Certificate
Distribution Amount" shall not cause a
further reduction of the Class A-P
Class Principal Balance;
provided, however, that amounts payable pursuant to
this paragraph (I)(A)(v) will be paid pro rata to
the Class A-1, Class A-3 and Class A-P Certificates
on the basis of the related Deferred Principal
Amounts or the sum of the Discount Fractional
Principal Shortfalls, as applicable;
(B) with respect to the Class A Certificates, Class R
Certificate and Subordinate Certificates, on any
Distribution Date prior to the Credit Support Depletion
Date, to the extent of the Available Distribution Amount
remaining:
(i) first, to the Class M, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and B-5
Certificates, in their order of seniority, the
following:
(a) their respective amounts of previously
unpaid and then current Interest
Distribution Amounts;
(b) their pro rata share, according to
their respective Class Principal
Balances, of the Subordinate Principal
Amount allocable pursuant to the
definition of "Subordinate Principal
Amount" herein, until their Class
Principal Balances have been reduced
to zero;
8
(ii) second, to the Class A Certificates, Class R
Certificate and Subordinate Certificates in their
order of seniority, the amount of unreimbursed
Realized Losses previously allocated to such Class,
if any, provided, that any amounts distributed in
respect of losses pursuant to this paragraph
(I)(B)(ii) of this definition of "Certificate
Distribution Amount" shall not cause a further
reduction in the Class Principal Balances of the
Class A Certificates, Class R Certificate or
Subordinate Certificates ; and
(iii) third, to the Class R Certificate, the Residual
Distribution Amount;
(II) For any Distribution Date on or after the Credit Support
Depletion Date, the Available Distribution Amount shall be distributed to the
Senior Certificates in the following order of priority:
(A) with respect to the Class A Certificates and Class R
Certificate, to the extent of the Available Distribution
Amount on such Distribution Date:
(i) first, to the Class A-P Certificates the sum of the
Discount Fractional Principal Amounts for such
Distribution Date;
(ii) second, to the Class A Certificates (excluding the
Class A-P Certificates) and Class R Certificate,
previously unpaid and then current Interest
Distribution Amounts, pro rata, according to such
amount payable to the extent of amounts available;
(iii) third, concurrently, to the Class A-1 Certificates,
Class A-2 Certificates, Class A-3 Certificates and
Class R Certificate, the Principal Distribution
Amount for such Classes and such Distribution Date,
in each case, until the Class Principal Balance
thereof has been reduced to zero;
(iv) fourth, to the Class A Certificates (excluding the
Class A-X Certificates) and Class R Certificate,
pro rata, according to their respective Class
Principal Balances, the amount of unreimbursed
Realized Losses previously allocated to such Class;
and
(v) fifth, to the Class R Certificate, the Residual
Distribution Amount for such Distribution Date.
Certificate Principal Balance: For each Certificate of any Class, the
portion of the related Class Principal Balance, if any, represented by such
Certificate.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed, respectively, pursuant to Section 5.3.
Initially, the Certificate Registrar shall be LaSalle Bank National
Association.
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Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the
purposes of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor, the Certificate Administrator, the
Servicer or any Affiliate thereof shall be deemed not to be outstanding and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests necessary
to effect any such consent has been obtained; provided, that the Trustee, the
Certificate Registrar and the Paying Agent may conclusively rely upon an
Officer's Certificate to determine whether any Person is an Affiliate of the
Depositor, the Certificate Administrator or the Servicer.
Certificateholders' Report: As defined in Section 4.2(a).
Class: All Certificates having the same priority and rights to
payments from the Available Distribution Amount, designated as a separate
Class, as set forth in the forms of Certificates attached hereto as Exhibits A
and B.
Class A Certificates: The Class ▇-▇, ▇-▇, ▇-▇, A-X and A-P
Certificates, collectively, and designated as such on the face thereof in
substantially the forms attached hereto as Exhibits A-1 through A-5,
respectively.
Class A-X Notional Amount: As of the Closing Date, approximately
$186,023, and thereafter, with respect to any Distribution Date will equal the
total Principal Balance, as of the first day of the month preceding such
Distribution Date (after giving effect to all payments scheduled to be made on
such Distribution Date whether or not received), of the Premium Loans
multiplied by the following fraction:
the weighted average of the Pass-Through Rates of the
Premium Loans as of the first day of such month minus 6.50%
-----------------------------------------------------------
6.50%
Class Notional Amount: With respect to the Class A-X Certificates,
the Class A-X Notional Amount.
Class Principal Balance: For any Class of Certificates (other than
the Interest Only Certificates), the applicable initial Class Principal
Balance set forth in the Preliminary Statement hereto, corresponding to the
rights of such Class in payments of principal due to be passed through to
Certificateholders from principal payments on the Loans, as reduced from time
to time by (x) distributions of principal to Certificateholders of such Class
and (y) the portion of Realized Losses allocated to the Class Principal
Balance of such Class pursuant to Section 3.20 with respect to a given
Distribution Date. For any Distribution Date, the reduction of the Class
Principal Balance of any Class of Certificates pursuant to Section 3.20 shall
be deemed effective prior to the determination and distribution of principal
on such Class pursuant to the definition of "Certificate Distribution Amount".
Notwithstanding the foregoing, any amounts distributed in respect of losses
pursuant to paragraphs (I)(A)(v)(2)(a) or (I)(A)(v)(2)(b) of the definition of
"Certificate Principal Distribution Amount" shall not cause a further
reduction in the Class A-P
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Class Principal Balance. Notwithstanding the foregoing, the amount paid on any
Distribution Date in respect of Deferred Principal Amounts or Discount
Fractional Principal Shortfalls will be applied to reduce the Class Principal
Balances of the Subordinate Certificates in inverse order of seniority. The
Class Principal Balance for the Class A-1 Certificates shall be referred to as
the "Class A-1 Principal Balance", the Class Principal Balance for the Class
A-2 Certificates shall be referred to as the "Class A-2 Principal Balance" and
so on. The Class Principal Balance of the Interest Only Certificates shall be
zero.
Class R Certificate: The Certificate designated as "Class R" on the
face thereof in substantially the form attached hereto as Exhibit B, that is
composed of Components R-1 and R-2 each of which has been designated as the
sole class of "residual interests" in REMIC I and REMIC II, respectively,
pursuant to Section 2.4.
Class R Certificateholder: The registered Holder of the Class R
Certificate.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as
amended, which initially shall be DTC.
Closing Date: February 26, 2002.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest: For any Distribution Date, with respect to the
Loans, the lesser of (i) the sum of (a) one-twelfth of 0.125% of the aggregate
outstanding Principal Balance of each Loan on such Distribution Date and (b)
the aggregate Payoff Earnings and (ii) the aggregate Uncollected Interest.
Corporate Trust Office: The corporate trust office of the Trustee in
the State of Texas, 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 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇.
Credit Support Depletion Date: The first Distribution Date on which
the aggregate of the Class Principal Balances of the Subordinate Certificates
has been or will be reduced to zero as a result of principal distributions
thereon and the allocation of Realized Losses on such Distribution Date.
Curtailment: Any payment of principal on a Loan, made by or on behalf
of the related Mortgagor, other than a Monthly Payment, a Prepaid Monthly
Payment or a Payoff, which is applied to reduce the outstanding Principal
Balance of the Loan.
Curtailment Shortfall: With respect to any Curtailment applied with a
Monthly Payment, an amount equal to one month's interest on such Curtailment
at the applicable Pass-Through Rate on such Loan.
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Custodial Account for P&I: The custodial account for principal and
interest established and maintained by, or at the direction of, the Servicer
and caused by the Servicer to be established and maintained pursuant to
Section 3.2(b) (i) with the corporate trust department of the Trustee or
another financial institution approved by the Servicer such that the rights of
such Servicer, the Trustee and the Certificateholders thereto shall be fully
protected against the claims of any creditors of the Servicer and of any
creditors or depositors of the institution in which such account is
maintained, (ii) within FDIC insured accounts (or other accounts with
comparable insurance coverage acceptable to each Rating Agency) created and
maintained, by or at the direction of the Servicer, and monitored by the
Servicer or (iii) in a separate non-trust account without FDIC or other
insurance in an Eligible Institution. In the event that a Custodial Account
for P&I is established pursuant to clause (ii) of the preceding sentence,
amounts held in such Custodial Account for P&I shall not exceed the level of
deposit insurance coverage on such account; accordingly, more than one
Custodial Account for P&I may be established.
Custodial Agreement: The agreement, if any, among the Servicer, the
Trustee and a Custodian providing for the safekeeping of the Mortgage Files on
behalf of the Certificateholders.
Custodian: A custodian which is appointed pursuant to a Custodial
Agreement. Any Custodian so appointed shall act as agent on behalf of the
Trustee, and shall be compensated by the Trustee at no additional charge to
the Servicer. The Trustee shall remain at all times responsible under the
terms of this Agreement, notwithstanding the fact that certain duties have
been assigned to a Custodian.
Cut-Off Date: February 1, 2002.
Data: As defined in Section 8.14.
Defaulted Loan: As of any Determination Date, any Loan for which any
payment of principal of or interest on such Loan is more than 89 days past
due, determined without giving effect to any grace period permitted by the
related Mortgage or Mortgage Note or any other document in the Mortgage File.
Deferred Principal Amount: As of each Distribution Date for the Class
A-1 and Class A-3 Certificates, the sum of (x) the principal portion of the
Realized Losses (other than Excess Losses) allocated to such Class on such
Distribution Date and prior Distribution Dates, as reduced by all amounts paid
to such class in respect of a Deferred Principal Amount plus (y) accrued
interest on all such outstanding amounts at the applicable Remittance Rate;
provided, however, (1) the aggregate of Deferred Principal Amounts and
Discount Fractional Principal Shortfalls for any Distribution Date may not
exceed the Subordinate Principal Amount for such Distribution Date, (2) any
shortfall in amounts available to pay Deferred Principal Amounts on any
Distribution Date will be allocated pro rata among such Classes on the basis
of their Deferred Principal Amounts, (3) any amounts distributed to a Class of
Certificates in respect of a Deferred Principal Amount will not cause a
reduction in the Class Principal Balance thereof, and (4)
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following the Credit Support Depletion Date, no Deferred Principal Amounts
will be calculated or distributable.
Definitive Certificates: As defined in Section 5.7.
Denomination: The amount specified on a Certificate as representing
the aggregate Principal Balance of the Loans as of the Cut-Off Date evidenced
by such Certificate.
Depositor: ABN AMRO Mortgage Corporation, a Delaware corporation, or
its successor-in-interest.
Depository: DTC or any successor thereto.
Depository Agreement: The Letter of Representations, dated February
26, 2002 by and among DTC, the Depositor and the Trustee.
Determination Date: A day not later than the 10th day (or, if such
10th day is not a Business Day, the Business Day immediately succeeding such
10th day) preceding a related Distribution Date in the month in which such
Distribution Date occurs.
Discount Fraction: For any Discount Loan, the following fraction:
5.50% - the Pass-Through Rate on such Discount Loan
---------------------------------------------------
5.50%
Discount Fractional Principal Amount: On each Distribution Date, an
amount equal to the product of the Discount Fraction multiplied by the sum of
(i) scheduled payments of principal on each Discount Loan due on or before the
related Due Date in respect of which no distribution has been made on any
previous Distribution Date and which were received by the Determination Date,
or which have been advanced as part of an Advance with respect to such
Distribution Date, (ii) the principal portion received in respect of each
Discount Loan during the Prepayment Period of (a) Curtailments, (b) Insurance
Proceeds, (c) the amount, if any, of the principal portion of the Purchase
Price pursuant to a Purchase Obligation or any repurchase of a Discount Loan
permitted hereunder and (d) Liquidation Proceeds and (iii) the principal
portion of Payoffs received in respect of each Discount Loan during the
applicable Prepayment Period.
Discount Fractional Principal Shortfall: For any Distribution Date,
an amount equal to the Discount Fraction of any Realized Loss on a Discount
Loan, other than a Special Hazard Loss, Fraud Loss or Bankruptcy Loss in
excess of the Special Hazard Coverage, Fraud Coverage or Bankruptcy Coverage.
Discount Loan: The Loans having Pass-Through Rates of less than 5.50%.
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Disqualified Organization: A "disqualified organization" as defined
in Section 860E(e)(5) of the Code, and, for purposes of Section 5.1 herein, as
defined in Section 5.1(b).
Distribution Date: With respect to distributions on the Certificates,
the 25th day (or, if such 25th day is not a Business Day, the Business Day
immediately succeeding such 25th day) of each month, with the first such date
being March 25, 2002. The "related Due Date" for any Distribution Date is the
Due Date immediately preceding such Distribution Date.
DTC: The Depository Trust Company.
DTC Participant: A broker, dealer, bank, other financial institution
or other Person for whom DTC effects book-entry transfers and pledges of
securities deposited with DTC.
Due Date: The first day of each calendar month, which is the day on
which the Monthly Payment for each Loan is due.
Eligible Account: Any account or accounts held and established by the
Servicer or the Trustee in trust for the Certificateholders at any Eligible
Institution.
Eligible Institution: An institution having (i) the highest
short-term debt rating, and one of the two highest long-term debt ratings of
each Rating Agency, (ii) with respect to any Custodial Account for P&I, an
unsecured long-term debt rating of at least one of the two highest unsecured
long-term debt ratings of each Rating Agency, or (iii) the approval of each
Rating Agency.
Eligible Investments: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date, regardless of whether
issued by the Depositor, the Servicer, the Trustee or any of their respective
Affiliates and having at the time of purchase, or at such other time as may be
specified, the required ratings, if any, provided for in this definition:
(a) direct obligations of, or guaranteed as to full and
timely payment of principal and interest by, 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 of
America;
(b) direct obligations of, or guaranteed as to timely
payment of principal and interest by, FHLMC, FNMA or the Federal Farm
Credit System, provided, that any such obligation, at the time of
purchase or contractual commitment providing for the purchase
thereof, is qualified by each Rating Agency as an investment of funds
backing securities rated "AAA" in the case of ▇▇▇▇▇'▇ and Fitch (the
initial rating of the Class A Certificates);
(c) demand and time deposits in or certificates of deposit
of, or bankers' acceptances issued by, any bank or trust company,
savings and loan association or savings
14
bank, provided, that the short-term deposit ratings and/or long-term
unsecured debt obligations of such depository institution or trust
company (or in the case of the principal depository institutions in a
holding company system, the commercial paper or long-term unsecured
debt obligations of such holding company) have, in the case of
commercial paper, the highest rating available for such securities by
each Rating Agency and, in the case of long-term unsecured debt
obligations, one of the two highest ratings available for such
securities by each Rating Agency, or in each case such lower rating
as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating
Agency but in no event less than the initial rating of the Senior
Certificates;
(d) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving one
of the two highest long-term debt ratings available for such
securities by each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the rating or ratings then
assigned to any Class of Certificates by any Rating Agency;
(e) commercial or finance company paper (including both
non-interest- bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than
one year after the date of issuance thereof) that is rated by each
Rating Agency in its highest short-term unsecured rating category at
the time of such investment or contractual commitment providing for
such investment, and is issued by a corporation the outstanding
senior long-term debt obligations of which are then rated by each
Rating Agency in one of its two highest long-term unsecured rating
categories, or such lower rating as will not result in the
downgrading or withdrawal of the rating or ratings then assigned to
any Class of Certificates by any Rating Agency but in no event less
than the initial rating of the Senior Certificates;
(f) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in one of the two
highest rating levels available to such issuers by each Rating Agency
at the time of such investment, provided, that any such agreement
must by its terms provide that it is terminable by the purchaser
without penalty in the event any such rating is at any time lower
than such level;
(g) repurchase obligations with respect to any security
described in clause (a) or (b) above entered into with a depository
institution or trust company (acting as principal) meeting the rating
standards described in (c) above;
(h) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and rated by each
Rating Agency in one of its two highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities
issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding
principal amount of securities issued by such corporation that are
then held as
15
part of the Certificate Account to exceed 20% of the aggregate
principal amount of all Eligible Investments then held in the
Certificate Account;
(i) units of taxable money market funds (including those for
which the Trustee or any affiliate thereof receives compensation with
respect to such investment) which funds have been rated by each
Rating Agency in its highest rating category or which have been
designated in writing by each Rating Agency as Eligible Investments
with respect to this definition;
(j) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to each Rating Agency as
a permitted investment of funds backing securities having ratings
equivalent to the initial rating of the Class A Certificates; and
(k) such other obligations as are acceptable as Eligible
Investments to each Rating Agency;
provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to
receive principal and interest payments derived from the underlying investment
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Escrow Account: As defined in Section 3.4.
Escrow Payment: Any payment received by the Servicer for the account
of any Mortgagor for application toward the payment of taxes, insurance
premiums, assessments and similar items in respect of the related Mortgaged
Property.
Event of Default: Any event of default as specified in Section 7.1.
Excess Liquidation Proceeds: With respect to any Distribution Date,
the excess, if any, of aggregate Liquidation Proceeds in the applicable
Prepayment Period over the amount that would have been received if a Payoff
had been made on the last day of such applicable Prepayment Period with
respect to each Loan which became a Liquidated Loan during such applicable
Prepayment Period.
Excess Loss: A Special Hazard Loss incurred on a Loan in excess of
the Special Hazard Coverage, a Fraud Loss incurred on a Loan in excess of the
Fraud Coverage and a Bankruptcy Loss incurred on a Loan in excess of the
Bankruptcy Coverage.
Exchange Act: The Securities Exchange Act of 1934, as amended.
16
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
Federal Funds Rate: means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York on the
preceding Business Day opposite the caption "Federal Funds (Effective)"; or,
if for any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined
by the Trustee of the rates for the last transaction in overnight Federal
funds arranged before 9:00 a.m. (New York City time) on that day by each of
three leading brokers of Federal funds transactions in New York City selected
by the Trustee.
FHA: Federal Housing Administration, or any successor thereto.
FHLMC: ▇▇▇▇▇▇▇ Mac, or any successor thereto.
Fitch: Fitch Ratings, provided, that at anytime it be a Rating Agency.
FNMA: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
Fraud Coverage: As of the Cut-Off Date approximately $1,586,315, and
thereafter, the Fraud Coverage will generally be equal to (1) prior to the
third Anniversary, an amount equal to 1.00% of the aggregate Principal Balance
of all Loans, as of the Cut-Off Date minus the aggregate amounts allocated to
the Certificates with respect to Fraud Losses, up to such date of
determination and (2) from the third to the fifth Anniversary, an amount equal
to (a) 1.00% of the aggregate Principal Balance of all Loans as of the Due
Date of the calender month preceding the most recent Anniversary minus (b) the
aggregate amounts allocated certificates with respect to Fraud Losses on the
related Loans since the most recent Anniversary up to such date of
determination. On and after the fifth Anniversary, the Fraud Coverage will be
zero. The Fraud Coverage may be reduced upon written confirmation from each
Rating Agency that such reduction will not adversely affect the then current
ratings assigned to the Certificates by each Rating Agency.
Fraud Loss: The occurrence of a loss on a Loan arising from any
action, event or state of facts with respect to such Loan which, because it
involved or arose out of any dishonest, fraudulent, criminal, negligent or
knowingly wrongful act, error or omission by the Mortgagor, originator (or
assignee thereof) of such Loan, Lender, or the Servicer, would result in an
exclusion from, denial of, or defense to coverage which otherwise would be
provided by an insurance policy previously issued with respect to such Loan.
Independent: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor and the Servicer, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Depositor or the Servicer or any Affiliate of either and (iii)
is not connected with the Depositor or the Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
17
Indirect DTC Participants: Entities such as banks, brokers, dealers
or trust companies that clear through or maintain a custodial relationship
with a DTC Participant, either directly or indirectly.
Installment Due Date: The first day of the month in which the related
Distribution Date occurs.
Insurance Proceeds: Amounts paid or payable by the insurer under any
insurance policy (including any replacement policy permitted under this
Agreement), covering any Loan or Mortgaged Property, including, without
limitation, any flood insurance policy, primary mortgage insurance policy or
hazard insurance policy required pursuant to Section 3.5, any title insurance
policy required pursuant to Section 2.3, and any FHA insurance policy or VA
guaranty.
Interest Accrual Period: For all Classes of Certificates, the
calendar month preceding the month in which the Distribution Date occurs.
Interest Distribution Amount: On any Distribution Date, for any Class
of Certificates (other than the Principal Only Certificates), the amount of
interest accrued on the respective Class Principal Balance or Class Notional
Amount, as applicable, at 1/12th of the related Remittance Rate for such Class
during the related Interest Accrual Period, before giving effect to
allocations of Realized Losses, for the applicable Prepayment Period or
distributions to be made on such Distribution Date, reduced by Uncompensated
Interest Shortfall, and the interest portion of Realized Losses, allocated to
such Class pursuant to the definition of "Uncompensated Interest Shortfall"
and Section 3.20. The Interest Distribution Amount for the Principal Only
Certificates on any Distribution Date shall equal zero.
Interest Only Certificates: The Class A-X Certificates.
Interested Person: The Depositor, the Servicer, any Holder of a
Certificate, or any Affiliate of any such Person.
Junior Subordinate Certificates: The Class ▇-▇, ▇-▇, ▇-▇ Certificates,
collectively.
Liquidated Loan: A Loan as to which the Servicer has determined in
accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust Fund
shall not constitute final liquidation of the related Loan.
Liquidation Expenses: Reasonable out of pocket expenses incurred by
the Servicer in connection with the liquidation of any Defaulted Loan or
property acquired in respect thereof, including, without limitation, legal
fees and expenses, any unreimbursed amount expended by the Servicer pursuant
to Section 3.7 respecting the related Loan and any unreimbursed expenditures
for real property taxes or for property restoration or preservation relating
to the Mortgaged Property that secured such Loan.
18
Liquidation Principal: The principal portion of Liquidation Proceeds
received with respect to each Loan which became a Liquidated Loan (but not in
excess of the Principal Balance thereof) during the applicable Prepayment
Period, if any.
Liquidation Proceeds: Amounts after deduction of amounts reimbursable
under Section 3.7 received and retained in connection with the liquidation of
Defaulted Loans (including the disposition of REO Property), whether through
foreclosure or otherwise, other than Insurance Proceeds.
Loans: The Mortgages and the related Mortgage Notes, each transferred
and assigned to the Trustee pursuant to the provisions hereof as from time to
time are held as part of the Trust Fund, as so identified in the Loan
Schedule. Each of the Loans is referred to individually in this Agreement as a
"Loan".
Loan Schedule: The schedule, as amended from time to time, of Loans
attached hereto as Exhibit D, which shall set forth as to each Loan the
following, among other things:
(i) the loan number of the Loan and name of the related
Mortgagor;
(ii) the street address of the Mortgaged Property including
city, state and zip code;
(iii) the Mortgage Interest Rate as of the Cut-Off Date;
(iv) the original term and maturity date of the related
Mortgage Note;
(v) the original Principal Balance;
(vi) the first payment date;
(vii) the Monthly Payment in effect as of the Cut-Off Date;
(viii) the date of the last paid installment of interest;
(ix) the unpaid Principal Balance as of the close of
business on the Cut-Off Date;
(x) the Loan-to-Value ratio at origination;
(xi) the type of property and the Original Value of the
Mortgaged Property;
(xii) whether a primary mortgage insurance policy is in
effect as of the Cut-Off Date;
(xiii) the nature of occupancy at origination;
19
(xiv) the servicing fee;
(xv) the county in which Mortgaged Property is located, if
available; and
(xvii) the closing date.
Loan-to-Value Ratio: The original principal amount of a Loan divided
by the Original Value; however, references to "current Loan-to-Value Ratio"
shall mean the then current Principal Balance of a Loan divided by the
Original Value.
Monthly Payment: The scheduled payment of principal and interest on a
Loan which is due on the related Due Date for such Loan after giving effect to
any reduction in the amount of interest collectible from any Mortgagor
pursuant to the Relief Act.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
Mortgage File: As defined in Section 2.1.
Mortgage Interest Rate: For any Loan, the per annum rate at which
interest accrues on such Loan pursuant to the terms of the related Mortgage
Note without regard to any reduction thereof as a result of the Relief Act.
Mortgage Note: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Loan.
Mortgage Pool: All of the Loans.
Mortgaged Property: With respect to any Loan, the real property,
together with improvements thereto, securing the indebtedness of the Mortgagor
under the related Loan.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: With respect to any Loan, any Advance which
the Servicer shall have determined to be a Nonrecoverable Advance pursuant to
Section 4.4 and which was, or is proposed to be, made by such Servicer.
Non-U.S. Person: A Person that is not a U.S. Person.
Officer's Certificate: With respect to any Person, a certificate
signed by the Chairman of the Board, the President or a Vice-President of such
Person (or, in the case of a Person which is not a corporation, signed by the
person or persons having like responsibilities), and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who may be outside
or salaried counsel for the Depositor or the Servicer, or any Affiliate of the
Depositor or the Servicer,
20
acceptable to the Trustee; provided, that with respect to REMIC matters,
matters relating to the determination of Eligible Accounts or matters relating
to transfers of Certificates, such counsel shall be Independent.
Original Value: With respect to any Loan other than a Loan originated
for the purpose of refinancing an existing mortgage debt, the lesser of (a)
the Appraised Value (if any) of the Mortgaged Property at the time the Loan
was originated or (b) the purchase price paid for the Mortgaged Property by
the Mortgagor. With respect to a Loan originated for the purpose of
refinancing existing mortgage debt, the Original Value shall be equal to the
Appraised Value of the Mortgaged Property at the time the Loan was originated
or the appraised value at the time the refinanced mortgage debt was incurred.
OTS: The Office of Thrift Supervision, or any successor thereto.
Ownership Interest: As defined in Section 5.1(b)
Pass-Through Entity: As defined in Section 5.1(b)
Pass-Through Rate: For each Loan and for any date of determination, a
per annum rate equal to the Mortgage Interest Rate for such Loan less the
applicable per annum percentage rate of the Servicing Fee. For each Loan, any
calculation of monthly interest at such rate shall be based upon annual
interest at such rate (computed on the basis of a 360-day year of twelve 30-
day months) on the unpaid Principal Balance of the related Loan divided by
twelve, and any calculation of interest at such rate by reason of a Payoff
shall be based upon annual interest at such rate on the outstanding Principal
Balance of the related Loan multiplied by a fraction, the numerator of which
is the number of days elapsed from the Due Date of the last scheduled payment
of principal and interest to, but not including, the date of such Payoff, and
the denominator of which is (a) for Payoffs received on a Due Date, 360, and
(b) for all other Payoffs, 365.
Paying Agent: As defined in Section 4.10.
Payoff: Any Mortgagor payment of principal on a Loan equal to the
entire outstanding Principal Balance of such Loan, if received in advance of
the last scheduled Due Date for such Loan and accompanied by an amount of
interest equal to accrued unpaid interest on the Loan to the date of such
payment-in-full.
Payoff Earnings: For any Distribution Date with respect to each Loan
on which a Payoff was received by the Servicer during the Prepayment Period,
the aggregate of the interest earned by Servicer from investment of each such
Payoff from the date of receipt of such Payoff until the last day of such
Prepayment Period (net of investment losses).
Payoff Interest: For any Distribution Date with respect to a Loan for
which a Payoff was received by the Servicer during the Prepayment Period, an
amount of interest thereon at the
21
applicable Pass-Through Rate from the first day of such Prepayment Period to
the date of receipt thereof.
Percentage Interest: (a) With respect to the right of each
Certificate of a particular Class in the distributions allocated to such
Class, "Percentage Interest" shall mean the percentage undivided beneficial
ownership interest evidenced by such Certificate of such Class, which
percentage shall equal:
(i) with respect to any Regular Interest Certificate (other
than the Interest Only Certificates), its Certificate Principal
Balance divided by the applicable Class Principal Balance;
(ii) with respect to the Interest Only Certificates, the
portion of the respective Class Notional Amount evidenced by such
Certificate divided by the respective Class Notional Balance; and
(iii) with respect to the Class R Certificate, the percentage
set forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection with
Sections 5.9, 7.1, 7.3, 8.3 and 10.1, "Percentage Interest" shall mean the
percentage undivided beneficial interest evidenced by such Certificate in the
Trust Fund, which for purposes of such rights only shall equal:
(i) with respect to any Certificate (other than the Interest
Only Certificates), the product of (x) 99% and (y) the percentage
calculated by dividing its Certificate Principal Balance by the
Aggregate Certificate Principal Balance; provided, however, that the
product in (x) above shall be increased by one percent (1%) upon each
retirement of an Interest Only Certificate;
(ii) with respect to each Interest Only Certificate, one
percent (1%) of such Certificate Percentage Interest as calculated by
paragraph (a)(ii) of this definition; and
(iii) with respect to the Class R Certificate, zero.
Permitted Transferee: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing, (ii) a foreign government or International Organization, or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such
organization is subject to the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Code Section 1381(a)(2)(C), (v) any electing large
partnership under Section 775 of the Code, (vi) any Person from whom the
Trustee or the Certificate Registrar has not received an affidavit to the
effect that it is not a "disqualified
22
organization" within the meaning of Section 860E(e)(5) of the Code, and (vii)
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 Trust Fund 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 Code
Section 7701 or successor provisions. A corporation shall not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof if all of its activities are subject to tax, and, with the exception
of the FHLMC, a majority of its board of directors is not selected by such
governmental unit.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Plan: As defined in Section 5.1(d).
Premium Loans: All Loans having Pass-Through Rates in excess of 6.50%.
Prepaid Monthly Payment: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Loan on its scheduled
Due Date and held in the related Custodial Account for P&I until the
Withdrawal Date following its scheduled Due Date.
Prepayment Period: The calendar month immediately preceding any
Distribution Date.
Principal Balance: At the time of any determination, the principal
balance of a Loan remaining to be paid at the close of business on the Cut-Off
Date, after deduction of all principal payments due on or before the Cut-Off
Date whether or not paid, reduced by all amounts distributed or to be
distributed to Certificateholders through the Distribution Date in the month
of determination that are reported as allocable to principal of such Loan.
In the case of a Substitute Loan, "Principal Balance" shall mean, at
the time of any determination, the principal balance of such Substitute Loan
transferred to the Trust Fund on the date of substitution, reduced by all
amounts distributed or to be distributed to Certificateholders through the
Distribution Date in the month of determination that are reported as allocable
to principal of such Substitute Loan.
The Principal Balance of a Loan (including a Substitute Loan) shall
not be adjusted solely by reason of any bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period. Whenever a Realized Loss has
been incurred with respect to a Loan during a calendar month, the Principal
Balance of such Loan shall be reduced by the amount of such Realized Loss as
of the Distribution Date next following the end of such calendar month after
giving effect to the allocation of Realized Losses and distributions of
principal to the Certificates.
Principal Distribution Amount: For each of the Class A-1 Certificates,
Class A-2 Certificates, Class A-3 Certificates and Class R Certificate on each
Distribution Date, the
23
Applicable Fraction specified for such Class or Classes of: (i) the Principal
Payment Amount on such Distribution Date in respect of the Loans included in
the related Subgroup or Subgroups, (ii) the Principal Prepayment Amount for
the Loans on such Distribution Date in respect of the Loans included in the
related Subgroup or Subgroups and (iii) the Liquidation Principal for the
Loans on such Distribution Date in respect of the Loans included in the
related Subgroup or Subgroups.
Principal Only Certificates: The Class A-P Certificates.
Principal Payment: Any payment of principal on a Loan other than a
Principal Prepayment.
Principal Payment Amount: On any Distribution Date, the sum,
determined separately for each Subgroup, of (i) the scheduled principal
payments on the Loans due on the related Due Date, (ii) the principal portion
of repurchase proceeds received with respect to any Loan which was repurchased
by the Depositor pursuant to a Purchase Obligation or as permitted by this
Agreement prior to such Distribution Date, and (iii) any other unscheduled
payments of principal which were received with respect to any Loan during the
applicable Prepayment Period, other than Payoffs, Curtailments and Liquidation
Principal.
Principal Prepayment: Any payment of principal on a Loan which
constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: On any Distribution Date, the sum,
determined separately for each Subgroup, of (i) Curtailments received during
the applicable Prepayment Period from such related Loans and (ii) Payoffs
received during the applicable Prepayment Period from the related Loans.
Pro Rata Allocation: The allocation of the principal portion of
certain losses relating to a Loan to the Senior Certificates (other than the
Class A-1 Certificates, the Class A-3 Certificates, the Class A-P Certificates
and the Interest Only Certificates) and/or to the Subordinate Certificates,
pro rata according to their respective Certificate Principal Balances (in the
case of the Class A-1 Certificates, Class A-3 Certificates or Class A-P
Certificates (i) if the loss is recognized with respect to a Discount Loan,
the Discount Fraction of such loss will be allocated to the Class A-P
Certificates and the remainder of such loss will be allocated as described
below in clause (ii) of this definition, (ii) if the loss is recognized with
respect to a Loan in Subgroup 1, the Applicable Fraction relating to the Class
A-1 Certificates of such loss will be allocated to the Class A-1 Certificates,
and the remainder of such loss will be allocated as described above in clause
(i) of this definition, (iii) if the loss is recognized with respect to a Loan
in Subgroup 2, the Applicable Fraction relating to the Class A-1 Certificates
of such loss will be allocated to the Class A-1 Certificates, and the
remainder of such loss will be allocated to the Class A-2 Certificates, Class
R Certificate and Subordinate Certificates as described above in this
definition without regard to this parenthetical and (iv) if the loss is
recognized with respect to a Loan in Subgroup 3, the Applicable Fraction
relating to the Class A-3 Certificates of such loss will be allocated to the
Class A-3 Certificates, and the remainder of such loss will be allocated to
the
24
Class A-2 Certificates, Class R Certificate and Subordinate Certificates as
described above in this definition without regard to this parenthetical) in
reduction thereof, and the allocation of the interest portion of such losses
to the Senior Certificates (other than the Principal Only Certificates) and/or
Subordinate Certificates, pro rata according to the amount of interest accrued
but unpaid on each such Class in reduction thereof and then pro rata according
to their outstanding Certificate Principal Balances, in reduction thereof.
Purchase Obligation: An obligation of the Depositor to repurchase
Loans under the circumstances and in the manner provided in Section 2.2 or
Section 2.3.
Purchase Price: With respect to any Loan to be purchased pursuant to
a Purchase Obligation, or any Loan to be purchased or repurchased relating to
an REO Property, an amount equal to the sum of the Principal Balance thereof,
plus accrued and unpaid interest thereon, if any, to the last day of the
calendar month in which the date of repurchase occurs at a rate equal to the
applicable Pass-Through Rate; provided, however, that no Loan shall be
purchased or required to be purchased pursuant to Section 2.3, or more than
two years after the Closing Date under Section 2.2, unless (a) the Loan to be
purchased is in default, or default is in the judgment of the Depositor
reasonably imminent, or (b) the Depositor, at its expense, delivers to the
Trustee an Opinion of Counsel to the effect that the purchase of such Loan
will not give rise to a tax on a prohibited transaction, as defined in Section
860F(a) of the Code; provided, further, that in the case of clause (b) above,
the Depositor will use its reasonable efforts to obtain such Opinion of
Counsel if such opinion is obtainable.
Rating Agency: Initially, each of S&P and Fitch; thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Depositor, or their respective successors
in interest.
Ratings: As of any date of determination, the ratings, if any, of the
Certificates as assigned by each Rating Agency.
Realized Loss: For any Distribution Date, with respect to any Loan
which became a Liquidated Loan during the related applicable Prepayment
Period, the sum of (i) the principal balance of such Loan remaining
outstanding and the principal portion of Nonrecoverable Advances actually
reimbursed with respect to such Loan (the principal portion of such Realized
Loss), and (ii) the accrued interest on such Loan remaining unpaid and the
interest portion of Nonrecoverable Advances actually reimbursed with respect
to such Loan (the interest portion of such Realized Loss). For any
Distribution Date, with respect to any Loan which is not a Liquidated Loan,
the amount of the Bankruptcy Loss incurred with respect to such Loan as of the
related Due Date will be treated as a Realized Loss.
Record Date: The last Business Day of the month immediately preceding
the month of the related Distribution Date.
Regular Interest Certificates: The Certificates, other than the Class R
Certificate.
25
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Interest Shortfall: With respect to any Distribution Date
and Loan, any reduction in the amount of interest collectible on such Loan for
the most recently ended calendar month immediately preceding such Distribution
Date as a result of the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as such term is
defined in the Code.
REMIC I: The pool of assets (other than any Escrow Account or Accounts)
consisting of the Trust Fund.
REMIC I Regular Interests: The regular interests in REMIC I as
described in Section 2.4 of this Agreement.
REMIC II: The pool of assets consisting of the REMIC I Regular
Interests and all payments of principal or interest on or with respect to the
REMIC I Regular Interests after the Cut-Off Date.
REMIC Provisions: Sections 860A through 860G of the Code, related
Code provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
Remittance Rate: For each Class of interest bearing Certificates or
Components, the per annum rate set forth as the Remittance Rate for such Class
or Component in the Preliminary Statement hereto.
REO Property: A Mortgaged Property, title to which has been acquired
by the Servicer on behalf of the Trust Fund through foreclosure, deed in lieu
of foreclosure or otherwise.
Residual Certificate: The Class R Certificate, which is being issued
in a single class. Components R-1 and R-2 of the Class R Certificate are
hereby each designated the sole Class of "residual interests" in REMIC I and
REMIC II, respectively, for purposes of Section 860G(a)(2) of the Code.
Residual Distribution Amount: On any Distribution Date, any portion
of the Available Distribution Amount remaining after all distributions to the
Certificates pursuant to the definition of Certificate Distribution Amount
(including the Class R Certificate only to the extent of any distributions to
the Class R Certificate pursuant to clause (I)(A)(iv) of such definition).
Upon termination of the obligations created by this Agreement and the Trust
Fund created hereby, the amounts which remain on deposit in the Certificate
Account after payment to the Certificateholders of the amounts set forth in
Section 9.1 of this Agreement, and subject to the conditions set forth
therein.
Responsible Officer: When used with respect to the Trustee or any
Seller, the Chairman or Vice-Chairman of the Board of Directors or Trustees,
the Chairman or Vice-Chairman of the
26
Executive or Standing Committee of the Board of Directors or Trustees, the
President, the Chairman of the Committee on Trust Matters, any Vice-President,
any Assistant Vice-President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, the Controller, any Assistant
Controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers
and in each case having direct responsibility for the administration of this
Agreement, and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. When used with respect to the
Servicer, the Chairman or Vice- Chairman of the Board of Directors or
Trustees, the Chairman or Vice-Chairman of the Executive or Standing Committee
of the Board of Directors or Trustees, the President, any Vice- President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
the Controller and any Assistant Controller or any other officer of the
Servicer customarily performing functions similar to those performed by any of
the above-designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject. When used with
respect to the Depositor or any other Person, the Chairman or Vice-Chairman of
the Board of Directors, the Chairman or Vice-Chairman of any executive
committee of the Board of Directors, the President, any Vice-President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, or
any other officer of the Depositor customarily performing functions similar to
those performed by any of the above-designated officers and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
S&P: Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, provided, that at any time it be a Rating Agency.
Scheduled Principal Balance: With respect to any Loan as of any
Distribution Date, the unpaid principal balance of such Loan as specified in
the amortization schedule at the time relating thereto (before any adjustment
to such schedule by reason of bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) as of the first day of the month
preceding the month of such Distribution Date, after giving effect to any
previously applied Curtailments, the payment of principal due on such first
day of the month and any reduction of the principal balance of such Loan by a
bankruptcy court, irrespective of any delinquency in payment by the related
Mortgagor.
Securities Act: The Securities Act of 1933, as amended.
Seller: ABN AMRO Mortgage Group, Inc.
Senior Certificates: The Class A Certificates and the Class R
Certificate, collectively.
Senior Liquidation Amount: The aggregate, for each Loan included in
Subgroup 2 or Subgroup 3 which became a Liquidated Loan during the applicable
Prepayment Period, of the lesser of: (i) the Senior Percentage of the
Applicable Fraction for the Class A-2 Certificates, the
27
Class R Certificate and the Subordinate Certificates of the Principal Balance
of such Loan and (ii) the Senior Prepayment Percentage of the Applicable
Fraction for the Class A-2 Certificates, the Class R Certificate and the
Subordinate Certificates of the Liquidation Principal with respect to such
Loan.
Senior Percentage: As of the Closing Date, approximately 97.86%, and
thereafter, with respect to any Distribution Date, the sum of the Class
Principal Balances of the Class A-2 Certificates and the Class R Certificate,
divided by the sum of the Class Principal Balances of the Class A-2
Certificates, Class R Certificate and Subordinate Certificates.
Senior Prepayment Percentage: (i) On any Distribution Date occurring
before the Distribution Date in the month of March 2007, 100%; (ii) on any
other Distribution Date on which the Senior Percentage for such Distribution
Date exceeds the initial Senior Percentage, as of the Cut-Off Date, 100%; and
(iii) on any other Distribution Date in the month of March 2007 and
thereafter, 100%, unless:
(a) the mean aggregate Principal Balance of the Loans which are
60 or more days delinquent (including loans in foreclosure and
property held by the Trust Fund) for each of the immediately
preceding six calendar months is less than or equal to 50% of the
Subordinate Amount as of such Distribution Date, and
(b) cumulative Realized Losses on the Loans allocated to the
Subordinate Certificates are less than or equal to the following
amounts:
PERCENTAGE OF THE SUBORDINATE
DISTRIBUTION DATE OCCURRING IN AMOUNT AS OF THE CUT-OFF DATE
------------------------------ -----------------------------
March 2007 through February 2008...................... 30%
March 2008 through February 2009...................... 35%
March 2009 through February 2010...................... 40%
March 2010 through February 2011...................... 45%
March 2011 and thereafter............................. 50%
28
in which case, the Senior Prepayment Percentage shall be as
follows:
DISTRIBUTION DATE OCCURRING IN SENIOR PREPAYMENT PERCENTAGE
------------------------------ ----------------------------
March 2002 through February 2007............... 100%
March 2007 through February 2008............... SENIOR PERCENTAGE + 70% of SUBORDINATE
PERCENTAGE
March 2008 through February 2009............... SENIOR PERCENTAGE + 60% of SUBORDINATE
PERCENTAGE
March 2009 through February 2010............... SENIOR PERCENTAGE + 40% of SUBORDINATE
PERCENTAGE
March 2010 through February 2011............... SENIOR PERCENTAGE + 20% of SUBORDINATE
PERCENTAGE
March 2011 and thereafter...................... SENIOR PERCENTAGE
If on any Distribution Date the allocation to the Certificates (other
than the Class A-P Certificates) of Principal Prepayments in the percentage
required would reduce the sum of the Class Principal Balances of the
Certificates (other than the Class A-P Certificates) below zero, the Senior
Prepayment Percentage for such Distribution Date shall be limited to the
percentage necessary to reduce such sum to zero. Notwithstanding the
foregoing, however, on each Distribution Date, the Class A-P Certificates will
receive the Discount Fraction of all principal payments, including, without
limitation, Principal Prepayments, received in respect of each Discount Loan.
Senior Principal Amount: For any Distribution Date, an amount equal
to the sum of (a) the Senior Percentage of the Applicable Fraction for the
Class A-2 Certificates, the Class R Certificate and the Subordinate
Certificates of the Principal Payment Amount for the Loans included in the
related Subgroups, (b) the Senior Prepayment Percentage of the Applicable
Fraction for the Class A-2 Certificates, the Class R Certificate and the
Subordinate Certificates of the Principal Prepayment Amount for the Loans
included in the related Subgroups and (c) the Senior Liquidation Amount.
Senior Subordinate Certificates: The Class M, Class B-1, and Class
B-2 Certificates, collectively.
Servicer: ABN AMRO Mortgage Group, Inc., a Delaware corporation, or any
successor thereto appointed as provided pursuant to Section 7.5, acting to
service and administer such Loans pursuant to Section 3.1.
Servicer's Section 3.10 Report: A report delivered by the Servicer to
the Trustee or the Certificate Administrator pursuant to Section 3.10.
Servicing Fee: For each Loan, the fee paid to the Servicer to perform
primary servicing functions with respect to such Loan, equal to the per annum
rate of 0.2500% for each Loan in the Loan Schedule on the outstanding
Principal Balance of such Loan.
29
Servicing Officer: Any individual involved in, or responsible for,
the administration and servicing of the Loans whose name and specimen
signature appear on a list of servicing officers furnished to the Trustee on
the Closing Date by the Servicer in the form of an Officer's Certificate, as
such list may from time to time be amended.
Special Hazard Coverage: As of the Cut-Off Date, with respect to the
Mortgage Pool approximately $1,993,690 and thereafter on each anniversary of
the Cut-Off Date, the Special Hazard Coverage shall be reduced, but not
increased, to an amount equal to the lesser of (1) the greatest of (a) the
aggregate Principal Balance of the Loans located in the single California zip
code area containing the largest aggregate Principal Balance of the Loans, (b)
1% of the aggregate unpaid Principal Balance of the Loans and (c) twice the
unpaid Principal Balance of the largest single Loan in each case calculated as
of the Due Date in the immediately preceding month, and (2) the Special Hazard
Coverage as of the Cut-Off Date as reduced by the Special Hazard Losses
allocated to the Certificates since the Cut-Off Date. Special Hazard Coverage
may be reduced upon written confirmation from each Rating Agency that such
reduction will not adversely affect the then current ratings assigned to the
Certificates by each Rating Agency.
Special Hazard Loss: The occurrence of any direct physical loss or
damage to a Mortgaged Property not covered by a standard hazard maintenance
policy with extended coverage which is caused by or results from any cause
except: (i) fire, lightning, windstorm, hail, explosion, riot, riot attending
a strike, civil commotion, vandalism, aircraft, vehicles, smoke, sprinkler
leakage, except to the extent of that portion of the loss which was uninsured
because of the application of a co-insurance clause of any insurance policy
covering these perils; (ii) normal wear and tear, gradual deterioration,
inherent vice or inadequate maintenance of all or part thereof; (iii) errors
in design, faulty workmanship or materials, unless the collapse of the
property or a part thereof ensues and then only for the ensuing loss; (iv)
nuclear reaction or nuclear radiation or radioactive 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 this definition of Special Hazard Loss;
(v) hostile or warlike action in time of peace or war, including action in
hindering, combating or defending against an actual, impending or expected
attack (a) by any government or sovereign power (dejure or defacto), or by an
authority maintaining or using military, naval or air forces, (b) by military,
naval or air forces, or (c) by an agent of any such government, power,
authority or forces; (vi) any weapon of war employing atomic fission or
radioactive force whether in time of peace or war; (vii) insurrection,
rebellion, revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending against such
occurrence; or (viii) seizure or destruction under quarantine or customs
regulations, or confiscation by order of any government or public authority.
Subgroup: Subgroup 1, Subgroup 2 or Subgroup 3, as applicable.
Subgroup 1: All Loans with a Pass-Through Rate of less than 5.50% per
annum.
Subgroup 2: All Loans with a Pass-Through Rate equal to or greater
than 5.50% per annum, but less than 6.00% per annum.
30
Subgroup 3: All Loans with a Pass-Through Rate equal to or greater
than 6.00% per annum.
Subordinate Amount: The excess of the aggregate Scheduled Principal
Balance of the Loans minus the sum of the Certificate Principal Balances of
the Class A Certificates and the Class R Certificate.
Subordinate Certificates: The Class M, Class B-1, Class B-2, Class
B-3, Class B-4 and Class B-5 Certificates, collectively, and designated as
such on the face thereof in substantially the form attached hereto as Exhibits
A-6 through A-11, respectively and for purposes of this Agreement, the "order
of seniority" from highest to lowest of such certificates shall be the order
designated in the beginning of this definition.
Subordinate Liquidation Amount: The excess, if any, of the Applicable
Fraction for the Class A-2 Certificates, Class R Certificate and Subordinate
Certificates of the Liquidation Principal in respect of each Loan in Subgroup
2 or Subgroup 3 for all Loans included in such Subgroup which became
Liquidated Loans during the applicable Prepayment Period, over the Senior
Liquidation Amount for such Distribution Date.
Subordinate Percentage: As of the Closing Date, approximately 2.14%,
and thereafter, with respect to any Distribution Date, the excess of 100% over
the Senior Percentage for such date.
Subordinate Prepayment Percentage: As of the Closing Date, 0.00%, and
thereafter, with respect to any Distribution Date, the excess of 100% over the
Senior Prepayment Percentage.
Subordinate Principal Amount: For each Distribution Date will be
equal to the sum of:
(1) the Subordinate Percentage of the Applicable Fraction for the
Class A-2 Certificates, Class R Certificate and Subordinate
Certificates of the Principal Payment Amount in respect of each
Loan in Subgroup 2 and Subgroup 3;
(2) the Subordinate Principal Prepayment Amount; and
(3) the Subordinate Liquidation Amount;
provided, however, that the Subordinate Principal Amount shall be
reduced by the amounts required to be distributed to the (i) Class
A-P Certificates with respect to Discount Fractional Principal
Shortfall on such Distribution Date and (ii) Class A-1 and Class A-3
Certificates with respect to the Deferred Principal Amounts on such
Distribution Date.
Any reduction in the Subordinate Principal Amount pursuant to the proviso
above shall offset the amount calculated pursuant to clause (1), clause (3)
and clause (2), in such order of priority. On any Distribution Date, the
Subordinate Principal Amount shall be allocated pro rata, by Class Principal
Balance, among the Classes of Subordinate Certificates and paid in the order
of distribution to such Classes pursuant to clause (I)(B) of the definition of
"Certificate Distribution
31
Amount" herein, except as otherwise stated in such definition. Notwithstanding
the foregoing, on any Distribution Date prior to distributions on such date,
if the Subordination Level for any Class of Subordinate Certificates is less
than such percentage as of the Closing Date, the pro rata portion of the
Subordinate Principal Prepayment Amount otherwise allocable to the Class or
Classes junior to such Class will be distributed to the most senior Class of
the Subordinate Certificates for which the Subordination Level is less than
such percentage as of the Closing Date, and to the Classes of Subordinate
Certificates senior thereto, pro rata according to the Class Principal
Balances of such Classes.
Subordinate Principal Prepayment Amount: For each Distribution Date,
the Subordinate Prepayment Percentage of the Applicable Fraction of the Class
A-2 Certificates, Class R Certificate and Subordinate Certificates of the
Principal Prepayment Amount in respect of each Loan in Subgroup 2 or Subgroup
3.
Subordination Level: On any specified date, with respect to any Class
of Subordinate Certificates, the percentage obtained by dividing: (1) the sum
of the Class Principal Balances of all Classes of Certificates which are
subordinate in right of payment to such Class as of such date before giving
effect to distributions or allocations of Realized Losses on the Loans on such
date; by (2) the sum of the Class Principal Balances of all Classes of
Certificates as of such date before giving effect to distributions or
allocations of Realized Losses on the Loans on such date.
Substitute Loan: As defined in Section 2.2.
Tax Matters Person: The Holder of the Class R Certificate issued
hereunder or any Permitted Transferee of such Class R Certificateholder shall
be the initial "tax matters person" for REMIC I and REMIC II within the
meaning of Section 6231(a)(7) of the Code. For tax years commencing after any
transfer of the Class R Certificate, the holder of the greatest Percentage
Interest in the Class R Certificate at year end shall be designated as the Tax
Matters Person with respect to that year. If the Tax Matters Person becomes a
Disqualified Organization, the last preceding Holder of such Authorized
Denomination of the Class R Certificate that is not a Disqualified
Organization shall be Tax Matters Person pursuant to Section 5.1(c). If any
Person is appointed as tax matters person by the Internal Revenue Service
pursuant to the Code, such Person shall be Tax Matters Person.
Transfer: As defined in Section 5.1(b).
Transferee: As defined in Section 5.1(b).
Transferee Affidavit and Agreement: As defined in Section 5.1(c)(i)(B).
Trust Fund: The corpus of the trust created pursuant to Section 2.1
of this Agreement. The Trust Fund consists of (i) the Loans and all rights
pertaining thereto; (ii) such assets as from time to time may be held by the
Trustee (except amounts representing the Servicing Fee and amounts on deposit
in Escrow Accounts); (iii) such assets as from time to time may be held by the
Servicer in a Custodial Account for P&I related to the Loans (except amounts
representing
32
the Servicing Fee); (iv) property which secured a Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure after the Cut-Off Date;
(v) amounts paid or payable by the insurer under any FHA insurance policy and
proceeds of any VA guaranty and any other insurance policy related to any Loan
or the Mortgage Pool; and (vi) the rights and remedies of the Depositor
contained in Section 8 of the Mortgage Loan Purchase Agreement dated as of the
Closing Date, between the Seller and the Depositor.
Trustee: JPMorgan Chase Bank, a New York state banking corporation,
or its successor- in-interest as provided in Section 8.9, or any successor
trustee appointed as herein provided.
Uncollected Interest: With respect to any Distribution Date for any
Loan on which a Payoff was made by a Mortgagor during the related Prepayment
Period, an amount equal to one month's interest at the applicable Pass-Through
Rate on such Loan less the amount of interest actually paid by the Mortgagor
with respect to such Payoff.
Uncompensated Interest Shortfall: With respect to any Distribution
Date, the excess, if any, of (i) the sum of (a) aggregate Uncollected Interest
and (b) aggregate Curtailment Shortfall and (c) any shortfall in interest
collections in the calendar month immediately preceding such Distribution Date
resulting from a Relief Act Interest Shortfall over (ii) Compensating
Interest, which excess shall be allocated to each Class of Certificates pro
rata according to the amount of interest accrued thereon in reduction thereof.
Underwriters: ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and ABN AMRO Incorporated.
U.S. Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations) or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such U.S. Persons have the authority to control all
substantial decisions of the trust. To the extent prescribed in regulations by
the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by
the grantor under subpart E of part 1 of subchapter J of chapter 1 of the
Code), and which was treated as a U.S. Person on August 20, 1996 may elect to
continue to be treated as a U.S. Person notwithstanding the previous sentence.
VA: The Department of Veterans Affairs, formerly known as the Veterans
Administration, or any successor thereto.
Withdrawal Date: The Business Day immediately preceding the related
Distribution Date.
All references to the origination date or original date in the Loan
Schedule with respect to a Loan shall refer to the date upon which the related
Mortgage Note was originated or modified, whichever is later.
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ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Trust Fund. The Depositor, concurrently
with the execution and delivery hereof, does hereby irrevocably sell, convey
and assign to the Trustee and REMIC I without recourse all the right, title
and interest of the Depositor in and to the Trust Fund and to REMIC II without
recourse all the right, title and interest of the Depositor in and to the
REMIC I Regular Interests, for the benefit respectively of REMIC II and the
Certificateholders, including all interest and principal received by the
Depositor with respect to the Loans after the Cut-Off Date (and including
without limitation scheduled payments of principal and interest due after the
Cut-Off Date but received by the Depositor on or before the Cut-Off Date, but
not including payments of principal and interest due on the Loans on or before
the Cut-Off Date). The Depositor, at its own expense, shall file or cause to
be filed protective Form UCC-1 financing statements with respect to the Loans
in the State of Illinois or other applicable jurisdiction, listing itself as
"Debtor" under such financing statement and listing the Trustee, for the
benefit of the Certificateholders, as "Secured Party" under such financing
statement.
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee for the benefit of the Certificateholders
the following documents or instruments with respect to each Loan so assigned:
(i) The original Mortgage Note (or, if the original Mortgage
Note has been lost or destroyed, a lost note affidavit and indemnity)
bearing all intervening endorsements endorsed, "Pay to the order of
JPMorgan Chase Bank, as Trustee, for the benefit of the
Certificateholders of ABN AMRO Mortgage Corporation Series 2002-2
Attn: Institutional Services, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, without recourse" and signed in the name of the Seller
by an Authorized Officer showing an unbroken chain of title from the
originator thereof to the person endorsing;
(ii) (a) The original Mortgage with evidence of recording
thereon, and if the Mortgage was executed pursuant to a power of
attorney, a certified true copy of the power of attorney certified by
the recorder's office, with evidence of recording thereon, or
certified by a title insurance company or escrow company to be a true
copy thereof; provided, that if such original Mortgage or power of
attorney cannot be delivered with evidence of recording thereon on or
prior to the Closing Date because of a delay caused by the public
recording office where such original Mortgage has been delivered for
recordation or because such original Mortgage has been lost, the
Depositor shall deliver or cause to be delivered to the Trustee a
true and correct copy of such Mortgage, together with (1) in the case
of a delay caused by the public recording office, an Officer's
Certificate signed by a Responsible Officer of the Seller stating
that such original Mortgage has been dispatched to the appropriate
public recording official for recordation or (2) in the case of an
original Mortgage that has been lost, a certificate by the
34
appropriate county recording office where such Mortgage is recorded
or from a title insurance company or escrow company indicating that
such original was lost and the copy of the original mortgage is a
true and correct copy;
(b) The original Assignment to "JPMorgan Chase Bank, as
Trustee," which assignment shall be in form and substance acceptable
for recording, or a copy certified by the Seller as a true and
correct copy of the original Assignment which has been sent for
recordation. Subject to the foregoing, such assignments may, if
permitted by law, be by blanket assignments for Loans covering
Mortgaged Properties situated within the same county. If the
Assignment is in blanket form, a copy of the Assignment shall be
included in the related individual Mortgage File.
(iii) The originals of any and all instruments that modify the
terms and conditions of the Mortgage Note, including but not limited
to modification, consolidation, extension and assumption agreements
including any adjustable rate mortgage (ARM) rider, if any,
(iv) The originals of all required intervening assignments, if
any, with evidence of recording thereon, and if such assignment was
executed pursuant to a power of attorney, a certified true copy of
the power of attorney certified by the recorder's office, with
evidence of recording thereon, or certified by a title insurance
company or escrow company to be a true copy thereof; provided, that
if such original assignment or power of attorney cannot be delivered
with evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such
original assignment has been delivered for recordation or because
such original Assignment has been lost, the Depositor shall deliver
or cause to be delivered to the Trustee a true and correct copy of
such Assignment, together with (a) in the case of a delay caused by
the public recording office, an Officer's Certificate signed by a
Responsible Officer of the Seller stating that such original
assignment has been dispatched to the appropriate public recording
official for recordation or (b) in the case of an original assignment
that has been lost, a certificate by the appropriate county recording
office where such assignment is recorded or from a title insurance
company or escrow company indicating that such original was lost and
the copy of the original assignment is a true and correct copy;
(v) The original mortgagee policy of title insurance
(including, if applicable, the endorsement relating to the negative
amortization of the Loans) or in the event such original title policy
is unavailable, any one of an original title binder, an original
preliminary title report or an original title commitment or a copy
thereof certified by the title company with the original policy of
title insurance to follow within 180 days of the Closing Date;
(vi) The mortgage insurance certificate;
(vii) Hazard insurance certificates and copies of the hazard
insurance policy and, if applicable, flood insurance policy; and
35
(viii) Any and all other documents, opinions and certificates
executed and/or delivered by the related Mortgagor and/or its counsel
in connection with the origination of such Mortgage Loan, which may
include truth-in-lending statements and other legal statements, an
appraisal and a survey.
The documents and instruments set forth in clauses (i) - (viii) above shall be
called, collectively, the "Mortgage File".
If the Depositor cannot deliver the original Mortgage with evidence
of recording thereon concurrently with the execution and delivery of this
Agreement because of a delay caused by the public recording office where such
original Mortgage has been delivered for recordation, the Depositor shall
deliver to the Trustee an Officer's Certificate, with a photocopy of such
Mortgage attached thereto, stating that such original Mortgage has been
delivered to the appropriate public recording official for recordation. The
Depositor shall promptly deliver to the Trustee such original Mortgage with
evidence of recording indicated thereon upon receipt thereof from the public
recording official.
The Depositor shall, at its own expense, promptly record or cause to
be recorded in the appropriate public real property or other records each
Assignment referred to in Section 2.1(ii), unless the Depositor delivers to
the Trustee an Independent opinion of counsel admitted to practice law in the
state in which such Mortgaged Property is located to the effect that such
recordation is not necessary to secure the interest in the related Mortgaged
Properties against any other transferee or creditor of the Depositor, in which
case such Assignments shall be delivered to the Trustee for the benefit of the
Certificateholders in recordable form. If the Depositor cannot deliver the
original Assignment concurrently with the execution and delivery of this
Agreement solely because it is in the process of being prepared and recorded
or because of a delay caused by the public recording office where such
original Assignment has been delivered for recordation, the Depositor shall
deliver a blanket Officer's Certificate covering all such Assignments stating
that such original Assignment is in the process of being prepared and recorded
or it has been delivered to the appropriate public recording official for
recordation. Any such original recorded Assignment shall be delivered to the
Trustee within 180 days following the execution of this Agreement.
If the Depositor cannot deliver the original title insurance policy
concurrently with the execution and delivery of this Agreement, the Depositor
shall promptly deliver each such original title insurance policy as soon as
such policy becomes available but in no event later than 120 days following
the execution of this Agreement.
All rights arising out of Loans including, without limitation, all
funds received on or in connection with a Loan shall be held by the Depositor
in trust for the benefit of the Certificateholders. The Depositor shall
maintain a complete set of books and records for each Loan which shall be
clearly marked to reflect the ownership of each Loan by the
Certificateholders.
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It is the express intent of this Agreement that the conveyance of the
Loans by the Depositor to the Trustee as provided in this Section 2.1 be, and
be construed as, a sale of the Loans by the Depositor to the Trustee and that
the sale of the Certificates to the Certificateholders, if they are sold, be,
and be construed as, a sale of a 100% interest in the Loans and the Trust Fund
to such Certificateholders. It is, further, not the intention of this
Agreement that such conveyance be deemed a pledge of the Loans by the
Depositor to the Trustee to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the intent of this
Agreement, the Loans are held to be property of the Depositor, or if for any
other reason this Agreement is held or deemed to create a security interest in
the Loans, then (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code; (b) the conveyance provided for in this Section 2.1 shall be
deemed to be a grant by the Depositor to the Trustee for the benefit of the
Certificateholders of a security interest in all of the Depositor's right,
title and interest in and to the Loans and all amounts payable to the holders
of the Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts, other
than investment earnings, from time to time held or invested in the
Certificate Account, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Trustee or any Custodian of Mortgage
Notes and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "in possession by
the secured party" for purposes of perfecting the security interest pursuant
to Section 9-305 of the New York Uniform Commercial Code; and (d)
notifications to persons holding such property, and acknowledgments, receipts
or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from,
financial intermediaries, bailees or agents (as applicable) of the Trustee for
the benefit of the Certificateholders for the purpose of perfecting such
security interest under applicable law (except that nothing in this clause (d)
shall cause any person to be deemed to be an agent of the Trustee for any
purpose other than for perfection of such security interest unless, and then
only to the extent, expressly appointed and authorized by the Trustee in
writing). The Depositor and the Trustee, upon directions from the Depositor,
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
perfected security interest in Loans, 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 this Agreement.
The Trustee is authorized to appoint ABN AMRO Mortgage Group, Inc. or
any bank or trust company approved by the Depositor as Custodian of the
documents or instruments referred to under (i) through (viii) above, and to
enter into a Custodial Agreement for such purpose and any documents delivered
thereunder shall be delivered to the Custodian and any Officer's Certificates
delivered with respect thereto shall be delivered to the Trustee and the
Custodian.
Section 2.2 Acceptance by Trustee. The Trustee acknowledges, subject
to the provisions of Section 2.1 and to any document exceptions reported
pursuant to the Trustee's reviews as described below, receipt of the Mortgage
Notes (or lost note affidavits and indemnities), the Mortgages, the
assignments of the Mortgages and the Officer's Certificates referred to in
Section
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2.1 above, and declares that it holds and will hold such documents and the
other documents constituting a part of the Mortgage Files delivered to it as
Trustee in trust, upon the trusts herein set forth, for the use and benefit of
all present and future Certificateholders. The Trustee acknowledges that, as
of the date of the execution of this Agreement, the Mortgage Files have been
delivered to the Trustee and the Trustee has conducted a preliminary review of
the Mortgage Files. The Trustee further acknowledges that such review included
a review of the Mortgage Notes (or lost note affidavits and indemnities) to
determine that the appropriate Mortgage Notes (or lost note affidavits and
indemnities) have been delivered and endorsed in the manner set forth in
Section 2.1(i). In connection with such review, the Trustee shall have
delivered an exceptions report indicating any discrepancies relating to such
review. In addition, the Trustee agrees, for the benefit of
Certificateholders, to review each Mortgage File within 45 days, or with
respect to assignments which must be recorded, within 180 days, after
execution of this Agreement to ascertain that all required documents set forth
in items (i), (ii), (v), (vi) and, to the extent delivered to the Trustee,
items (iii), (iv), (vii) and (viii) of Section 2.1 have been executed and
received, and that such documents relate to the Loans identified in Exhibit D
annexed hereto, and in so doing the Trustee may rely on the purported due
execution and genuineness of any such document and on the purported
genuineness of any signature thereon. The Trustee shall have no duty to verify
or determine whether any Mortgage File should contain documents described in
Sections 2.1(iii), (iv), (vii) and (viii). The Trustee shall be under no duty
or obligation to inspect, review or make any independent examination of any
documents contained in each Mortgage File beyond the review specifically
required herein. The Trustee makes no representations as to (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in each Mortgage File or any of the Loans identified on the Loan
Schedule, or (ii) the collectability, insurability, effectiveness or
suitability of any such Loan. If at the conclusion of such 45-day period or
180-day period the Trustee finds any document constituting a part of a
Mortgage File not to have been executed or received or to be unrelated to the
Loans identified in said Exhibit D (each such finding, a "material defect"),
the Trustee shall promptly notify the Depositor, which shall have a period of
90 days after the REMIC has received notice to correct or cure any such
material defect; provided, however, that if the Trustee shall not have
received a document by reason of the fact that such document shall not have
been returned by the appropriate recording office then the Depositor shall
have until a date one year later from the Cut-Off Date to correct or cure such
defect. The Depositor hereby covenants and agrees that, if any such material
defect as defined above is not corrected or cured, the Depositor will, within
90 days of the REMIC having received notice, either (i) repurchase the related
Loan at a price equal to 100% of the Principal Balance of such Loan (or any
property acquired in respect thereof) plus accrued interest on such Principal
Balance at the applicable Mortgage Interest Rate to the next scheduled Due
Date of such Loan or (ii) substitute for any Loan to which such material
defect relates a different mortgage loan (a "Substitute Loan") maturing no
later than and not more than two years earlier than the Loan being substituted
for and having a principal balance equal to or less than and a Mortgage
Interest Rate equal to or greater than the Mortgage Interest Rate of the Loan
being substituted for, a Loan-to-Value Ratio equal to or less than the
Loan-to-Value Ratio of the Loan being substituted for and otherwise having
such characteristics so that the representations and warranties of the
Depositor set forth in Section 2.3 hereof would not have been incorrect had
such Substitute Loan originally been a Loan; provided, however, that if the
Principal Balance of the original Loan exceeds the principal
38
balance of the Substitute Loan, an amount equal to that difference shall be
deposited by the Depositor in the Certificate Account; provided, further,
however, that no such substitution may occur after 90 days of the Closing Date
unless the Trustee shall have received from the Depositor an Opinion of
Counsel to the effect that such substitution will not adversely affect the
REMIC status of REMIC I or REMIC II or constitute a prohibited transaction or
substitution under the REMIC provisions of the Code, and, if applicable,
within the meaning of the REMIC Provisions of the particular State, if any,
which would impose a tax on the Trust Fund. Monthly Payments due with respect
to Substitute Loans in the month of substitution are not a part of the Trust
Fund and will be retained by the Servicer. The Depositor shall notify each
Rating Agency of any such substitution. For the month of substitution,
distributions to Certificateholders will include the Monthly Payment due on
the Loan being substituted for in such month. The purchase price for the
repurchased Loan or property shall be deposited by the Depositor in the
Certificate Account and in the case of a Substitute Loan, the Mortgage File
relating thereto shall be delivered to the Trustee or the Custodian. Upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer or the new Mortgage File, as the case may be, and an
Officer's Certificate that such repurchase or substitution is in accordance
with this Agreement, the Trustee shall release or cause to be released to the
Depositor the related Mortgage File for the Loan being repurchased or
substituted for, as the case may be, and shall execute and deliver or cause to
be executed and delivered such instrument of transfer or assignment presented
to it by the Depositor, in each case without recourse, as shall be necessary
to transfer to the Depositor the Trustee's interest in such original or
repurchased Loan or property and the Trustee shall have no further
responsibility with regard to such Loan. It is understood and agreed that the
obligation of the Depositor to substitute a new Loan for or repurchase any
Loan or property as to which such a material defect in a constituent document
exists shall constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders, but such
obligation shall survive termination of this Agreement. Neither the Trustee
nor the Custodian shall be responsible for determining whether any assignment
or mortgage delivered pursuant to Section 2.1(ii) is in recordable form or, if
recorded, has been properly recorded.
Section 2.3 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Trustee as of the Closing
Date:
(i) that the information set forth in the Loan Schedule
appearing as an exhibit to this Agreement is true and correct in all
material respects at the date or dates respecting which such
information is furnished as specified therein;
(ii) that as of the date of the transfer of the Loans to the
Trustee, the Depositor is the sole owner and holder of each Loan free
and clear of all liens, pledges, charges or security interests of any
nature and has full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same;
(iii) that as of the date of initial issuance of the
Certificates, no payment of principal of or interest on or in respect
of any Loan is 30 days or more past due from the Due Date of such
Loan;
39
(iv) that to the best of the Depositor's knowledge, as of the
date of the transfer of the Loans to the Trustee, there is no valid
offset, defense or counterclaim to any Mortgage Note or Mortgage;
(v) that as of the date of the initial issuance of the
Certificates, there is no proceeding pending, or to the best of the
Depositor's knowledge, threatened for the total or partial
condemnation of any of the Mortgaged Property and, to the best of the
Depositor's knowledge the Mortgaged Property is free of material
damage and is in good repair and neither the Mortgaged Property nor
any improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation;
(vi) that each Loan complies in all material respects with
applicable state or federal laws, regulations and other requirements,
pertaining to usury, equal credit opportunity and disclosure laws,
and each Loan was not usurious at the time of origination;
(vii) that to the best of the Depositor's knowledge, as of the
date of the initial issuance of the Certificates, all insurance
premiums previously due and owing with respect to the Mortgaged
Property have been paid and all taxes and governmental assessments
previously due and owing, and which may become a lien against the
Mortgaged Property, with respect to the Mortgaged Property have been
paid;
(viii) that each 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 except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equity principles
(regardless of whether such enforcement is considered in a proceeding
in equity or at law); all parties to the Mortgage Note and the
Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage; and each Mortgage Note and Mortgage have been duly and
properly executed by the Mortgagor;
(ix) that each Mortgage is a valid and enforceable first lien
on the property securing the related Mortgage Note, and that each
Loan is covered by an ALTA mortgagee title insurance policy or other
form of policy or insurance generally acceptable to FNMA or FHLMC,
issued by, and is a valid and binding obligation of, a title insurer
acceptable to FNMA or FHLMC insuring the originator, its successor
and assigns, as to the lien of the Mortgage in the original principal
amount of the Loan subject only to (a) the lien of current real
property taxes and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage acceptable to mortgage lending institutions in the area in
which the Mortgaged Property is located or specifically referred to
in the appraisal performed in connection with the origination of the
related Loan and (c) such other matters to which like properties are
commonly subject which do not individually, or in the aggregate,
materially interfere with the benefits of the security intended to be
provided by the Mortgage;
40
(x) that as of the initial issuance of the Certificates,
neither the Depositor nor any prior holder of any Mortgage has,
except as the Mortgage File may reflect, modified the Mortgage in any
material respect; satisfied, canceled or subordinated such Mortgage
in whole or part; released such Mortgaged Property in whole or in
part from the lien of the Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction;
(xi) that each Mortgaged Property consists of a fee simple
estate or a condominium form of ownership in real property;
(xii) no foreclosure action is threatened or has been commenced
(except for the filing of any notice of default) with respect to the
Loan; and except for payment delinquencies not in excess of 30 days,
to the best of the Depositor's knowledge, there is no default,
breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of
time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of
acceleration; and the Depositor has not waived any default, breach,
violation or event of acceleration;
(xiii) that each Loan was originated on FNMA or FHLMC uniform
instruments for the state in which the Mortgaged Property is located;
(xiv) that based upon a representation by each Mortgagor at the
time of origination or assumption of the applicable Loan, 94.15% of
the Loans, measured by Principal Balance were to be secured by
primary residences and no more than 5.35% of the Loans, measured by
Principal Balance were to be secured by second homes;
(xv) that an appraisal of each Mortgaged Property was conducted
at the time of origination of the related Loan, and that each such
appraisal was conducted in accordance with FNMA or FHLMC criteria, on
FNMA or FHLMC forms and comparables on at least three properties were
obtained;
(xvi) that no Loan had a Loan-to-Value Ratio at origination in
excess of 95%;
(xvii) the Loans were not selected in manner to adversely
affect the interests of the Certificateholders and the Depositor
knows of no conditions which reasonably would cause it to expect any
Loan to become delinquent or otherwise lose value;
(xviii) each Loan was either (A) originated directly by or
closed in the name of either: (i) a savings and loan association,
savings bank, commercial bank, credit union, insurance company, or
similar institution which is supervised and examined by a federal or
state authority or (ii) a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act or (B) originated or underwritten by an entity
employing underwriting standards consistent
41
with the underwriting standards of an institution as described in
subclause (A)(i) or (A)(ii) above;
(xix) each Loan is a "qualified mortgage" within the meaning of
Section 860G of the Code without regard to ss. 1.860G-2(f) of the
REMIC Provisions or any similar rule;
(xx) each Loan that has a Loan-to-Value Ratio in excess of 80%
is covered by a primary mortgage insurance policy; and
(xxi) that no Loan permits negative amortization or the
deferral of accrued interest.
It is understood and agreed that the representations and warranties
set forth in this Section 2.3 shall survive delivery of the respective
Mortgage Files to the Trustee, or to a Custodian, as the case may be. Upon
discovery by the Depositor, Servicer, the Trustee or any Custodian of a breach
of any of the foregoing representations and warranties (referred to herein as
a "breach"), without regard to any limitation set forth in such representation
or warranty concerning the knowledge of the Depositor as to the facts stated
therein, which breach materially and adversely affects the interests of the
Certificateholders in the related Loan, the party discovering such breach
shall give prompt written notice to the others and to each Rating Agency.
Within 90 days of its discovery or its receipt or any Seller's
receipt of notice of breach, the Depositor shall or shall cause such Seller to
cure such breach in all material respects or shall repurchase the Loan or any
property acquired in respect thereof from the Trustee at a repurchase price
equal to 100% of the Principal Balance of such Loan plus accrued interest on
such Principal Balance at the Mortgage Interest Rate to the next scheduled Due
Date of such Loan or remove such Loan from the Trust Fund and substitute in
its place a Substitute Loan or Loans with the characteristics set forth in
Section 2.2 above for Substitute Loans; provided, however, that if such breach
would cause the Loan to be other than a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code, any such cure, repurchase or substitution must
occur within 90 days from the date such breach was discovered; provided,
further, that no substitution (or cure which would constitute a loan
modification for federal income tax purposes) may be effected any later than
two years after the Closing Date; provided, further, that as a pre-condition
to any substitution (or cure which would constitute a loan modification for
federal income tax purposes) to be effected later than 90 days after the
Closing Date (and within two years of the Closing Date), the Trustee shall
receive from the Depositor an Opinion of Counsel to the effect that such
substitution (or cure which would constitute a loan modification for federal
income tax purposes) will not adversely affect the REMIC status of REMIC I or
REMIC II or constitute a prohibited transaction under the REMIC Provisions of
the Code and, if applicable, the REMIC provisions of the relevant State.
Except as expressly set forth herein, neither the Trustee nor the Servicer is
under any obligation to discover any breach of the above mentioned
representations and warranties. It is understood and agreed that the
obligation of the Depositor or the Seller to repurchase or substitute any Loan
or property as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholders, and such
obligation shall survive as the obligation of the Depositor, the Seller or
their respective successors.
42
Section 2.4 Authentication and Delivery of Certificates; Designation
of Certificates as REMIC Regular and Residual Interests.
(a) The Trustee acknowledges the transfer to the extent provided
herein and assignment to it of the Trust Fund and, concurrently with such
transfer and assignment, has caused to be authenticated and delivered to or
upon the order of the Depositor, in exchange for the Trust Fund, Certificates
evidencing the entire ownership of the Trust Fund.
(b) This Agreement shall be construed so as to carry out the
intention of the parties that each of REMIC I and REMIC II be treated as a
REMIC at all times prior to the date on which the Trust Fund is terminated.
The "regular interests" (within the meaning of Section 860G(a)(1) of the Code)
in REMIC II shall consist of the Class A Certificates and the Subordinate
Certificates. The "residual interest" (within the meaning of Section
860G(a)(2) of the Code) in REMIC II shall consist of Component R-2 of the
Class R Certificate. The "regular interests" (within the meaning of Section
860G(a)(1) of the Code) of REMIC I shall consist of the Class A-1 Regular
Interest, the Class A-2 Regular Interest, the Class A-3 Regular Interest, the
Class A-P Regular Interest, the A-X Regular Interest and the Subordinate
Regular Interest. The "residual interest" (within the meaning of Section
860(G)(a)(2) of the Code) of REMIC I shall consist of Component R-1 of the
Class R Certificate.
(c) All payments with respect to each of the ▇-▇, ▇-▇, ▇-▇, A-P and
A-X Certificates and shall each be considered to have been made solely from
the Regular Interest of REMIC I having the same designation. All principal
payments with respect to each such Class of Certificates (other than the Class
A-X Certificates) shall be considered to have been made solely from the
principal payments of the corresponding Regular Interest of REMIC I, and the
principal balance of each such corresponding principal bearing Regular
Interest of REMIC I shall be equal at all times to the principal balance of
each such principal-bearing Class of Certificates. All interest payments with
respect to the Class A-X Certificates shall be considered to have been made
solely from the interest payments of the Class A-X Regular Interest of REMIC
I, and the notional principal balance of the Class A-X Regular Interest shall
be equal at all times to the Class A-X Notional Amount.
The interest rate of the REMIC I Class A-1 Regular Interest shall be
5.50%. The interest rate of the REMIC I Class A-2 Regular Interest shall be
6.00%. The interest rate of the REMIC I Class A-3 Regular Interest shall be
6.50%. The interest rate of the REMIC I Class A-X Regular Interest shall be
6.50%. The REMIC I Class A-P Regular Interest shall not bear interest, but
will receive principal only in respect of the Loans.
(d) All payments with respect to the Class M, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and
B-5 Certificates of REMIC II shall be considered to have been made solely from
the Subordinate Regular Interest. The principal balance of the Subordinate
Regular Interest is equal at all times to the aggregate of the principal
balances of the Class M, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and B-5 Certificates of REMIC II.
The interest rate on the Subordinate Interest is 6.00% per annum.
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Section 2.5 Designation of Startup Day. The Closing Date is hereby
designated as the "startup day" of each of REMIC I and REMIC II within the
meaning of Section 860G(a)(9) of the Code.
Section 2.6 No Contributions. The Trustee shall not accept or make
any contribution of cash to the Trust Fund after 90 days of the Closing Date,
and shall not accept or make any contribution of other assets to the Trust
Fund unless, in either case, it shall have received an Opinion of Counsel to
the effect that the inclusion of such assets in the Trust Fund will not cause
either REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Class A or Subordinate Certificates are outstanding or subject the Trust Fund
to any tax on contributions to the REMIC under Section 860G(d) of the Code.
Section 2.7 Representations and Warranties of the Servicer. The
Servicer hereby represents, warrants and covenants to the Trustee for the
benefit of Certificateholders that, as of the date of execution of this
Agreement:
(a) the Servicer is a corporation duly formed and validly
existing under the laws of the State of Delaware;
(b) the execution and delivery of this Agreement by the
Servicer and its performance of and compliance with the terms of this
Agreement will not violate the Servicer's corporate charter or
by-laws or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or result
in the breach of, any material contract, agreement or other
instrument to which the Servicer is a party or which may be
applicable to the Servicer or any of its assets;
(c) this Agreement, assuming due authorization, execution and
delivery by the Trustee and the Depositor, constitutes a valid, legal
and binding obligation of the Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(d) the Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Servicer or its
properties or might have consequences that would affect its
performance hereunder;
(e) no litigation is pending or, to the best of the Servicer's
knowledge, threatened against the Servicer which would prohibit its
entering into this Agreement or performing its obligations under this
Agreement; and
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(f) as long as the Servicer has any obligations to service the
Loans hereunder (and it has not assigned such obligations pursuant to
Section 3.1(c)), it shall be a FNMA or a FHLMC-qualified servicer.
It is understood and agreed that the representations and warranties
set forth in this Section 2.7 shall survive delivery of the respective
Mortgage Files to the Trustee, or to a Custodian, as the case may be.
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.1 Servicer to Act as Servicer; Administration of the Loans.
--------------------------------------------------------
(a) The Servicer shall service and administer the Loans on behalf of
the Trust Fund solely in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment)
and the Trustee (as trustee for Certificateholders) in accordance with the
terms of this Agreement and the respective Loans and, to the extent consistent
with such terms, in the same manner in which, and with the same care, skill,
prudence and diligence with which, it services and administers similar
mortgage loans for other portfolios, giving due consideration to customary and
usual standards of practice of prudent institutional residential mortgage
lenders and loan servicers, and taking into account its other obligations
hereunder, but without regard to:
(i) any relationship that the Servicer, any sub-servicer, any
special servicer or any Affiliate of the Servicer, any sub-servicer
or any special servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the Servicer, any
special servicer or any Affiliate of the Servicer, any sub-servicer
or any special servicer;
(iii) the Servicer's, any sub-servicer's or any special
servicer's right to receive compensation for its services hereunder
or with respect to any particular transaction; or
(iv) the ownership, or servicing or management for others, by
the Servicer, any sub-servicer or any special servicer, of any other
mortgage loans or property.
To the extent consistent with the foregoing and subject to any
express limitations set forth in this Agreement, the Servicer shall seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes; provided, however, that nothing herein contained shall be
construed as an express or implied guarantee by the Servicer of the
collectability of the Loans. Subject only to the above-described servicing
standards and the terms of this Agreement and of the respective Loans, the
Servicer, as an independent contractor, shall service and administer the Loans
and shall have full power and authority, acting alone or through one or
45
more subservicers, special servicers or agents (subject to paragraph (c) of
this Section 3.1), to do any and all things in connection with such servicing
and administration which it may deem necessary or desirable for the purpose of
conserving the assets of the Trust Fund. Without limiting the generality of
the foregoing, the Servicer shall and is hereby authorized and empowered by
the Trustee to continue to execute and deliver, on behalf of itself, the
Certificateholders and the Trustee or any of them, any and all financing
statements, continuation statements and other documents or instruments
necessary to maintain the lien on each Mortgaged Property and related
collateral; and modifications, waivers, consents or amendments to or with
respect to any documents contained in the related Mortgage File; and 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 Loans
and with respect to the related Mortgaged Properties. Notwithstanding the
foregoing, the Servicer (whether acting alone or through one or more
subservicers, special servicers or agents) shall not modify, amend, waive or
otherwise consent to the change of the terms of any of the Loans (including
without limitation extending the stated maturity date of any Loan or forgiving
principal of or interest on any Loan), except as permitted by Section 3.2
hereof. The Servicer shall service and administer the Loans in accordance with
applicable law and shall provide to the Mortgagors any reports required to be
provided to them thereby. To enable the Servicer to carry out its servicing
and administrative duties hereunder, upon the Servicer's written request
accompanied by the forms of any documents requested, the Trustee shall execute
and deliver to the Servicer any powers of attorney and other documents
necessary or appropriate and the Trustee shall not be responsible for
releasing such powers of attorney. The Trustee shall not be responsible for,
and the Servicer shall indemnify the Trustee for, any action taken by the
Servicer pursuant to the application of any such power of attorney. The
relationship of the Servicer (and of any successor thereto) to the Trustee
under this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) The Servicer, Trustee and Depositor intend that REMIC I and REMIC
II formed hereunder shall constitute, and that the Servicer shall perform its
duties and obligation hereunder so as to qualify each of them as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. The Tax Matters Person, or the Person acting as
attorney-in-fact and agent therefor, shall: (a) prepare and file, or cause to
be prepared and filed, federal tax returns (as well as any other federal and
state information and other returns) using a calendar year as the taxable year
when and as required by the REMIC Provisions; (b) make (or cause to be made)
an election, on behalf of each of REMIC I and REMIC II, to be treated as a
REMIC on the Federal tax return and any applicable state or local returns for
the first taxable year, in accordance with the REMIC Provisions; (c) prepare
and forward, or cause to be prepared and forwarded, to the Certificateholders
all information reports (including, without limitation, the information
required in connection with the computation of the present value of
anticipated excess inclusions as required by ss. 1.860E-2(a)(5) of the REMIC
Provisions) as and when required to be provided to them in accordance with the
REMIC Provisions; (d) conduct the affairs of the Trust Fund at all times that
REMIC I Regular Interests or REMIC II Certificates are outstanding so as to
maintain the status of each of REMIC I and REMIC II as a REMIC under the REMIC
Provisions; and (e) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of either
REMIC I or REMIC II.
46
(c) The Servicer may enter into sub-servicing agreements with third
parties with respect to any of its respective obligations hereunder, provided,
that (1) any such agreement shall be consistent with the provisions of this
Agreement and (2) no sub-servicer retained by the Servicer shall grant any
modification, waiver or amendment to any Loan without the approval of the
Servicer. Any such sub-servicing agreement may permit the sub-servicer to
delegate its duties to agents or subcontractors so long as the related
agreements or arrangements with such agents or subcontractors are consistent
with the provisions of this Section 3.1(c).
Any sub-servicing agreement entered into by the Servicer with a
Person other than the Depositor shall provide that it may be assumed or
terminated by the Trustee if the Trustee has assumed the duties of the
Servicer, without cost or obligation to the assuming or terminating party or
the Trust Fund, upon the assumption by such party of the obligations of the
Servicer pursuant to Section 7.5.
Any sub-servicing agreement, and any other transactions or services
relating to the Loans involving a sub-servicer, including (if applicable) the
Depositor in its capacity as sub-servicer under a sub-servicing agreement and
not in its capacity as a party to this Agreement, shall be deemed to be
between the Servicer and such sub-servicer (including the Depositor) alone,
and the Trustee and the Certificateholders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with
respect to the sub-servicer, except as set forth in Section 3.1(d).
In the event that the Trustee assumes the servicing obligations of
the Servicer, upon request of the Trustee, the Servicer shall at its own
expense deliver to the Trustee all documents and records relating to any
sub-servicing agreement and the Loans then being serviced thereunder and an
accounting of amounts collected and held by it, if any, and will otherwise use
its best efforts to effect the orderly and efficient transfer of any
sub-servicing agreement to the Trustee.
(d) Costs incurred by the Servicer in effectuating the timely payment
of taxes and assessments on the Mortgaged Property securing a Mortgage Note
shall be recoverable by the Servicer pursuant to Section 3.3. The Servicer
shall ensure all such taxes and assessments are timely paid.
The Servicer, as initial servicer, shall pay all of its costs and
proven damages incurred with respect to or arising out of any allegation of
impropriety in its servicing of the Loans. Further, the Servicer shall not be
entitled to reimbursement or indemnification from either the Trust Fund or the
Certificateholders with respect to any such costs, claims and damages.
(e) Notwithstanding any sub-servicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between
the Servicer and any Person (including the Depositor) acting as sub-servicer
(or its agents or subcontractors) or any reference to actions taken through
any Person (including the Depositor) acting as sub-servicer or otherwise, the
Servicer shall remain obligated and primarily liable to the Trustee and
Certificateholders for the servicing and administering of the Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such sub-servicing agreements or
47
arrangements or by virtue of indemnification from the Depositor or any other
Person acting as sub-servicer (or its agents or subcontractors) to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Loans. The Servicer shall be entitled to enter
into an agreement with any sub-servicer providing for indemnification of the
Servicer by such sub-servicer (including the Depositor and the Trustee), and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification, but no such agreement for indemnification shall be deemed to
limit or modify this Agreement.
Section 3.2 Collection of Certain Loan Payments; Custodial Account
for P&I.
(a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Loans, and shall, to
the extent such procedures shall be consistent with this Agreement, follow
such collection procedures as it follows with respect to conventional mortgage
loans it services for itself and any of its Affiliates; provided, however,
that the Servicer agrees not to permit any modification with respect to any
Loan that would change the manner in which the Mortgage Interest Rate is
computed, forgive any principal or interest or change the term of such Loan.
Consistent with the foregoing, the Servicer may in its discretion (i) waive
any assumption fee, late payment charge or other charge in connection with a
Loan, and (ii) arrange a schedule, running for no more than 180 days after the
scheduled Due Date, for payment of any installment on any Mortgage Note or
after the due date of any other payment due under the related Mortgage Note
for the liquidation of delinquent items, provided, that the Servicer shall
continue to be obligated to make Advances in accordance with Section 4.3
during the continuance of such period. With respect to any Loans which provide
for the right of the holder thereof to call for early repayment thereof at
times specified therein, neither the Trustee nor the Servicer shall exercise
any such right, except that the Trustee shall exercise such right at the
written direction of the Servicer set forth in an Officer's Certificate in
connection with a default under the related Note. Notwithstanding anything
herein to the contrary, neither the Servicer nor any other party may take any
action that would cause a "significant modification" of any Loan within the
meaning of the REMIC Provisions that would cause REMIC I or REMIC II to fail
to qualify as a REMIC at any time or cause a tax to be imposed on the Trust
Fund under the REMIC Provisions.
(b) The Servicer shall establish and maintain a separate account as
set forth in Article I (the "Custodial Account for P&I"), and shall on the
Closing Date credit any amounts representing scheduled payments of principal
and interest due after the Cut-off Date but received by the Servicer on or
before the Closing Date, and thereafter on a daily basis the following
payments and collections received or made by it (other than in respect of
principal of and interest on the Loans due on or before the Cut-off Date):
(i) All Mortgagor payments on account of principal, including
Principal Prepayments on the Loans;
(ii) All Mortgagor payments on account of interest on the
Loans, which may be net of that portion thereof which the Servicer is
entitled to retain as Servicing Fees
48
(adjusted for any amounts related to Compensating Interest) pursuant
to Section 3.9, as adjusted pursuant to Section 4.6;
(iii) All net Liquidation Proceeds;
(iv) All Insurance Proceeds received by the Servicer, other
than proceeds to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor
in accordance with the Servicer's normal servicing procedures, and
all amounts deposited by the Servicer with respect to the failure to
maintain flood or fire and hazard insurance policies, pursuant to
Section 3.5;
(v) All repurchase proceeds from the repurchase of a Loan
pursuant to a Purchase Obligation;
(vi) any amounts required to be deposited pursuant to Section
3.2(c) in connection with net losses realized on Eligible Investments
with respect to funds held in the Custodial Account for P&I;
(vii) all income and gain realized from any investment of the
funds in the Custodial Account for P&I in Eligible Investments;
(viii) all net income from the renting of REO Property pursuant
to Section 3.7(c); and
(ix) All other amounts required to be deposited in the
Custodial Account for P&I pursuant to this Agreement.
(c) The Servicer may invest the funds in the Custodial Account for
P&I in Eligible Investments which shall mature not later than the second
Business Day preceding the next Distribution Date unless the Custodial Account
for P&I is maintained with the Trustee in which case they may mature one
Business Day prior to the Distribution Date. The Eligible Investments may not
be sold or disposed of prior to their maturity. All such Eligible Investments
shall be made in the name of the Servicer (in its capacity as such) or its
nominee. All income and gain realized from any such investment shall be for
the benefit of the Servicer, and shall be payable to the Servicer. The amount
of any losses incurred in respect of any such investments shall be deposited
in the Custodial Account for P&I by the Servicer, out of its own funds
immediately as realized without right to reimbursement therefor.
(d) The foregoing requirements for deposit in the Custodial Account
for P&I shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of those
described in the last paragraph of this Section 3.2 and payments in the nature
of late payment charges or assumption fees need not be deposited by the
Servicer in the Custodial Account for P&I. All funds deposited by the Servicer
in the Custodial Account for P&I shall be held by it in trust in the Custodial
Account for P&I until disbursed in accordance with Section 4.1 or withdrawn in
accordance with Section 3.3; provided, however, that the
49
Servicer shall withdraw such funds and deposit them in such manner as to not
result in a downgrading or withdrawal of the rating then assigned to the
Certificates by each Rating Agency. If the Servicer deposits in the Custodial
Account for P&I any amount not required to be deposited therein, it may at any
time withdraw such amount from the Custodial Account for P&I pursuant to
Section 3.3(i) of this Agreement.
Certain of the Loans may provide for payment by the Mortgagor of
amounts to be used for payment of taxes, assessments, hazard or other
insurance premiums or comparable items for the account of the Mortgagor. The
Servicer may deal with these amounts in accordance with its normal servicing
procedures.
Section 3.3 Permitted Withdrawals from the Custodial Account for P&I.
The Servicer may, from time to time, make withdrawals from the Custodial
Account for P&I for the following purposes:
(a) to reimburse itself for Advances made by it pursuant to
Section 3.4 or 4.3, the Servicer's right to reimburse itself pursuant
to this subclause (a) being limited to (i) amounts received on or in
respect of particular Loans (including, for this purpose, Liquidation
Proceeds and Insurance Proceeds which represent late recoveries of
payments of principal and/or interest respecting which any such
Advance was made and any net income received from the renting of REO
Property pursuant to Section 3.7(c)) and (ii) amounts in the
Custodial Account for P&I held for future distribution or withdrawal,
such amounts referred to in clause (ii) of this subclause (a) to be
replaced by the Servicer to the extent that funds in the Custodial
Account for P&I on a future Withdrawal Date are less than the payment
required to be made to the Certificate Account therefrom as of such
future Distribution Date;
(b) (i) to reimburse itself from Liquidation Proceeds for
Liquidation Expenses, (ii) for amounts expended by it pursuant to
Section 3.7 in good faith in connection with the restoration of
damaged property and (iii) to the extent that Liquidation Proceeds
after such reimbursement are in excess of the Principal Balance of
the related Loan together with accrued and unpaid interest thereon at
the applicable Pass-Through Rate to the date of such liquidation, net
of any related Advances which were unreimbursed prior to the receipt
of such Liquidation Proceeds, to pay to itself any unpaid Servicing
Fees, and any assumption fees, late payment charges or other Mortgage
charges on the related Loan;
(c) to pay to itself from any Mortgagor payment as to interest
or other recovery with respect to a particular Loan, to the extent
permitted by this Agreement, that portion of any payment as to
interest in excess of interest at the applicable Pass-Through Rate
which the Servicer is entitled to retain as Servicing Fees pursuant
to Section 3.9 or otherwise;
(d) to reimburse itself for expenses incurred by and
recoverable by or reimbursable to it pursuant to Section 3.1 or 3.5
after the related Mortgagor has
50
reimbursed the Trust Fund for such expenses or following liquidation
of the related Loan, or pursuant to Section 6.3;
(e) to pay to itself with respect to each Loan or property
acquired in respect thereof that has been repurchased pursuant to
Section 2.2 or 2.3 or purchased by the Class R Certificateholder
pursuant to Section 9.1 all amounts received thereon and not
distributed as of the date on which the related Principal Balance is
determined;
(f) to reimburse itself for any Nonrecoverable Advances;
(g) to disburse to the Trustee or its designee in order that
the Trustee or its designee may make payments to Certificateholders
in the amounts and in the manner provided for in Section 4.1;
(h) to pay itself any net interest or other income earned and
received on or investment income received with respect to funds in
the Custodial Account for P&I; and
(i) to make payments to itself or others pursuant to any
provision of this Agreement and to remove any amounts not required to
be deposited therein and to clear and terminate the Custodial Account
for P&I pursuant to Section 9.1.
Since in connection with withdrawals pursuant to subclauses (a), (b),
(c) and (e) the Servicer's entitlement thereto is limited to collections or
other recoveries on the related Loan, the Servicer shall keep and maintain a
separate accounting for each Loan for the purpose of justifying any withdrawal
from the Custodial Account for P&I pursuant to such subclauses.
The Servicer shall make the withdrawal referred to in subclause (g)
above and shall deposit the amount so withdrawn into the Certificate Account
prior to 4:00 P.M. New York City time on each related Withdrawal Date.
Section 3.4 Taxes, Assessments and Similar Items; Escrow Accounts.
-----------------------------------------------------
(a) The Servicer shall establish and maintain one or more accounts
(each, an "Escrow Account") into which all Escrow Payments shall be promptly
deposited and in which all Escrow Payments shall be retained. Escrow Accounts
shall be Eligible Accounts, and funds in the Escrow Account may be invested in
Eligible Investments. The Servicer shall notify the Trustee in writing of the
location and account number of each Escrow Account it establishes and shall
notify the Trustee prior to any subsequent change thereof. Withdrawals of
amounts from an Escrow Account may be made only to: (i) effect payment of
taxes, assessments, insurance premiums and comparable items; (ii) refund to
Mortgagors any sums that are determined to be overages; (iii) reimbursement to
the Servicer for any cost incurred in paying taxes, insurance premiums and
assessments or comparable items; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) withdraw
interest or other income which may lawfully be retained by the Trust Fund, for
deposit into the Certificate Account; or (vi) clear and terminate the Escrow
Account at the termination of this Agreement in accordance
51
with Section 9.1. Unless otherwise required by applicable law, any interest
earned on funds in Escrow Accounts shall be remitted to the related Mortgagors
if required by the related Mortgage Note or otherwise to the Servicer as
additional servicing compensation.
(b) With respect to each Loan, the Servicer shall maintain accurate
records with respect to each related Mortgaged Property reflecting the status
of taxes, assessments and other similar items that are or may become a lien on
the related Mortgaged Property and the status of insurance premiums payable
with respect thereto. The Servicer shall require that payments for taxes,
assessments, insurance premiums and other similar items be made by the
Mortgagor at the time they first become due. If a Mortgagor fails to make any
such payment on a timely basis, the Servicer shall advance the amount of any
shortfall unless the Servicer determines in its good faith judgment that such
advance would not be ultimately recoverable from future payments and
collections on the related Loan (including without limitation Insurance
Proceeds and Liquidation Proceeds), or otherwise. The Servicer shall be
entitled to reimbursement of advances it makes pursuant to the preceding
sentence, together with interest thereon at the Federal Funds Rate, from
amounts received on or in respect of the related Loan respecting which such
advance was made or if such advance has become nonrecoverable, in either case
to the extent permitted by Section 3.3 of this Agreement. No costs incurred by
the Servicer in effecting the payment of taxes and assessments on the
Mortgaged Properties shall, for the purpose of calculating distributions to
Certificateholders, be added to the amount owing under the related Loans,
notwithstanding that the terms of such Loans so permit.
Section 3.5 Maintenance of Insurance. The Servicer shall also cause
to be maintained for each Loan fire and hazard insurance with extended
coverage as is customary in the area where the Mortgaged Property is located
in an amount which is at least equal to the lesser of (i) the Principal
Balance of such Loan or (ii) the replacement value costs of improvements
securing such Loan. The Servicer shall cause to be maintained fire and hazard
insurance with extended coverage on each REO Property in an amount which is at
least equal to the greater of (i) an amount not less than is necessary to
avoid the application of any co-insurance clause contained in the related fire
and hazard insurance policy or (ii) the replacement cost of the improvements
which are a part of such property. The Servicer shall also cause to be
maintained for each Loan with a Loan-to-Value Ratio greater than 80% a primary
mortgage insurance policy which will cover at least 75% of the original fair
market value of the related Mortgaged Property until such time as the
principal balance of such Loan is reduced to 80% of the current fair market
value or otherwise in accordance with applicable law. The Servicer on behalf
of the Trustee as Mortgagee shall maintain or cause the related Mortgagor to
maintain for each Loan such other insurance on the related Mortgaged Property
as may be required by the terms of the related Mortgage Note. If the Mortgaged
Property is in an area identified in the Federal Register by the Flood
Emergency Management Agency as having special flood hazards the Servicer will
cause to be maintained a flood insurance policy meeting the requirements of
the current guidelines of the Federal Insurance Administration with a
generally acceptable insurance carrier, in an amount representing coverage not
less than the least of (i) the full insurable value, (ii) the maximum amount
of insurance which is available under the Flood Disaster Protection Act of
1973, and (iii) the Principal Balance of the related Loan. The Servicer shall
also maintain fire and hazard insurance with extended coverage and, if
applicable, flood insurance on property acquired upon
52
foreclosure, or by deed in lieu of foreclosure, of any Loan in an amount that
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the principal balance
owing on such Loan at the time of such foreclosure or grant of deed in lieu of
foreclosure plus accrued interest and related Liquidation Expenses. If an REO
Property was located at the time of origination of the related Loan in a
federally designated special flood hazard area, the Servicer will obtain flood
insurance in respect thereof providing substantially the same coverage as
described in the preceding sentence. If at any time during the term of this
Agreement a recovery under a flood or fire and hazard insurance policy in
respect of an REO Property is not available but would have been available if
such insurance were maintained thereon in accordance with the standards
applied to Mortgaged Properties described herein, the Servicer shall either
(i) immediately deposit into the Custodial Account for P&I from its own funds
the amount that would have been recovered or (ii) apply to the restoration and
repair of the property from its own funds the amount that would have been
recovered, if such application would be consistent with the servicing standard
set forth in Section 3.1. It is understood and agreed that such insurance
shall be with insurers approved by the Servicer and that no earthquake or
other additional insurance is to be required of any Mortgagor, other than
pursuant to such applicable laws and regulations or policies of the Servicer
as shall at any time be in force and as shall require such additional
insurance. Pursuant to Section 3.2, any amounts collected by the Servicer
under any insurance policies maintained pursuant to this Section 3.5 (other
than amounts to be applied to the restoration or repair of the property
subject to the related Mortgage or released to the Mortgagor in accordance
with the Servicer's normal servicing procedures) shall be deposited into the
Custodial Account for P&I, subject to withdrawal pursuant to Section 3.3. Any
cost incurred by the Servicer in maintaining any such insurance shall be
recoverable by the Servicer pursuant to Section 3.3. In the event that the
Servicer shall obtain and maintain a blanket policy issued by an insurer that
qualifies under the guidelines set forth for the Servicer by FNMA or FHLMC,
insuring against hazard losses on all of the Loans, then, to the extent such
policy provides coverage in an amount equal to the unpaid principal balance on
the Loans without co-insurance and otherwise complies with all other
requirements set forth in the first paragraph of this Section 3.5, it shall
conclusively be deemed to have satisfied its obligation as set forth in such
first paragraph, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related mortgaged or acquired property
an insurance policy complying with the first paragraph of this Section 3.5 and
there shall have been a loss which would have been covered by such a policy
had it been maintained, be required to deposit from its own funds into the
Custodial Account for P&I or apply to the restoration of the property the
amount not otherwise payable under the blanket policy because of such
deductible clause.
The Servicer shall obtain and maintain at its own expense throughout
the term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy with broad coverage with responsible companies covering the
Servicer's officers and employees and other persons acting on behalf of the
Servicer in connection with its activities under this Agreement. Any such
fidelity bond and errors and omissions insurance shall provide an amount of
coverage and will maintain such coverage at a level which will permit the
Servicer to continue to be a FNMA or a FHLMC-qualified Servicer and shall
protect and insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such
53
persons. No provision of this Section 3.5 requiring such fidelity bond and
errors and omissions insurance shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement.
Section 3.6 Enforcement of Due-on-Sale Clauses; Assumption and
Substitution Agreements. In any case in which property subject to a Mortgage
is conveyed by the Mortgagor, the Servicer will enforce any due-on-sale clause
contained in the related 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
related insurance policy or result in legal action by the Mortgagor. Subject
to the foregoing, the Servicer is authorized to take or enter into an
assumption or substitution agreement from or with the Person to whom such
property has been or is about to be conveyed. The Servicer is also authorized
to release the original Mortgagor from liability upon the Loan and substitute
the new Mortgagor as obligor thereon. In connection with such assumption or
substitution, the Servicer shall apply such underwriting standards and follow
such practices and procedures as shall be normal and usual and as it applies
to mortgage loans owned solely by it or any of its Affiliates. The Servicer
shall notify the Trustee that any such assumption or substitution agreement
has been completed by forwarding to the Trustee the original copy of such
assumption or substitution agreement, which copy shall be added by the Trustee
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. In connection with any such
assumption or substitution agreement, the interest rate of the related
Mortgage Note shall not be changed. Any fee collected by the Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Servicer as servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any conveyance
by the Mortgagor of the Mortgaged Property or any assumption of a Loan by
operation of law which the Servicer in good faith determines it may be
restricted by law from preventing, for any reason whatsoever.
Section 3.7 Realization upon Defaulted Loans.
--------------------------------
(a) Consistent with the servicing standard set forth in Section 3.1
and with a view to the best economic interest of the Trust Fund, the Servicer
shall foreclose upon or otherwise comparably convert (which may include
acquisition of an REO Property) the Mortgaged Properties securing such of the
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.2. In connection with such foreclosure or other conversion, the
Servicer shall follow such practices and procedures as it shall deem necessary
or advisable and as shall be normal and usual in its general mortgage
servicing activities. The foregoing is subject to the proviso that the
Servicer shall not be required to expend its own funds in connection with any
foreclosure or to restore any damaged property unless it shall determine (i)
that such foreclosure and/or restoration expenses will increase the
Liquidation Proceeds to Certificateholders after reimbursement to itself for
such expenses and (ii) that such expenses will be recoverable to it through
Liquidation
54
Proceeds (respecting which it shall have priority for purposes of withdrawal
from the Custodial Account for P&I pursuant to Section 3.3). Any gain on
foreclosure or other conversion of a Liquidated Loan shall be distributed to
the Class R Certificateholder, but only to the extent that such gain is not
necessary to make distributions to the Certificateholders of the other Classes
of offered Certificates. The 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 (as well as any Servicing Fees
and other amounts due it, if any), to the extent, but only to the extent, that
withdrawals from the Custodial Account for P&I with respect thereto are
permitted under Section 3.3. Within 30 days after receipt of Liquidation
Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the
Trustee a statement of accounting for the related Liquidated Loan, including
without limitation (i) the Loan number, (ii) the date the Loan was acquired in
foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan,
(iii) the gross sales price and the related selling and other expenses, (iv)
accrued interest calculated from the foreclosure date to the liquidation date,
and (v) such other information as the Trustee may reasonably specify.
(b) Prior to any such foreclosure, the Servicer may, at its option,
repurchase any Loan which is 90 days or more delinquent and which the Servicer
determines in good faith would otherwise become subject to foreclosure
proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of
foreclosure at a price equal to the outstanding Principal Balance of the Loan
plus accrued interest at the applicable Pass-Through Rate to the next Due
Date. Any such repurchase shall be deemed a Principal Prepayment for purposes
of this Agreement and all amounts in respect thereof shall be deposited into
the Custodial Account for P&I pursuant to Section 3.2(b).
(c) The Trust Fund shall not acquire any real property (or personal
property incident to such real property) except in connection with a default
or imminent default of a Loan. Based on a report prepared by an Independent
Person who regularly conducts environmental audits that the Mortgaged Property
for which foreclosure proceedings are contemplated is in compliance with
applicable environmental laws, and there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal of any
hazardous materials, wastes, or petroleum based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or that it would be in the
best economic interest of the Trust Fund to acquire title to such Mortgaged
Property and further to take such actions as would be necessary and
appropriate to effect such compliance and/or respond to such circumstances,
the Servicer will not conduct such foreclosure proceedings. If the Servicer
otherwise becomes aware, under its customary servicing procedures, of an
environmental hazard with respect to a Loan for which foreclosure proceedings
are contemplated, the Servicer will not conduct such foreclosure proceedings
unless it determines in good faith that the liability associated with the
environmental hazard will be less than the Liquidation Proceeds to be realized
from the sale of the related Mortgaged Property. In the event that the Trust
Fund acquires any real property (or personal property incident to such real
property) in connection with a default or imminent default of a Loan, such REO
Property shall be disposed of by the Trust Fund within three years after its
acquisition by the Trust Fund unless the Trustee shall have received from the
Servicer an Opinion of Counsel to the effect that the holding
55
by the Trust Fund of such REO Property subsequent to three years after its
acquisition will not cause either REMIC I or REMIC II to fail to qualify as a
REMIC under the REMIC Provisions at any time that any REMIC I Regular
Interests or Certificates are outstanding, in which case such REO Property
shall be disposed of as soon as possible by the Trust Fund but in no event
shall be held longer than the maximum period of time during which the Trust
Fund is then permitted to hold such REO Property and allow REMIC I and REMIC
II to remain qualified as REMICs under the REMIC Provisions. The Servicer
shall manage, conserve, protect and operate each such REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such property is located and may, incident to its conservation
and protection of the interests of the Certificateholders, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the
Servicer and the Certificateholders for the period prior to the sale of such
REO Property. All proceeds from the renting of such REO Property shall, net of
any costs or expenses of the Servicer in connection therewith, be deposited
into the Custodial Account for P&I pursuant to Section 3.3(b)(viii).
(d) In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Loan, such Loan shall (except for purposes of
Section 9.1) be considered to be a Loan held in the Trust Fund until such time
as the related REO Property shall be sold by the Trust Fund and shall be
reduced only by collections net of expenses. Consistent with the foregoing,
for purposes of all calculations hereunder, so long as such Loan shall be
considered to be an outstanding Loan, it shall be assumed that,
notwithstanding that the indebtedness evidenced by the related Mortgage Note
shall have been discharged, such Mortgage Note and, for purposes of
determining the Scheduled Principal Balance thereof, the related amortization
schedule in effect at the time of any such acquisition of title remain in
effect.
(e) The Servicer shall not acquire for the benefit of the Trust Fund
any personal property pursuant to this Section 3.7 unless either:
(i) such personal property is incident to real property (within
the meaning of Section 856(e)(1) of the Code) so acquired by the
Servicer for the benefit of the Trust Fund; or
(ii) the Servicer shall have requested and received an Opinion
of Counsel (which opinion shall be an expense of the Trust Fund) to
the effect that the holding of such personal property by the Trust
Fund will not cause the imposition of a tax on the Trust Fund under
the REMIC Provisions or cause either REMIC I or REMIC II of the Trust
Fund to fail to qualify as a REMIC at any time that any Certificate
is outstanding.
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Section 3.8 Trustee to Cooperate; Release of Mortgage Files. Upon the
payment in full of any Loan, or the receipt by the Servicer of a notification
that the payment in full will be escrowed in a manner customary for such
purposes, the Servicer will immediately notify the Trustee by an Officer's
Certificate (which Officer's Certificate shall include a statement to the
effect that all amounts received in connection with such payment which are
required to be deposited in the Custodial Account for P&I pursuant to Section
3.2 have been or will be so deposited) and shall by such Officer's Certificate
request delivery to it of the Mortgage File. Upon receipt of such Officer's
Certificate and request, the Trustee shall promptly release or cause to be
released the related Mortgage File to the Servicer. Upon the Trustee's receipt
of any release or reconveyance documents or instruments relating to the Loan
paid in full, the Trustee shall, not later than the 5th succeeding Business
Day, execute and return such documents and instruments to the Servicer. From
time to time and as appropriate for the servicing or foreclosure of any Loan,
the Trustee shall, upon written request of the Servicer and delivery to the
Trustee of a trust receipt signed by a Servicing Officer, release or cause to
be released the related Mortgage File to the Servicer and shall execute such
documents furnished to it as shall be necessary to the prosecution of any such
proceedings. Such trust receipt shall obligate the Servicer to return each and
every document previously requested from the Mortgage File to the Trustee when
the need therefor by the Servicer no longer exists unless the Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the trust receipt shall be
released by the Trustee to the Servicer by delivery to a Servicing Officer and
the Trustee shall have no further responsibility with respect to such Mortgage
Files.
Section 3.9 Servicing Compensation. The Servicer shall be entitled to
retain or, if not retained, to withdraw from the Certificate Account as
servicing compensation its Servicing Fee out of each payment on account of
interest on each Loan, subject to adjustment as provided in Section 4.6. The
Servicer shall also be entitled to payment of unpaid Servicing Fees with
respect to a delinquent Loan out of Liquidation Proceeds with respect to such
Loan, to the extent permitted by Section 3.3(b). Servicing compensation in the
form of assumption fees, late payment charges or otherwise shall be retained
by the Servicer and need not be deposited in the Custodial Account for P&I.
The Servicer shall also be entitled to additional servicing compensation out
of Liquidation Proceeds to the extent provided in Section 3.3(b). The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including maintenance of the blanket hazard
insurance policy and the blanket fidelity bond and errors and omissions policy
required by Section 3.5) and shall not be entitled to reimbursement therefor
except as specifically provided in Sections 3.1, 3.3, 3.5 and 3.7.
On each Distribution Date, the Servicer shall pay to the Certificate
Administrator and the Trustee the Certificate Administration and Trustee Fee
out of the Servicing Fee retained by the Servicer on such Distribution Date.
Such amounts shall be compensation for the activities of the Certificate
Administrator and the Trustee hereunder. The Certificate Administrator and the
Trustee shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor, except as specifically provided herein.
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Section 3.10 Reports to the Trustee; Custodial Account for P&I
Statements. On or before each Determination Date, the Servicer shall deliver
or cause to be delivered to the Trustee or its designee a statement in
electronic or written form as may be agreed upon by the Servicer and the
Trustee containing the information described in Section 4.2 and such other
information as may be necessary for the Trustee to distribute the amounts to
be distributed to the Certificateholders by the Trustee (the "Servicer's
Section 3.10 Report"). Not later than 25 days after each Distribution Date,
the Servicer shall forward or cause to be forwarded to the Trustee a
statement, certified by a Servicing Officer, setting forth the status of the
Custodial Account for P&I as of the close of business on the related
Distribution Date, stating that all distributions from the Custodial Account
for P&I required to be made by this Agreement have been made for the period
covered by such statement (or if any required distribution has not been made,
specifying the nature and status thereof) and showing, for the period covered
by such statement, the aggregate of deposits into and withdrawals from the
Custodial Account for P&I for each category of deposit specified in Section
3.2 and each category of withdrawal specified in Section 3.3. Such statement
shall also include information as to the aggregate Principal Balance of all of
the Loans as of the last day of the calendar month immediately preceding such
Distribution Date. Copies of such statement shall be provided to any
Certificateholder upon request by the Servicer, or by the Trustee so long as
the Trustee has received the report as stipulated above at the Servicer's
expense if the Servicer shall fail to provide such copies.
Section 3.11 Annual Statement as to Compliance. The Servicer will
deliver to the Trustee, on or before March 15 of each year, beginning March
15, 2003, an Officer's Certificate stating as to each signer thereof, that (i)
a review of the activities of the Servicer during the preceding calendar year
and of performance under this Agreement has been made under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all of 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. Copies of such statement shall be provided to each
Rating Agency and to any Certificateholder upon request by the Servicer, or by
the Trustee at the Servicer's expense.
Section 3.12 Annual Independent Public Accountants' Servicing Report.
On or before March 15 of each year, beginning March 15, 2003, the Servicer, at
its expense, shall cause a firm of independent public accountants who are
members of the American Institute of Certified Public Accountants to furnish a
statement to the Trustee and each Rating Agency to the effect that such firm
has examined certain documents and records relating to the servicing of the
Loans and that, either (a) on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
FHLMC, such firm is of the opinion that such servicing has been conducted in
compliance with the manner of servicing set forth in agreements substantially
similar to this Agreement except for (i) such exceptions as such firm shall
believe to be immaterial and (ii) such other exceptions as shall be set forth
in such statement or, (b) that their examination conducted substantially in
compliance with the uniform single audit program for mortgage bankers
disclosed no exceptions or errors in records relating to mortgage loans
serviced for others that in their opinion are material and that Paragraph 4 of
that program requires them to
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report. Copies of such statement shall be provided to Certificateholders upon
request by the Servicer, or by the Trustee at the Servicer's expense.
Section 3.13 Access to Certain Documentation and Information
Regarding the Loans. The Servicer shall provide access to the Trustee or to
its designees at its request, and to Certificateholders which are savings and
loan associations, banks or insurance companies, the OTS, the FDIC and the
supervisory agents and examiners of the OTS and the FDIC or examiners of any
other federal or state banking or insurance regulatory authority to the
documentation regarding the Loans if so required by applicable regulations of
the OTS or other regulatory authority, such access to be afforded without
charge but only upon reasonable request and during normal business hours at
the offices of the Servicer designated by it. The Trustee or its designee may
without charge copy any document or electronic record maintained by the
Servicer hereunder.
Section 3.14 [Reserved].
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Section 3.15 Sale of Defaulted Loans and REO Properties.
------------------------------------------
(a) With respect to any Defaulted Loan or REO Property which the
Servicer has determined to sell in accordance with the standards set forth in
Section 3.7, the Servicer shall deliver to the Trustee an Officer's
Certificate to the effect that no satisfactory arrangements can be made for
collection of delinquent payments thereon pursuant to Section 3.2, and,
consistent with the servicing standard set forth in Section 3.1 and with a
view to the best economic interest of the Trust Fund, the Servicer has
determined to sell such Defaulted Loan or REO Property in accordance with this
Section 3.15. The Servicer may then offer to sell to any Person any Defaulted
Loan or any REO Property or, subject to the following sentence, purchase any
such Defaulted Loan or REO Property (in each case at the Repurchase Price
therefor), but shall in any event, so offer to sell any REO Property no later
than the time determined by the Servicer to be sufficient to result in the
sale of such REO Property within the period specified in Section 3.7(c). The
Servicer shall accept the highest bid received from any Person for any
Defaulted Loan or any REO Property in an amount at least equal to the Purchase
Price therefor or, at its option, if it has received no bid at least equal to
the Purchase Price therefor, purchase the Defaulted Loan or REO Property at
the Purchase Price.
In the absence of any such bid or purchase by the Servicer, the
Servicer shall accept the highest bid received from any Person that is
determined by the Servicer to be a fair price for such Defaulted Loan or REO
Property, if the highest bidder is a Person other than an Interested Person,
or is determined to be such a price by the Trustee, if the highest bidder is
an Interested Person. Notwithstanding anything to the contrary herein, neither
the Trustee, in its individual capacity, nor any of its Affiliates may bid for
or purchase any Defaulted Loan or any REO Property pursuant hereto.
The Servicer shall not be obligated by either of the foregoing
paragraphs or otherwise to accept the highest bid if the Servicer determines,
in accordance with the servicing standard stated in Section 3.1, that
rejection of such bid would be in the best interests of the
Certificateholders.
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In addition, the Servicer may accept a lower bid if it determines, in
accordance with the servicing standard stated in Section 3.1, that acceptance
of such bid would be in the best interests of the Certificateholders (for
example, if the prospective buyer making the lower bid is more likely to
perform its obligations, or the terms offered by the prospective buyer making
the lower bid are more favorable). In the event that the Servicer determines
with respect to any REO Property that the bids being made with respect thereto
are not in the best interests of the Certificateholders and that the end of
the period referred to in Section 3.7(c) with respect to such REO Property is
approaching, the Servicer shall seek an extension of such period in the manner
described in Section 3.7(c).
(b) In determining whether any bid received from an Interested Person
represents a fair price for any Defaulted Loan or any REO Property, the
Trustee may conclusively rely on the opinion of an Independent appraiser or
other expert in real estate matters retained by the Trustee the expense of
which shall be an expense of the Trust Fund. In determining whether any bid
constitutes a fair price for any Defaulted Loan or any REO Property, the
Servicer or the Trustee (or, if applicable, such appraiser) shall take into
account, and any appraiser or other expert in real estate matters shall be
instructed to take into account, as applicable, among other factors, the
period and amount of any delinquency on the affected Defaulted Loan, the
physical condition of the related Mortgaged Property or such REO Property, the
state of the local economy and the Trust Fund's obligation to dispose of any
REO Property within the time period specified in Section 3.7(c).
(c) The Servicer shall act on behalf of the Trust Fund in negotiating
and taking any other action necessary or appropriate in connection with the
sale of any Defaulted Loan or REO Property, including the collection of all
amounts payable in connection therewith. Any sale of a Defaulted Loan or any
REO Property shall be without recourse to, or representation or warranty by,
the Trustee, the Depositor, the Servicer or the Trust Fund (except that any
contract of sale and assignment and conveyance documents may contain customary
warranties of title, so long as the only recourse for breach thereof is to the
Trust Fund), and, if consummated in accordance with the terms of this
Agreement, neither the Servicer, the Depositor nor the Trustee shall have any
liability to the Trust Fund or any Certificateholder with respect to the
purchase price therefor accepted by the Servicer or the Trustee.
(d) The proceeds of any sale after deduction of the expenses of such
sale incurred in connection therewith shall be promptly deposited in the
Custodial Account for P&I in accordance with Section 3.2(b).
Section 3.16 Delegation of Duties. In the ordinary course of
business, the Servicer or the Trustee may at any time delegate any duties
hereunder to any Person who agrees to conduct such duties in accordance with
the applicable terms of this Agreement. In case of such delegation, the
Servicer or the Trustee shall supervise, administer, monitor and oversee the
activities of such Person hereunder to insure that such Person performs such
duties in accordance herewith and shall be responsible for the acts and
omissions of such Person to the same extent as it is responsible for its own
actions or omissions hereunder. Any such delegations shall not relieve the
Servicer or the Trustee of its liability and responsibility with respect to
such duties,
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and shall not constitute a resignation within the meaning of Section 6.4
hereof and shall be revocable by any successor Servicer or the Trustee.
Section 3.17 [Reserved].
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Section 3.18 [Reserved].
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Section 3.19 Appointment of a Special Servicer. The Servicer may
enter into a special servicing agreement with an unaffiliated holder of
Subordinate Certificates or a holder of a class of securities representing
interests in such Class of Subordinate Certificates, such agreement to be (i)
substantially in the form of Exhibit R hereto or (ii) subject to each Rating
Agency's acknowledgment that the ratings of the Certificates in effect
immediately prior to the entering into of such agreement would not be
qualified, downgraded or withdrawn and the Certificates would not be placed on
credit review status (except for possible upgrading) as a result of such
agreement. Any such agreement may contain provisions whereby such holder may
instruct the Servicer to commence or delay foreclosure proceedings with
respect to delinquent Loans and may 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.
Section 3.20 Allocation of Realized Losses. Prior to each
Distribution Date, the Servicer shall determine the amount of Realized Losses,
if any. The amount of Realized Losses shall be evidenced by an Officer's
Certificate signed by a Responsible Officer of the Servicer. All Realized
Losses, except for Excess Losses, shall be allocated as follows: (i) for
losses allocable to principal (a) first, to the Subordinate Certificates in
reverse order of seniority until each of their Class Principal Balances have
been reduced to zero and (b) second, to the Senior Certificates, by Pro Rata
Allocation until the Certificate Principal Balances thereof have been reduced
to zero; provided, however, that prior to the Credit Support Depletion Date if
the loss is recognized with respect to (a) a Discount Loan, the Discount
Fraction of such loss shall be allocated to the Class A-P Certificates and the
remainder of such loss will be allocated to the Class A-1 Certificates as
described in clause (b), (b) a Loan in Subgroup 1, the Applicable Fraction
relating to the Class A-1 Certificates of such loss will be allocated to the
Class A-1 Certificates and the remainder of such loss will be allocated as
described above in clause (a), (c) a Loan in Subgroup 2, the Applicable
Fraction relating to the Class A-1 Certificates of such loss will be allocated
to the Class A-1 Certificates and the remainder of such loss will be allocated
to the Class A-2 Certificates, Class R Certificate and Subordinate
Certificates as described above in this clause (i) and (d) a Loan in Subgroup
3, the Applicable Fraction relating to the Class A-3 Certificates of such loss
will be allocated to the Class A-3 Certificates and the remainder of such loss
will be allocated to the Class A-2 Certificates, Class R Certificate and
Subordinate Certificates as described above in this clause (i); and (ii) for
losses allocable to interest (a) first, to the Subordinate Certificates in
reverse order of seniority, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class Principal Balance of such
Certificates and (b) second, to the Senior Certificates thereof, by Pro Rata
Allocation until the Certificate Principal Balances thereof have been reduced
to zero.
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Excess Losses shall be allocated among the Senior Certificates and
the Subordinate Certificates by Pro Rata Allocation.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement (without
regard to this paragraph), if the Aggregate Certificate Principal Balance of
all outstanding Classes of Senior and Subordinate Certificates exceeds the
aggregate principal balance of the Loans, after deduction of (i) all principal
payments due on or before the Cut-Off Date whether or not paid and (ii) all
amounts of principal that have been received or advanced and included in the
Available Distribution Amount, and all losses that have been allocated to the
Senior and Subordinate Certificates, on such Distribution Date or prior
Distribution Dates, including any reductions in the Class Principal Balances
of the Subordinate Certificates as a result of any amounts paid in respect of
Deferred Principal Amounts or Discount Fractional Principal Shortfalls on that
Distribution Date, then such excess will be deemed a principal loss and will
be allocated to the Certificates by Pro Rata Allocation, except that amounts
allocated to the Class A-2 Certificates, Class R Certificate and Subordinate
Certificates will be allocated in inverse order of seniority. In addition, (i)
amounts allocated to the Class A-1 and Class A-3 Certificates will be added to
the respective Deferred Principal Amounts in respect of such Classes and (ii)
amounts allocated to the Class A-P Certificates will be added to the Discount
Fractional Principal Shortfall.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
Section 4.1 Distributions to Certificateholders. (a) The Trustee
shall establish and maintain a separate account as set forth in Article I (the
"Certificate Account"), the purpose of which is to accept deposits from the
Servicer and to make distributions to the Certificateholders of the amounts
set forth in this Section 4.1.
(b) On each Distribution Date, the Trustee or the Paying Agent, if
any, shall (i) withdraw from the Certificate Account the Available
Distribution Amount for such Distribution Date and shall distribute to each
Certificateholder, from the amount so withdrawn and to the extent of the
Available Distribution Amount, such Certificateholder's share (based on the
aggregate Percentage Interests represented by the Certificates of the
applicable Class held by such Certificateholder) of the amounts and in the
order of priority as set forth in the definition of "Certificate Distribution
Amount", and (ii) distribute Excess Liquidation Proceeds to the Class R
Certificateholder, by wire transfer in immediately available funds for the
account of the Certificateholder or by any other means of payment acceptable
to each Certificateholder of record on the immediately preceding Record Date
(other than as provided in Section 9.1 respecting the final distribution) as
specified by each such Certificateholder and at the address of such Holder
appearing in the Certificate Register; provided, that if the Trustee has
appointed a Certificate Administrator, such distributions in (i) and (ii)
above shall be made in accordance with written statements received from the
Certificate Administrator pursuant to Section 4.2.
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(c) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal or allocations of Realized
Losses with respect to Loans made on any Distribution Date shall be binding
upon all Holders of such Certificate and of any Certificate issued upon the
registration of transfer or exchange therefor or in lieu thereof, whether or
not such distribution is noted on such Certificate. The final distribution of
principal of each Certificate (and the final distribution with respect to the
Class R Certificate upon termination of the Trust Fund) shall be payable in
the manner provided above only upon presentation and surrender thereof on or
after the Distribution Date therefor at the office or agency of the Trustee or
Certificate Administrator, if any, specified in the notice delivered pursuant
to Section 4.1(d) or Section 9.1.
(d) Whenever, on the basis of Curtailments, Payoffs and Monthly
Payments on the Loans and Insurance Proceeds and Liquidation Proceeds received
and expected to be received during the applicable Prepayment Period, the
Trustee believes, or the Certificate Administrator, if any, has notified the
Trustee that it believes, that the entire remaining unpaid Class Principal
Balance of any Class of Certificates will become distributable on the next
Distribution Date, the Trustee or the Certificate Administrator, if any,
shall, no later than the Determination Date of the month of such Distribution
Date, mail or cause to be mailed to each Person in whose name a Certificate to
be so retired is registered at the close of business on the Record Date, to
the Underwriters and to each Rating Agency a notice to the effect that:
(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution
will be payable on such Distribution Date, but only upon presentation
and surrender of such Certificate at the office or agency of the
Certificate Registrar maintained for such purpose (the address of
which shall be set forth in such notice), and (B) no interest shall
accrue on such Certificate after such Distribution Date.
Section 4.2 Statements to Certificateholders. (a) Not later than each
Determination Date, the Servicer shall forward to the Trustee or the
Certificate Administrator, if any, the Servicer's Section 3.10 Report setting
forth certain information with respect to the Loans. With each distribution
from the Certificate Account on a Distribution Date, the Trustee or the
Certificate Administrator, if any, shall, based on the information set forth
in the Servicer's Section 3.10 Report, prepare and forward or make available
through the Trustee's or the Certificate Administrator's, as the case may be,
internet website (which initially will be the Certificate Administrator's
internet website located at ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇) to each Certificateholder, a
statement (each a "Certificateholders' Report") setting forth, to the extent
applicable, the amount of the distribution payable to the applicable Class
that represents principal and the amount that represents interest, and the
applicable Class Principal Balance after giving effect to such distribution.
In addition, not later than each Distribution Date, the Certificate
Administrator or Trustee, as applicable, shall forward or make available to
such Certificateholder, the Trustee (if
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the Trustee has appointed a Certificate Administrator) and the Depositor an
additional report which sets forth with respect to the Loans:
(i) The number and aggregate Principal Balance of the Loans
delinquent one, two and three months or more;
(ii) The (A) number and aggregate Principal Balance of Loans
with respect to which foreclosure proceedings have been initiated,
and (B) the number and aggregate book value of Mortgaged Properties
acquired through foreclosure, deed in lieu of foreclosure or other
exercise of rights respecting the Trustee's security interest in the
Loans;
(iii) The aggregate Principal Balance of the Loans as of the
close of business on the last day of the related Prepayment Period;
(iv) The amount of the Servicing Fee retained or withdrawn by
the Servicer from the Certificate Account and the amount of any
Excess Liquidation Proceeds received by the Servicer during the
related Prepayment Period;
(v) The amount of Special Hazard Coverage available to the
Senior Certificates remaining as of the close of business on the
applicable Determination Date;
(vi) The amount of Bankruptcy Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(vii) The amount of Fraud Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(viii) The amount of Realized Losses incurred allocable to the
related Certificates on the related Distribution Date and the
cumulative amount of Realized Losses incurred allocated to such
Certificates since the Cut-Off Date;
(ix) The amount of interest accrued but not paid on the each
Class of Certificates entitled to interest since (a) the prior
Distribution Date and (b) the Closing Date;
(x) The amount of funds advanced by the Servicer on the related
Withdrawal Date; and
(xi) The total amount of Payoffs and Curtailments received
during the related Prepayment Period.
Upon written request by any Certificateholder, the Trustee or the
Certificate Administrator (if so appointed by the Trustee), as soon as
reasonably practicable, shall provide the requesting Certificateholder with
such information as is necessary and appropriate, in
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Trustee's or the Certificate Administrator's sole discretion, for purposes of
satisfying applicable reporting requirements under Rule 144A of the Securities
Act.
(b) Upon written request to the Trustee or Certificate Administrator
(if so appointed by the Trustee) by any Certificateholder who is a Holder
thereof at the time of making such request (an "Eligible Certificateholder"),
the Trustee or the Certificate Administrator, if applicable, shall provide in
electronic format loan by loan data with respect to the payment experience of
the Loans containing at least the fields of information listed on Exhibit E
hereto (based on information provided by the Servicer). In addition, upon the
written request of any Eligible Certificateholder, the Trustee or the
Certificate Administrator shall provide similar loan by loan data with respect
to any prior monthly remittance report to the Certificateholders pursuant to
this Agreement (as and when such information becomes available). The expense
of providing any tape or disk pursuant to this subsection shall be an expense
of the Eligible Certificateholder.
Section 4.3 Advances by the Servicer; Distribution Reports to the
Trustee. To the extent described below, the Servicer is obligated to advance
its own funds to the Certificate Account to cover any shortfall between (i)
payments scheduled to be received in respect of Loans serviced by such
Servicer, and (ii) the amounts actually deposited in the Certificate Account
on account of such payments. The Servicer's obligation to make any Advance or
Advances described in this Section 4.3 is effective only to the extent that
such Advance is, in the good faith judgment of the Servicer, reimbursable from
Insurance Proceeds or Liquidation Proceeds of the related Loans or recoverable
as late Monthly Payments with respect to the related Loans or otherwise.
Prior to the close of business on each Determination Date, the
Servicer shall determine whether or not it will make an Advance on the next
Withdrawal Date and shall furnish a statement to the Certificate
Administrator, if any, the Trustee, the Paying Agent, if any, and to any
Certificateholder requesting the same, setting forth the aggregate amount to
be distributed on the next succeeding Distribution Date on account of
principal and interest in respect of the Loans, stated separately. In the
event that full scheduled amounts of principal and interest in respect of the
related Loans shall not have been received by or on behalf of the Servicer
prior to the Withdrawal Date preceding such Distribution Date and the Servicer
shall have determined that an Advance shall be made in accordance with this
Section 4.3, the Servicer shall so specify and shall specify the aggregate
amount of such Advance.
In the event that the Servicer shall be required to make an Advance,
it shall on the Withdrawal Date either (i) deposit in the Certificate Account
an amount equal to such Advance, (ii) direct the Trustee or the Certificate
Administrator (if so appointed by the Trustee) to make an appropriate entry in
the records of the Certificate Account that funds in such account being held
for future distribution or withdrawal have been, as permitted by this Section
4.3, used by such Servicer to make such Advance, or (iii) make advances in the
form of any combination of (i) and (ii) aggregating the amount of such
Advance. Any funds being held for future distribution to Certificateholders
and so used shall be replaced by the related Servicer by deposit in the
Certificate Account on any future Withdrawal Date to the extent that funds in
the Certificate Account on the related Distribution Date with respect to the
related Loans shall be less than payments to Certificateholders required to be
made on such date with respect to such Loans.
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The Servicer shall be entitled to reimbursement for any Advance as
provided in Section 3.3 of this Agreement.
In the event that the Trustee has appointed a Certificate
Administrator, prior to 5:00 P.M. New York City time on the Withdrawal Date,
the Certificate Administrator shall provide the Trustee with a statement
regarding the amount of principal and interest, the Residual Distribution
Amount and the Excess Liquidation Proceeds to be distributed to each Class of
Certificates on such Distribution Date (such amounts to be determined in
accordance with the definition of "Certificate Distribution Amount", Section
4.1 hereof and other related definitions set forth in Article I hereof).
Section 4.4 Nonrecoverable Advances. Any Advance previously made by
the Servicer with respect to a Loan that the Servicer shall determine in its
good faith judgment not to be ultimately recoverable from Insurance Proceeds
or Liquidation Proceeds or otherwise with respect to such Loan or recoverable
as late Monthly Payments with respect to such Loan shall be a Nonrecoverable
Advance. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any advance would constitute a Nonrecoverable Advance, shall
be evidenced by an Officer's Certificate of the Servicer delivered to the
Trustee on the Determination Date and detailing the reasons for such
determination. Notwithstanding any other provision of this Agreement, any
insurance policy relating to the Loans, or any other agreement relating to the
Loans to which the Depositor or the Servicer is a party, (a) the Servicer
shall not be obligated to, and shall not, make any advance that, after
reasonable inquiry and in its sole discretion, it determines would be a
Nonrecoverable Advance, and (b) the Servicer shall be entitled to
reimbursement for any Nonrecoverable Advance as provided in Section 3.3 of
this Agreement.
Section 4.5 Foreclosure Reports. Each year beginning in 2002 the
Servicer shall make any reports of foreclosures and abandonments of any
Mortgaged Property required by Section 6050J of the Code. In order to
facilitate this reporting process, the Servicer, on or before February 28th of
each year, commencing with 2002, shall provide to the Internal Revenue
Service, the Trustee and the Certificate Administrator, if any, reports
relating to each instance occurring during the previous calendar year in which
the Servicer (i) on behalf of the Trustee acquires an interest in a Mortgaged
Property through foreclosure or other comparable conversion in full or partial
satisfaction of a Loan, or (ii) knows or has reason to know that a Mortgaged
Property has been abandoned. The reports from the Servicer shall be in form
and substance sufficient to meet the reporting requirements imposed by such
Section 6050J.
Section 4.6 Adjustment of Servicing Fees with Respect to Payoffs. The
aggregate amount of the Servicing Fee subject to retention from deposit into
or withdrawal from the Certificate Account by the Servicer, in any month of
distribution shall be decreased by any Compensating Interest due and owing
with respect to any Loan with respect to which a Payoff has occurred in the
related Prepayment Period. The Servicer shall include the amount of any such
Compensating Interest with the deposits into the Certificate Account on the
related Withdrawal Date. Notwithstanding the foregoing, the amount by which
the Servicing Fee may be reduced with respect to the related Prepayment Period
pursuant to this Section 4.6 shall not
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exceed an amount greater than the amount described in clause (i) of the
definition of Compensating Interest for all Loans as to which Payoffs have
occurred and the rights of the Certificateholders to such portion of the
Servicing Fee shall not be cumulative.
Section 4.7 Prohibited Transactions Taxes and Other Taxes.
---------------------------------------------
(a) In the event that any tax (including a tax on "prohibited
transactions" as defined in Section 860F(a)(2) of the Code and including any
and all interest, penalties, fines and additions to tax, as well as any and
all reasonable counsel fees and out-of-pocket expenses incurred in contesting
the imposition of such tax) is imposed on the Trust Fund and is not otherwise
paid pursuant to Section 4.7(b) hereof, the Servicer shall pay such taxes when
and as the same shall be due and payable (but such obligation shall not
prevent the Servicer, the Trustee, the Certificate Administrator, if any, or
any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Servicer from withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings);
provided, that the Servicer shall be entitled to be indemnified for any such
taxes (excluding taxes referred to in Section 4.7(b)) to the extent set forth
in Section 6.3 hereof so long as the Servicer's failure to exercise reasonable
care with respect to the performance of its duties hereunder was not the
primary cause of the imposition of such taxes. If the Servicer is indemnified
for such taxes pursuant to this Section 4.7(a), such amount shall be first
charged against amounts otherwise distributable to the Holders of Component
R-1 of the Class R Certificate (or, if the tax relates to REMIC II, Component
R-2 of the Class R Certificate) on a pro rata basis, then against amounts
otherwise distributable with respect to the REMIC I Regular Interests (or, if
the tax relates to REMIC II, to the Holders of the REMIC II Certificates) on a
pro rata basis. The Trustee is hereby authorized to retain from amounts
otherwise distributable to the Certificateholders sufficient funds to
reimburse the Servicer for the payment of such tax for which the Servicer is
entitled to indemnification.
(b) The Servicer shall pay on written demand, and shall indemnify and
hold harmless the Trust Fund from and against, any and all taxes imposed on
the Trust Fund (including, for this purpose, any and all interest, penalties,
fines and additions to tax, as well as any and all reasonable counsel fees and
out-of-pocket expenses incurred in contesting the imposition of such tax).
Section 4.8 Tax Administration.
------------------
(a) The Trustee is hereby appointed as attorney-in-fact and agent for
the initial Tax Matters Person; provided, that the Trustee may appoint, and
hereby does so appoint, the Certificate Administrator as attorney-in-fact and
agent for the Tax Matters Person. The Trustee may, by written notice delivered
to the Certificate Administrator, revoke the appointment of the Certificate
Administrator as attorney-in-fact and agent for the Tax Matters Person, in
which case the Trustee shall act in such capacity.
(b) In order to enable the Trustee or the Certificate Administrator,
as applicable, to perform its duties as set forth in this Section 4.8 and
Section 3.1(b), the Servicer agrees to
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provide any tax forms, instruments or other documents related thereto, as the
Trustee or the Certificate Administrator, as applicable, may reasonably
request, including, without limitation, any tax forms, instruments or other
documents prepared by the Servicer pursuant to this Section 4.8. In order to
enable the Trustee or the Certificate Administrator, as applicable, to perform
its duties as set forth in this Section 4.8 and Section 3.1(b), the Servicer
shall use its best efforts to cause to be delivered to the Trustee or the
Certificate Administrator, as applicable, within ten (10) days after the
Closing Date all information or data that the Trustee or the Certificate
Administrator, as applicable, 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.
Thereafter, the Servicer shall use its best efforts to provide to the Trustee
or the Certificate Administrator, as applicable, promptly upon request
therefor, any such additional information or data that the Trustee or the
Certificate Administrator, as applicable, may, from time to time, request in
order to enable the Trustee or the Certificate Administrator, as applicable,
to perform its duties as set forth in this Section 4.8 and Section 3.1(b).
Section 4.9 Equal Status of Servicing Fee. The right of the Servicer
to receive its Servicing Fee will be equal and not subordinate to the right of
the Certificateholders to receive principal and interest payments based on
their interests as provided herein. The Servicer's Servicing Fee may be
collected from Monthly Payments as received pursuant to Section 3.2 without
deposit into the Certificate Account, whereas the Certificateholders'
distributions shall be made on a delayed basis as set forth in the terms of
the Certificates.
Section 4.10 Appointment of Paying Agent and Certificate
Administrator. The Trustee may appoint an Eligible Institution to act as a
paying agent (the "Paying Agent") or a certificate administrator (the
"Certificate Administrator"), as the case may be, in order to delegate to such
Eligible Institution any of its duties under this Agreement to administer the
issuance, transfer and exchange of the Certificates, administer payments to
Certificateholders or prepare information related to the Certificates;
provided, that the Trustee shall remain primarily responsible for any duties
so delegated; provided, further, that the Trustee shall receive no additional
compensation in connection with such appointment and delegation.
Initially, LaSalle Bank National Association will be the Certificate
Administrator and Paying Agent. If LaSalle Bank National Association ceases to
serve as Certificate Administrator or Paying Agent, the Trustee shall send
written notice to all Certificateholders (i) indicating that LaSalle Bank
National Association is no longer in such capacity and (ii) setting forth its
replacement, if any, appointed pursuant to this Section 4.10.
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ARTICLE V
THE CERTIFICATES
Section 5.1 The Certificates.
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(a) The Certificates shall be substantially in the forms set forth in
Exhibits A and B attached hereto, and shall be executed by the Trustee,
authenticated by the Trustee (or any duly appointed Authenticating Agent) and
delivered to or upon the order of the Depositor upon receipt by the Trustee of
the documents specified in Section 2.1. The Certificates shall be issuable in
Authorized Denominations evidencing Percentage Interests. Certificates shall
be executed by manual or facsimile signature on behalf of the Trust Fund by
authorized officers of the Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were at the time of execution the
proper officers of the Trustee shall bind the Trust Fund, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of such Certificates. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in
the form provided for herein executed by the Trustee or any Authenticating
Agent by manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication.
(b) The following definitions apply for purposes of this Section 5.1:
"Disqualified Organization" means any Person which is not a Permitted
Transferee, but does not include any "Pass-Through Entity" which owns or holds
a Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary; "Pass-Through
Entity" means any regulated investment company, real estate investment trust,
common trust fund, partnership, trust or estate, and any organization to which
Section 1381 of the Code applies; "Ownership Interest" means, with respect to
any Residual Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the Holder
thereof and any other interest therein whether direct or indirect, legal or
beneficial, as owner or as pledgee; "Transfer" means any direct or indirect
transfer or sale of, or directly or indirectly transferring or selling, any
Ownership Interest in a Residual Certificate; and "Transferee" means any
Person who is acquiring by Transfer any Ownership Interest in a Residual
Certificate.
(c) Restrictions on Transfers of the Residual Certificate to
Disqualified Organizations are set forth in this Section 5.1(c).
(i) 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 to have irrevocably authorized the
Trustee, the Certificate Administrator or the Paying Agent under
clause (iii)(A) below to deliver payments to a Person other than such
Person and to negotiate the terms of any
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mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring
any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee or the
Certificate Registrar if not the same Person as the Trustee of
any change or impending change in its status as a Permitted
Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate to a U.S. Person,
the Trustee or the Certificate Registrar if not the same Person
as the Trustee shall require delivery to it, and shall not
register the Transfer of any Residual Certificate until its
receipt of (1) an affidavit and agreement (a "Transferee
Affidavit and Agreement") attached hereto as Exhibit J from the
proposed Transferee, in form and substance satisfactory to the
Depositor, representing and warranting, among other things,
that it is not a Non-U.S. Person, that such transferee is a
Permitted Transferee, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person
who is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Residual Certificate, it
will endeavor to remain a Permitted Transferee, and that it has
reviewed the provisions of this Section 5.1(c) and agrees to be
bound by them, and (2) a certificate, attached hereto as
Exhibit I, from the Holder wishing to transfer the Residual
Certificate, in form and substance satisfactory to the
Depositor, representing and warranting, among other things,
that no purpose of the proposed Transfer is to allow such
Holder to impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transferee
Affidavit and Agreement by a proposed Transferee under clause
(B) above, if the Trustee or the Certificate Registrar if not
the same Person as the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer
of an Ownership Interest in a Residual Certificate to such
proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate agrees by holding or
acquiring such Ownership Interest (i) to require a Transferee
Affidavit and Agreement from any other Person to whom such
Person attempts to transfer its Ownership Interest and to
provide a certificate to the Trustee or the Certificate
Registrar if not the same Person as the Trustee in the form
attached hereto as Exhibit J; (ii) to obtain the express
written consent of the Depositor prior to any transfer of such
Ownership Interest, which consent may be withheld in the
Depositor's sole discretion; and (iii) to provide a certificate
to the Trustee or the Certificate Registrar if not the same
Person as the Trustee in the form attached hereto as Exhibit I.
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(ii) The Trustee or the Certificate Registrar if not the same
Person as the Trustee shall register the Transfer of any Residual
Certificate only if it shall have received the Transferee Affidavit
and Agreement, a certificate of the Holder requesting such transfer
in the form attached hereto as Exhibit J and all of such other
documents as shall have been reasonably required by the Trustee or
the Certificate Registrar if not the same Person as the Trustee as a
condition to such registration.
(iii) (A) If any Disqualified Organization shall become a
Holder of a Residual Certificate, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. If any
Non-U.S. Person shall become a Holder of a Residual Certificate, then
the last preceding Holder which is a U.S. Person shall be restored,
to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of the
Transfer to such Non-U.S. Person of such Residual Certificate. If a
transfer of a Residual Certificate is disregarded pursuant to the
provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G- 3, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration
of such Transfer of such Residual Certificate. The Trustee, the
Certificate Administrator, the Certificate Registrar and the Paying
Agent shall be under no liability to any Person for any registration
of Transfer of a Residual Certificate that is in fact not permitted
by this Section 5.1(c) or for making any payments due on such
Certificate to the Holder thereof or for taking any other action with
respect to such Holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of the
Residual Certificate in violation of the restrictions in this Section
5.1(c) and to the extent that the retroactive restoration of the
rights of the Holder of such Residual Certificate as described in
clause (iii)(A) above shall be invalid, illegal or unenforceable,
then the Depositor shall have the right, without notice to the Holder
or any prior Holder of such Residual Certificate, to sell such
Residual Certificate to a purchaser selected by the Depositor on such
terms as the Depositor may choose. Such purported Transferee shall
promptly endorse and deliver the Residual Certificate in accordance
with the instructions of the Depositor. Such purchaser may be the
Depositor itself or any affiliate of the Depositor. The proceeds of
such sale, net of the commissions (which may include commissions
payable to the Depositor or its affiliates), expenses and taxes due,
if any, shall be remitted by the Depositor to such purported
Transferee. The terms and conditions of any sale under this clause
(iii)(B) shall be determined in the sole discretion of the Depositor,
and the Depositor shall not be liable to any Person having an
Ownership Interest in the Residual Certificate as a result of its
exercise of such discretion.
(iv) The Depositor, on behalf of the Trustee, shall make
available, upon written request from the Trustee, or the Certificate
Administrator all information necessary to compute any tax imposed
(A) as a result of the Transfer of an Ownership Interest in the
Residual Certificate to any Person who is not a Permitted Transferee,
including the
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information regarding "excess inclusions" of such Residual
Certificate required to be provided to the Internal Revenue Service
and certain Persons as described in Treasury Regulation Section
1.860D-1(b)(5), and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund,
partnership, trust, estate or organizations described in Section 1381
of the Code having as among its record holders at any time any Person
who is not a Permitted Transferee. Reasonable compensation for
providing such information may be required by the Depositor from such
Person.
(v) The provisions of this Section 5.1 set forth prior to this
Section 5.1(c)(v) may be modified, added to or eliminated, provided,
that there shall have been delivered to the Trustee and the
Certificate Administrator the following:
(A) written notification from each Rating Agency to
the effect that the modification, addition to or elimination of
such provisions will not cause such Rating Agency to downgrade
its then-current Ratings of the Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Depositor (as evidenced by a certificate of
the Depositor), to the effect that such modification, addition
to or absence of such provisions will not cause the Trust Fund
to cease to qualify as a REMIC and will not create a risk that
(1) the Trust Fund may be subject to an entity-level tax caused
by the Transfer of any Residual Certificate to a Person which
is not a Permitted Transferee or (2) a Certificateholder or
another Person will be subject to a REMIC-related tax caused by
the Transfer of a Residual Certificate to a Person which is not
a Permitted Transferee.
(vi) The following legend shall appear on all Residual
Certificates:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED
TRANSFEREE PROVIDES A TRANSFEREE AFFIDAVIT AND
AGREEMENT TO THE DEPOSITOR, THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT
EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN
SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
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ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO
ENABLE THE TRANSFEROR TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE
CERTAIN REPRESENTATIONS AS TO THE FINANCIAL CONDITION
OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
THIS CERTIFICATE. EACH HOLDER OF THE CLASS R
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE
DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
(vii) The Holder of the Class R Certificate issued hereunder,
while not a Disqualified Organization, is the Tax Matters Person.
(d) (i) No purchase or transfer of a Senior Certificate or a Senior
Subordinate Certificate or any interest therein shall be made by or to any
"employee benefit plan" subject to ERISA or any "plan" described by Section
4975(e)(1) of the Code, or any entity deemed to hold plan assets of any of the
foregoing by reason of a plan's investment in such entity (each, a "Plan")
unless such Plan qualifies as an accredited investor as defined in Rule
501(a)(1) of Regulation D under the Securities Act and either (1) at the time
of such transfer, the Certificates are rated in one of the top four rating
categories by at least one Rating Agency, or (2) the purchaser is an insurance
company general account that is eligible for, and satisfies all of the
requirements of, Sections I and III of Prohibited Transaction Class Exemption
95-60 ("PTCE 95- 60"). Each Person who acquires a Senior Certificate or a
Senior Subordinate Certificate shall be deemed to certify that it meets the
foregoing conditions, and that it will not transfer such Certificate in
violation of the foregoing.
(ii) No purchase or transfer of a Junior Subordinate
Certificate shall be made by or to a Plan unless such purchaser or
transferee is an "insurance company general account" (within the
meaning of PTCE 95-60) and is eligible for, and satisfies all of the
requirements for exemptive relief under Sections I and III of PTCE
95-60. Each Person who acquires a Junior Subordinate Certificate or
any interest therein shall be deemed to certify and shall be required
by the Certificate Registrar to provide an Officer's Certificate
signed by a Responsible Officer of such Person, which Officer's
Certificate shall not be an expense of the Trustee, the Certificate
Administrator, if any, the Certificate Registrar or the Depositor)
that it meets the foregoing conditions, and that it will not transfer
such Certificate in violation of the foregoing.
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(e) No transfer, sale, pledge or other disposition of a Junior
Subordinate Certificate shall be made unless such transfer, sale, pledge or
other disposition is made in accordance with this Section 5.1(e) or Section
5.1(f). Each Person who, at any time, acquires any ownership interest in any
Junior Subordinate Certificate shall be deemed by the acceptance or
acquisition of such ownership interest to have agreed to be bound by the
following provisions of this Section 5.1(e) and Section 5.1(f), as applicable.
No transfer of a Junior Subordinate Certificate shall be deemed to be made in
accordance with this Section 5.1(e) unless such transfer is made pursuant to
an effective registration statement under the Securities Act or unless the
Trustee or the Certificate Registrar, if not the same Person as the Trustee,
is provided with the certificates and an Opinion of Counsel, if required, on
which the Trustee and the Certificate Registrar may conclusively rely, which
establishes or establish to the Trustee's or the Certificate Registrar's, as
applicable, satisfaction that such transfer is exempt from the registration
requirements under the Securities Act, as follows: In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act,
the Trustee or the Certificate Registrar, if not the same Person as the
Trustee, shall require, in order to assure compliance with the Securities Act,
that the Certificateholder desiring to effect such transfer certify to the
Trustee and the Certificate Registrar in writing, in substantially the form
attached hereto as Exhibit F, the facts surrounding the transfer, with such
modifications to such Exhibit F as may be appropriate to reflect the actual
facts of the proposed transfer, and that the Certificateholder's proposed
transferee certify to the Trustee and the Certificate Registrar in writing, in
substantially the form attached hereto as Exhibit G, the facts surrounding the
transfer, with such modifications to such Exhibit G as may be appropriate to
reflect the actual facts of the proposed transfer. If such certificate of the
proposed transferee does not contain substantially the substance of Exhibit G,
the Trustee or the Certificate Registrar, if not the same Person as the
Trustee, shall require an Opinion of Counsel satisfactory to it that such
transfer may be made without registration, which Opinion of Counsel shall not
be obtained at the expense of the Trustee, the Certificate Administrator, the
Certificate Registrar, the Trust Fund or the Depositor. Such Opinion of
Counsel shall allow for the forwarding, and the Trustee shall forward, a copy
thereof to each Rating Agency. Notwithstanding the foregoing, any Class of
Junior Subordinate Certificates may be transferred, sold, pledged or otherwise
disposed of in accordance with the requirements set forth in Section 5.1(f).
(f) Transfers of the Junior Subordinate Certificates may be made in
accordance with this Section 5.1(f). To effectuate a Certificate transfer in
accordance with this Section 5.1(f), the proposed transferee of such
Certificate must provide the Trustee, the Certificate Registrar and the
Depositor with an investment letter substantially in the form of Exhibit L
attached hereto, which investment letter shall not be an expense of the
Trustee, the Certificate Administrator, the Certificate Registrar or the
Depositor, and which investment letter states that, among other things, such
transferee (i) is a "qualified institutional buyer" as defined under Rule
144A, acting for its own account or the accounts of other "qualified
institutional buyers" as defined under Rule 144A, and (ii) is aware that the
proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act provided by Rule 144A. Notwithstanding
the foregoing, the proposed transferee of such Certificate shall not be
required to provide the Trustee, the Certificate Registrar or the Depositor
with Annex 1 or Annex 2 to the form of Exhibit L attached hereto if the
Depositor so consents prior to each such transfer. Such transfers shall be
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deemed to have complied with the requirements of this Section 5.1(f). The
Holder of a Certificate desiring to effect such transfer does hereby agree to
indemnify the Trustee, the Certificate Administrator, if any, the Depositor,
and the Certificate Registrar against any liability that may result if
transfer is not made in accordance with this Agreement.
(g) None of the Trustee, the Certificate Administrator, the
Certificate Registrar or the Paying Agent shall have any liability to the
Trust Fund arising from a registration or transfer of a Certificate in
reliance upon a certification, Officer's Certificate, affidavit, ruling or
Opinion of Counsel described in this Section 5.1.
Section 5.2 Certificates Issuable in Classes; Distributions of
Principal and Interest; Authorized Denominations. The aggregate principal
amount of Certificates that may be authenticated and delivered under this
Agreement is limited to the aggregate Principal Balance of the Loans as of the
Cut-Off Date, as specified in the Preliminary Statement to this Agreement,
except for Certificates authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Certificates pursuant to
Section 5.3. Such aggregate principal amount shall be allocated among one or
more Classes having designations, types of interests, initial per annum
Remittance Rates, initial Class Principal Balances and last scheduled
Distribution Dates as specified in the Preliminary Statement to this
Agreement. The aggregate Percentage Interest of each Class of Certificates of
which the Class Principal Balance equals zero as of the Cut-Off Date that may
be authenticated and delivered under this Agreement is limited to 100%.
Certificates shall be issued in Authorized Denominations.
Section 5.3 Registration of Transfer and Exchange of Certificates.
The Trustee shall cause to be maintained at one of its offices or at its
designated Certificate Registrar, a Certificate Register in which there shall
be recorded the name and address of each Certificateholder. Subject to such
reasonable rules and regulations as the Trustee may prescribe, the Certificate
Register shall be amended from time to time by the Trustee or its agent to
reflect notice of any changes received by the Trustee or its agent pursuant to
Section 10.5. The Trustee hereby appoints LaSalle Bank National Association as
the initial Certificate Registrar. The Trustee may appoint an Eligible
Institution to act as its agent in order to delegate to such Eligible
Institution its duties as Certificate Registrar under this Agreement.
Upon surrender for registration of transfer of any Certificate to the
Trustee at the office of First Trust of New York, National Association, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
or such other address or agency as may hereafter be provided to the
Certificate Administrator, if any, and the Servicer in writing by the Trustee,
the Trustee shall execute, and the Trustee or any Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of Authorized Denominations of like
Percentage Interest. At the option of the Certificateholders, Certificates may
be exchanged for other Certificates in Authorized Denominations of like
Percentage Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute, and the Trustee, or any Authenticating
Agent, shall authenticate and deliver, the Certificates which the
Certificateholder making the exchange is entitled to receive. Every
Certificate
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presented or surrendered for transfer shall (if so required by the Trustee or
any Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee or any
Authenticating Agent and duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing.
A reasonable service charge may be made for any such exchange or
transfer of Certificates, and the Trustee or an Authenticating Agent may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any exchange or transfer of
Certificates.
All Certificates surrendered for exchange or transfer shall be
canceled by the Trustee or any Authenticating Agent.
Section 5.4 Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate is surrendered to the Trustee or any Authenticating
Agent, or (ii) the Trustee or any Authenticating Agent receives evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
there is delivered to the Trustee or any Authenticating Agent such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Trustee or any Authenticating Agent that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Trustee or any Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Percentage Interest. Upon the
issuance of any new Certificate under this Section 5.4, the Trustee or any
Authenticating Agent 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 or any
Authenticating Agent) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.4 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or
not the lost or stolen Certificate shall be found at any time.
Section 5.5 Persons Deemed Owners. The Depositor, the Certificate
Administrator, the Servicer, the Trustee and any agent of any of them may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to
Section 4.1 and for all other purposes whatsoever, and neither the Depositor,
the Certificate Administrator, if any, the Servicer, the Trustee, the
Certificate Registrar nor any agent of the Depositor, the Certificate
Administrator, if any, the Servicer or the Trustee shall be affected by notice
to the contrary.
Section 5.6 Temporary Certificates. Upon the initial issuance of the
Certificates, the Trustee may execute, and the Trustee or any Authenticating
Agent shall authenticate and deliver, temporary Certificates which are
printed, lithographed, typewritten or otherwise produced, in any Authorized
Denomination, of the tenor of the definitive Certificates in lieu of which
they are issued and with such variations in form from the forms of the
Certificates set forth as Exhibits A and B hereto as the Trustee's officers
executing such Certificates may determine, as evidenced by their execution of
the Certificates. Notwithstanding the foregoing, the Certificates may remain
in the form set forth in this Section.
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If temporary Certificates are issued, the Trustee shall cause
definitive Certificates to be prepared within ten Business Days of the Closing
Date or as soon as practicable thereafter. After preparation of definitive
Certificates, the temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the office or
agency of the Trustee to be maintained as provided in Section 5.10 hereof,
without charge to the Holder. Any tax or governmental charge that may be
imposed in connection with any such exchange shall be borne by the Depositor.
Upon surrender for cancellation of any one or more temporary Certificates, the
Trustee shall execute and the Trustee or any Authenticating Agent shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Certificates of Authorized Denominations. Until so exchanged, the
temporary Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Certificates.
Section 5.7 Book-Entry for Book-Entry Certificates. Notwithstanding
the foregoing, the Book-Entry Certificates, upon original issuance, shall be
issued in the form of one or more typewritten Certificates of Authorized
Denomination representing the Book-Entry Certificates, to be delivered to DTC,
the initial Clearing Agency, by, or on behalf of, the Depositor. The Book-
Entry Certificates shall initially be registered on the Certificate Register
in the name of Cede & Co., the nominee of DTC, as the initial Clearing Agency,
and no Beneficial Holder shall receive a definitive certificate representing
such Beneficial Holder's interest in any Class of Book-Entry Certificate,
except as provided above and in Section 5.9. Each Book-Entry Certificate shall
bear the following legend:
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to
the Trustee or its agent for registration of transfer, exchange, or
payment, and any Certificate issued is registered in the name of Cede
& Co. or such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Unless and until definitive, fully registered Book-Entry Certificates (the
"Definitive Certificates") have been issued to the Beneficial Holders pursuant
to Section 5.9:
(a) the provisions of this Section 5.7 shall be in full force and
effect with respect to the Book-Entry Certificates;
(b) the Certificate Administrator, if any, and the Trustee may
deal with the Clearing Agency for all purposes with respect to the
Book-Entry Certificates (including the making of distributions on the
Book-Entry Certificates) as the sole Certificateholder;
(c) to the extent that the provisions of this Section 5.7
conflict with any other provisions of this Agreement, the provisions
of this Section 5.7 shall control; and
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(d) the rights of the Beneficial Holders shall be exercised
only through the Clearing Agency and the DTC Participants and shall
be limited to those established by law and agreements between such
Beneficial Holders and the Clearing Agency and/or the DTC
Participants. Pursuant to the Depositary Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.9, the
initial Clearing Agency will make book-entry transfers among the DTC
Participants and receive and transmit distributions of principal and
interest on the related Class of Book-Entry Certificates to such DTC
Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Book-Entry Certificates evidencing a specified Percentage Interest, such
direction or consent may be given by the Clearing Agency at the direction of
Beneficial Holders owning Book-Entry Certificates evidencing the requisite
Percentage Interest represented by the Book-Entry Certificates. The Clearing
Agency may take conflicting actions with respect to the Book-Entry
Certificates to the extent that such actions are taken on behalf of the
Beneficial Holders.
Section 5.8 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 5.9, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices
and communications to the related DTC Participants in accordance with its
applicable rules, regulations and procedures.
Section 5.9 Definitive Certificates. If (a) the Clearing Agency
notifies the Certificate Administrator, if any, or the Trustee that it is no
longer willing or able to discharge properly its responsibilities under the
Depositary Agreement with respect to the Book-Entry Certificates and the
Trustee or the Certificate Administrator is unable to locate a qualified
successor, (b) the Depositor, at its option, advises the Certificate
Administrator, if any, or the Trustee in writing that it elects to terminate
the book-entry system with respect to the Book-Entry Certificates through the
Clearing Agency or (c) after the occurrence of an Event of Default,
Certificateholders holding Book-Entry Certificates evidencing Percentage
Interests aggregating not less than 66% of the aggregate Class Principal
Balance of such Certificates advise the Certificate Administrator, if any, or
the Trustee and the Clearing Agency through DTC Participants in writing that
the continuation of a book-entry system with respect to the Book-Entry
Certificates through the Clearing Agency is no longer in the best interests of
the Certificateholders with respect to such Certificates, the Trustee shall
notify or cause to be notified all Certificateholders of Book-Entry
Certificates of the occurrence of any such event and of the availability of
Definitive Certificates. Upon surrender to the Trustee of the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Trustee shall execute and the
Trustee or any Authenticating Agent shall authenticate and deliver the
Definitive Certificates. Neither the Depositor, the Certificate Administrator,
if any, the Authenticating Agent nor the Trustee shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates for all of the Certificates all references herein to obligations
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imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by the Trustee, the Certificate Administrator, if
any, and the Trustee, the Certificate Administrator, the Certificate Registrar
and the Paying Agent shall recognize the Holders of Definitive Certificates as
Certificateholders hereunder.
Section 5.10 Office for Transfer of Certificates. The Trustee shall
maintain in New York, New York, an office or agency where Certificates may be
surrendered for registration of transfer or exchange. First Trust of New York,
National Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, is initially designated for said purposes. The
Trustee will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.1 Liability of the Depositor and the Servicer. The
Depositor and the Servicer shall each be liable in accordance herewith only to
the extent of the obligations specifically imposed by this Agreement and
undertaken hereunder by the Depositor and the Servicer herein.
Section 6.2 Merger or Consolidation of the Depositor or the Servicer.
Subject to the following paragraph, the Depositor and the Servicer each will
keep in full effect its existence, rights and franchises as corporations, each
under the laws of the jurisdiction of its incorporation, and will 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, the Certificates or any of
the Loans and to perform its respective duties under this Agreement.
The Depositor or the Servicer may be merged or consolidated with or
into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or Servicer shall be a party, or any Person succeeding to
the business of the Depositor or Servicer, shall be the successor of the
Depositor or Servicer 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.
Section 6.3 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or agents
of the Servicer shall be under any liability to the Trust Fund or 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 any
director, officer, employee or agent of the Servicer against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder, nor shall this provision
protect the Servicer against any liability that would otherwise be imposed by
reason of negligence in the performance of
79
duties hereunder. The Servicer and any director, officer, employee or agent of
the 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 Servicer and any director, officer, employee or agent of the
Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense, in the case of the Servicer and any director, officer, employee or
agent of the Servicer, 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 or, in the case of the
Servicer, as Servicer, incurred by reason of negligence in the performance of
any duties hereunder. The Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its duties
to service the Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability; provided, however, that
the Servicer may in its discretion undertake any such action which it may deem
necessary or desirable in respect of this Agreement and the rights and duties
of the parties hereto and the interests of 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 Servicer shall be entitled to be reimbursed therefor out of the
Custodial Account for P&I as provided by Section 3.3.
Section 6.4 Servicer Not to Resign. The Servicer shall not resign
from the obligations and duties hereby imposed on it, except upon
determination that its duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with
any other activities carried on by it, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer
at the date of this Agreement. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee. The Servicer shall notify each Rating
Agency of any such resignation. No such resignation shall become effective
until a successor servicer shall have assumed the Servicer's responsibilities
and obligations in accordance with Section 7.5 hereof.
Notwithstanding the limitations stated above, the Servicer may
transfer its obligations, duties and rights hereunder without the consent of
the Certificateholders, provided, that (i) the Servicer obtains the prior
written consent of each Rating Agency, (ii) the transferee is a FNMA- or
FHLMC-approved servicer having a net worth of not less than $15,000,000, (iii)
the successor servicer assumes all of the Servicer's responsibilities and
obligations in accordance with Section 7.5 hereof, and (iv) the then-current
rating of the Class A Certificates will not be reduced as a result of such
transfer, and (v) the successor servicer has, in the reasonable opinion of the
Trustee, the qualifications, resources and experience to properly carry out,
observe and perform the duties, obligations and responsibilities of Servicer
hereunder; provided, that the foregoing clause (v) is intended solely for the
benefit of (and may be exercised or waived at the sole discretion of) the
Trustee, to enable the Trustee to assure itself that any successor Servicer
has such acceptable qualifications, resources and experience, and such clause
(v) is not intended to be for the benefit of, and shall not be relied upon or
enforced by, any Certificateholder, and
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provided, further, that any consent to such transfer will not be unreasonably
withheld by the Trustee.
ARTICLE VII
DEFAULT
Section 7.1 Events of Default. In case one or more of the following
Events of Default by the Servicer shall occur and be continuing, that is to
say:
(i) any failure by the Servicer to distribute or cause to be
distributed to the Trustee or its delegate on the Withdrawal Date any
payment required to be made to the Trustee under the terms of this
Agreement;
(ii) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Servicer in the Certificates or in this
Agreement which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by the Trustee,
or to the Servicer and the Trustee by the Holders of Certificates
evidencing, in aggregate, not less than 25% of the Trust Fund or 51%
of the aggregate Percentage Interests of any Class of Certificates;
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of
a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of
60 days;
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator or liquidating committee in any
insolvency, readjustment of debt marshaling of assets and
liabilities, voluntary liquidation or similar proceedings of or
relating to the Servicer or of or relating to all or substantially
all of its property;
(v) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations; or
(vi) any failure of the Servicer to make any Advance required
to be made from its own funds pursuant to Section 4.3 which continues
unremedied for a period of one Business Day after the date upon which
such Advance was to have been made;
then, if an Event of Default described in clauses (i)-(v) of this Section 7.1
shall occur, and in each and every such case, subject to applicable law, so
long as an Event of Default shall not have been
81
remedied, either the Trustee or the Holders of Certificates evidencing, in
aggregate, not less than 25% of the Trust Fund or 51% of the aggregate
Percentage Interests of any Class of Certificates by notice in writing to the
Servicer (and to the Trustee if given by the Certificateholders) may terminate
all of the rights and obligations of the Servicer under this Agreement, but
without prejudice to any rights it may have to reimbursement of expenses,
Advances and other advances of its own funds as Servicer to the extent
permitted by this Agreement, other than the Depositor's (or its successors')
obligation to repurchase any Loans pursuant to Section 2.2 or 2.3 shall
survive any such termination. If an Event of Default described in clause (vi)
hereof shall occur, the Trustee shall, by notice in writing to the Servicer,
which shall be telecopied to the Servicer, immediately terminate all of the
rights and obligations of the Servicer, under this Agreement and in and to the
Loans and the proceeds thereof. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Certificates or the Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section
7.1 (subject to the provisions of Section 7.5); and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the 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 Loans and
related documents or otherwise at the expense of the Servicer. The Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder and shall promptly provide
the Trustee all documents and records whether in written or electronic form
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Trustee of this Agreement
all amounts which then have been or should have been deposited in the
Custodial Account for P&I by the Servicer or which are thereafter received
with respect to the Loans as well as any escrowed funds held by it or in
connection with its servicing activities hereunder. The Servicer and the
Trustee shall give each Rating Agency notice of any Event of Default.
Section 7.2 Other Remedies of Trustee. During the continuance of any
Event of Default, so long as such Event of Default shall not have been
remedied, the Trustee, in addition to the rights specified in Section 7.1,
shall have the right, in its own name as trustee of an express trust, to take
all actions now or hereafter existing at law, in equity or by statute to
enforce its rights and remedies, and to protect the interests, and enforce the
rights and remedies, of the Certificateholders (including the institution and
prosecution of all judicial, administrative and other proceedings and the
filing of proofs of claim and debt in connection therewith). Except as
otherwise expressly provided in this Agreement, no remedy provided for by this
Agreement shall be exclusive of any other remedy, and each and every remedy
shall be cumulative and in addition to any other remedy and no delay or
omission to exercise any right or remedy shall impair any such right or remedy
or shall be deemed to be a waiver of any Event of Default.
Section 7.3 Directions by Certificateholders and Duties of Trustee
During Event of Default. During the continuance of any Event of Default,
Holders of Certificates evidencing, in aggregate, not less than 25% of the
Trust Fund or 51% of the aggregate Percentage Interests of any Class of
Certificates may direct 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
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under this Agreement; provided, however, that the Trustee shall be under no
obligation to pursue any such remedy, or to exercise any of the trusts or
powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder
or in relation hereto and (ii) the terminating of the Servicer or any
successor servicer from its rights and duties as servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; and, provided, further, that, subject to the provisions of
Section 8.1, the Trustee shall have the right to decline to follow any such
direction if the Trustee, in accordance with an Opinion of Counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith determines that the action or proceeding so directed
would involve it in personal liability or be unjustly prejudicial to the
non-assenting Certificateholders or if the Trustee has received contrary
directions pursuant to this Section 7.3.
Section 7.4 Action upon Certain Failures of Servicer and upon Event
of Default. In the event that the Trustee shall have knowledge of any failure
of the Servicer specified in Section 7.1(i) or (ii) which would become an
Event of Default upon the Servicer's failure to remedy the same after notice,
the Trustee shall give notice thereof to the Servicer. In the event that the
Trustee shall have knowledge of an Event of Default, the Trustee shall give
prompt written notice thereof to the Certificateholders and to each Rating
Agency. For all purposes of this Agreement, in the absence of actual knowledge
by a Responsible Officer of the Trustee, the Trustee shall not be deemed to
have knowledge of any failure of the Servicer as specified in Section 7.1(i)
and (ii) or any Event of Default unless notified thereof in writing by the
Servicer or by a Certificateholder.
Section 7.5 Appointment of Successor Servicer.
---------------------------------
(a) When the Servicer receives a notice of termination pursuant to
Section 7.1 or the Trustee receives the resignation of the Servicer evidenced
by an Opinion of Counsel pursuant to Section 6.4, the Trustee shall become the
successor in all respects to the Servicer in its capacity as Servicer under
this Agreement and the transactions set forth or provided for herein,
provided, however, that the Trustee's obligation to make any Advances shall be
no greater than set forth in Section 4.3 of this Agreement, and the Trustee
shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof and in its capacity as such
successor shall have the same limitation of liability herein granted to the
Servicer and provided, further, that the Trustee shall not be required to make
an Advance from its own funds if such Advance would be prohibited by law. As
compensation therefor, the Trustee shall be entitled to receive monthly an
amount not to exceed the Servicing Fee as agreed by the Trustee and the
Servicer, together with such other servicing compensation in the form of
assumption fees, late charges, prepayment fees or otherwise provided in
Section 3.9. If the agreed amount is less than the Servicing Fee, the excess
shall be paid to the Class R Certificateholder. If the Trustee and the
Servicer shall not agree on the amount of such compensation, the Trustee shall
solicit bids for a successor servicer as described in Section 7.5(b),
provided, however, if no successor servicer is obtained through the bidding
process, the Trustee may act as such, or may pursuant to Section 7.5(b)
appoint a
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successor servicer to act as such, for the Servicing Fee together with such
other servicing compensation as provided in Section 3.9. In no event shall the
Trustee's assumption of or succession to the obligations of the Servicer make
the Trustee liable for any actions or omissions of the Servicer in its
capacity as Servicer.
(b) Notwithstanding the above, the Trustee may and shall, if it is
unable (or unwilling due to disagreement on compensation as provided in
Section 7.5 (a)) to act as Servicer, appoint, or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution,
bank or mortgage servicing institution which is an approved FNMA or FHLMC
servicer having a net worth of not less than $15,000,000 and meeting such
other standards as are set forth in Section 6.4 hereof for a successor to the
Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder (except the
repurchase obligations set forth in Sections 2.2 and 2.3 hereof, which shall
remain obligations of the Depositor); provided, however, that until such
appointment and assumption, the Trustee will continue to perform the servicing
obligations pursuant to this Agreement (and until such time shall be entitled
to receive the Servicing Fees pursuant to Section 3.9); provided, further,
that prior to the appointment of any successor servicer, the Rating Agencies
confirm that the appointment of such successor servicer would not result in
the downgrade of the Rating assigned to any Class of Certificates. The
compensation of any successor servicer so appointed shall be equal to the
Servicing Fees specified in Section 3.9 together with such other compensation
as is provided in said Section 3.9. In the event the Trustee is required to
solicit bids as provided above, the Trustee shall solicit, by public
announcement, bids from housing and home finance institutions, banks and
mortgage servicing institutions acceptable to the Trustee and meeting the
qualifications set forth above in this Section 7.5(b) for the purchase of the
servicing functions. Such public announcement shall specify that the successor
servicer shall be entitled to the full amount of the Servicing Fee on the
aggregate unpaid principal balance of the Loans as servicing compensation for
servicing the Loans, together with the other servicing compensation in the
form of assumption fees, late payment charges, prepayment fees or otherwise as
provided in Section 3.9. Within 45 days after any such public announcement,
the Trustee shall negotiate and effect the sale, transfer and assignment of
the servicing rights and responsibilities hereunder (except the repurchase
obligations set forth in Sections 2.2 and 2.3 hereof, which shall remain
obligations of the Depositor) to the qualified party submitting the highest
qualifying bid. The Trustee shall deduct all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities hereunder from any sum received by the Trustee from the
successor to the Servicer in respect of such sale, transfer and assignment.
After such deductions, the remainder of such sum shall be paid by the Trustee
to the Class R Certificateholder at the time of such sale, transfer and
assignment to the Servicer's successor.
(c) The Servicer agrees to cooperate with the Trustee and any
successor servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Trustee
or such successor servicer, as applicable, all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Trustee or such successor
servicer, as applicable, all amounts which then have been or should have been
deposited in the Custodial Account for P&I by the
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Servicer or which are thereafter received with respect to the Loans. Neither
the Trustee nor any other successor 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 caused by the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it.
Section 7.6 Notification to Certificateholders. Upon any termination
of the Servicer or appointment of a successor to the Servicer, in each case as
provided herein, the Trustee shall as soon as practicable give written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register and each Rating Agency.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has
occurred (which has not been cured), the Trustee, subject to the provisions of
Sections 7.1, 7.3, 7.4 and 7.5, 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. Any permissive
right of the Trustee enumerated in this Agreement shall not be construed as a
duty.
Subject to Sections 8.2(i), 8.3 and 8.4, the Trustee, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Trustee which 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 resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by any party hereunder.
If any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Trustee shall take action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's reasonable satisfaction, the Trustee will provide
notice thereof to the Certificateholders and each Rating Agency.
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 or in the event the Trustee is acting as
successor servicer pursuant to Section 7.5, to the standard imposed on the
Servicer pursuant to Section 6.3 of this Agreement; provided, however, that:
(i) Prior to the occurrence of an Event of Default and after
the curing of all such Events of Default which may have occurred, 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
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set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee and, in the
absence of bad faith on the part of the Trustee, 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;
(ii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with this Agreement or at the direction of
Certificateholders holding Certificates which have an aggregate
Certificate Principal Balance aggregating not less than 25% of the
aggregate Certificate Principal Balance of all Certificates relating
to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising or omitting to
exercise any trust or power conferred upon the Trustee, under this
Agreement;
(iii) The Trustee shall not be liable in its individual
capacity for any error of judgment made in good faith by any
Responsible Officer, unless it shall be proved that the Trustee or
such Responsible Officer was negligent in ascertaining the pertinent
facts;
(iv) The Trustee shall not be liable for any act or omission of
the Depositor or the Servicer (except for its own acts or omissions
as Servicer hereunder) or for any but its own acts or omissions;
(v) The Trustee shall not be deemed to take notice or be deemed
to have knowledge of any matter, including without limitation any
default or Event of Default, unless written notice thereof, referring
to the Certificates, the Depositor, the Trust Fund or this Agreement
is received by a Responsible Officer of the Trustee at its Corporate
Trust Office; and
(vi) Subject to the other provisions of this Agreement and
without limiting the generality of this Section 8.1, the Trustee
shall have no duty (A) to see to any recording, filing, or depositing
of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or
filing or depositing or to any rerecording, refiling or redepositing
of any thereof, (B) to see any insurance, (C) to see to the payment
or discharge of any tax, assessment, or other governmental charge or
any lien or encumbrance of any kind owing with respect to, assessed
or levied against, any part of the Trust Fund other than from funds
available in the Certificate Account, and (D) to confirm or verify
the contents of any reports or certificates of the Servicer delivered
to the Trustee pursuant to this Agreement believed by the Trustee to
be genuine and to have been signed or presented by the proper party
or parties.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties as Trustee hereunder or in the
exercise of any of its rights or powers if there is reasonable ground for
believing that repayment of such funds or adequate indemnity against such risk
or liability is
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not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
Section 8.2 Certain Matters Affecting Trustee. Except as otherwise
provided in Section 8.1:
(i) Before acting or refraining from acting the Trustee may
request or require an Officer's Certificate; the Trustee may rely and
shall be protected in acting or refraining from acting upon any
resolution, Officer's Certificate, opinion of counsel, 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;
(ii) The Trustee may consult with counsel, and any advice or
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 advice or
Opinion of Counsel;
(iii) The Trustee shall not be personally 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 right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act;
(v) The Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the
powers granted hereunder; and
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, attorneys or custodians, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by the Trustee with care. Any
such agents, attorneys or custodians shall be entitled to all
indemnities and protection afforded to the Trustee. Any designee of
the Trustee shall be considered its "agent" hereunder whether
performing it as an independent contractor or otherwise.
Section 8.3 Trustee Not Required to Make Investigation. Prior to the
occurrence of an Event of Default hereunder and after the curing of all Events
of Default which may have occurred, the Trustee shall not be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument,
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opinion, report, notice, request, consent, order, approval, bond, Mortgage,
Mortgage Note or other paper or document, unless requested in writing so to do
by Holders of Certificates having a Percentage Interest not less than 51% of
the Trust Fund; provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it
by the terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to such proceeding. The
reasonable expense of every such examination shall be paid by the Depositor
or, if paid by the Trustee, shall be repaid by the Depositor upon demand.
Section 8.4 Trustee Not Liable for Certificates or Loans. The
recitals contained herein and in the Certificates (other than the certificate
of authentication on the Certificates) shall be taken as the statements of the
Depositor, and the Trustee assumes no responsibility for the correctness of
the same. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Loan or related document. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates or for the use or application of any funds paid to the
Servicer in respect of the Loans or deposited in or withdrawn from the
Custodial Account for P&I by the Servicer or for investment of any such
amounts. The Trustee shall not be responsible for the legality or validity of
this Agreement or the validity, priority, perfection or sufficiency of the
security for the Certificates issued or intended to be issued hereunder. The
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
record this Agreement.
Neither the Trustee nor any of the directors, officers, employees or
agents of the Trustee shall be under any liability to the Trust Fund or 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
while an Event of Default exists; provided, however, that this provision shall
not protect the Trustee or any such person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties. The Trustee and any director, officer, employee
or agent of the Trustee shall be indemnified by the Depositor and held
harmless against any loss, liability or expense, including reasonable
attorneys' fees, incurred in connection with or related to the Trustee's
performance of its powers and duties under this Agreement (including, without
limitation, performance under Section 8.1 hereof), or any action relating to
this Agreement or the Certificates, or the performance of the Trustee's duties
hereunder, other than any loss, liability or expense incurred by any such
Person by reason of willful misfeasance, bad faith or negligence in the
performance of duties. Any such losses, liabilities and expenses resulting
therefrom shall be losses, liabilities and expenses of the Depositor. The
indemnification provided hereunder shall survive termination of this
Agreement.
Section 8.5 Trustee May Own Certificates. The Trustee and any
Affiliate or agent of the Trustee in its individual or any other capacity may
become the owner of or a pledgee of the Certificates with the same rights it
would have if it were not Trustee or such agent, and may otherwise deal with
the parties hereto.
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Section 8.6 Servicer to Pay Trustee's Fees and Expenses. The Servicer
covenants and agrees to pay to the Trustee monthly (or as otherwise agreed),
and the Trustee shall be entitled to receive, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) for all services rendered by it in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and the Servicer shall
pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances, including reasonable attorneys' fees, incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad
faith. The Tax Matters Person (or Person acting as its attorney- in-fact or
agent) shall indemnify the Trustee for any liability of or assessment against
the Trustee resulting from any error in any tax or tax information returns
prepared or caused to be prepared by such Person. In the event that (i) the
Servicer does not pay to the Trustee any compensation owed to the Trustee
pursuant to this Agreement or (ii) the Trustee is not reimbursed for any
expense, disbursement or advance incurred or made by the Trustee pursuant to
this Agreement, the Trustee shall be entitled to withdraw and retain such
amount from the Certificate Account. In the event the Trustee incurs expenses
or renders services in any proceedings which result from an Event of Default
under Section 7.1, subsections (iii), (iv) or (v) of this Agreement, or from
any default which, with the passage of time, would become an Event of Default,
the expenses so incurred and compensation for services so rendered are
intended to constitute expenses of administration under the United States
Bankruptcy Code or equivalent law.
Section 8.7 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and
doing business under the laws of any state of 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 and subject to
supervision or examination by federal or state authority. The Trustee shall
not control the Servicer nor be a parent of or a subsidiary of the Servicer.
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 8.7 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 8.7, the Trustee
shall resign immediately in the manner and with the effect specified in
Section 8.8.
Section 8.8 Resignation and Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Servicer. Such notice shall also be
furnished to each Rating Agency. Upon receiving such notice of resignation,
the Servicer shall promptly appoint a successor trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee
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may petition any court of competent jurisdiction for the appointment of a
successor trustee at the expense of the Servicer.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.7 and shall fail to resign after written
request for the Trustee's resignation by the Servicer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged 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, then, with or without cause, the Servicer may remove the Trustee
and appoint a successor trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the Trustee so removed and one copy
to the successor trustee.
The Holders of Certificates having a Percentage Interest aggregating
not less than 51% of the aggregate Denomination of all Certificates 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 instrument or
instruments shall be delivered to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor trustee so appointed.
Any resignation or removal of the Trustee and appointment of
successor trustee pursuant to any of the provisions of this Section 8.8 shall
become effective only upon acceptance of appointment by the successor trustee
as provided in Section 8.9.
Section 8.9 Successor Trustee. Any successor trustee appointed as
provided in Section 8.8 shall execute, acknowledge and deliver to the Servicer
and to its predecessor trustee 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 like effect as if
originally named as trustee herein. The predecessor trustee shall deliver or
cause to be delivered to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files
at the time held by the Custodian, if it shall agree to become the agent of
any successor trustee hereunder), and the 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 8.9 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.7.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.9, the Servicer shall mail notice of the succession of such
trustee hereunder to all holders of Certificates at their addresses as shown
in the Certificate Register and to each Rating Agency. If
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the Servicer fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Servicer.
Section 8.10 Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided, that such Person
shall be eligible under the provisions of Section 8.7, 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.
Section 8.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, 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 the same may at the time be located, the
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, such title to the
Trust Fund, or any part thereof, and, subject to the other provisions of this
Section 8.11, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by
it of a request so to do, or in case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. Each co-trustee and separate trustee hereunder shall not be
required to meet the terms of eligibility as a successor trustee under Section
8.7 hereunder and no notice to holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.9
hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, 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 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 Trust
Fund or a portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, 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
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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.
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. The Trustee shall not be responsible
for any action or inaction of any such separate trustee or co-trustee. 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.
The Trustee may appoint one or more Eligible Institutions to act as
its agent or agents to perform any or all of its duties and obligations under
this Agreement. Each such agent shall be subject to all of 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.
Section 8.12 Appointment of Custodians. The Trustee may, with the
consent of the Servicer, appoint one or more Custodians, not affiliated with
the Depositor, to review, pursuant to Section 2.2 hereof, and hold all or a
portion of the Mortgage Files as agent for the Trustee provided, however, that
such appointed Custodian may be LaSalle Bank National Association, Standard
Federal Bank, N.A. or ABN AMRO Mortgage Group, Inc. Any Custodian appointed
shall be (i) ABN AMRO Mortgage Group, Inc., (ii) Standard Federal Bank, N.A.
or (iii) (a) an institution subject to supervision by federal or state
authority, (b) shall have combined capital and surplus of at least $50,000,000
and (c) shall be qualified to do business in the jurisdiction in which it
holds any Mortgage File.
Section 8.13 Authenticating Agent.
--------------------
(a) The Trustee may appoint from time to time an authenticating agent
(the "Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by the Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by the
Authenticating Agent. Any successor Authenticating Agent must be acceptable to
the Servicer and have a principal office and place of business in New York,
New York or Chicago, Illinois, have a combined capital and surplus of at least
$50,000,000, and be authorized to do a trust business and subject to
supervision or examination by federal or state authorities.
(b) Any corporation into which the Authenticating Agent 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
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate agency business of the Authenticating
Agent, shall
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continue to be the Authenticating Agent without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
(c) The Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and to the
Servicer. The Trustee may at any time terminate the agency of the
Authenticating Agent by giving written notice of termination to the
Authenticating Agent and to the Servicer. Upon receiving a notice of
resignation or upon such a termination, or in case at any time the
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 8.13, the Trustee promptly shall appoint a
successor Authenticating Agent, shall give written notice of such appointment
to the Servicer and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section
8.13.
(d) The Authenticating Agent shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any reasonable compensation paid to the Authenticating Agent shall be a
reimbursable expense under Section 8.6.
Section 8.14 Bloomberg. As soon as practicable after the Closing
Date, the Trustee or the Certificate Administrator, if any, will arrange with
Bloomberg to have the Depositor set up on Bloomberg to provide the information
set forth on Exhibit Q (the "Data") with respect to the Loans on a monthly
basis in a format acceptable to Bloomberg and acceptable to the Underwriters.
During the term of this Agreement, the Trustee will provide updated Data to
Bloomberg on or before each Distribution Date.
Section 8.15 Reports to Securities and Exchange Commission. Unless
otherwise directed by the Depositor in writing, the Certificate Administrator
or the Trustee, as applicable, shall prepare, sign and file with the
Securities and Exchange Commission, on behalf of the Depositor, (i) no later
than ten days after each Distribution Date, the Certificateholders' Report on
the appropriate form and in the appropriate medium authorized or prescribed
therefor under the Exchange Act, (ii) no later than March 25 of each calendar
year, an annual report meeting the requirements of the Exchange Act on the
appropriate form and in the appropriate medium authorized or prescribed
therefor under the Exchange Act. The Trustee or the Certificate Administrator,
as applicable, shall promptly forward copies of all filings made pursuant to
this Section 8.15 to the Depositor.
Section 8.16 [Reserved].
--------
93
ARTICLE IX
TERMINATION
Section 9.1 Termination upon Purchase by the Depositor or Liquidation
of All Loans. The respective obligations and responsibilities of the Servicer
and the Trustee created hereby (other than the obligation to make payments to
Certificateholders as hereafter set forth in this Section 9.1 and obligations
to the Trustee in Sections 8.4 and 8.6) shall terminate upon the earlier of
(i) the later of the final payment or other liquidation (or any Advance with
respect thereto) of the last Loan remaining in the Trust Fund and the
disposition of all property acquired in respect of any Loan or (ii) the
purchase by the Depositor of all Loans at a price equal to the sum of (a) the
principal balance of each Loan plus accrued interest thereon at the applicable
Mortgage Interest Rate to the next scheduled Installment Due Date and (b) the
fair market value of all acquired property in respect of Loans, such fair
market value to be determined by an appraiser selected by the Trustee or (iii)
the purchase by the Servicer, so long as the Servicer is the Depositor, of all
outstanding Certificates and delivery of such Certificates to the Trustee;
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof; and provided, further, that
a "plan of liquidation" of each of REMIC I and II in accordance with Section
860F of the Code must be adopted in conjunction with any termination effected
pursuant to subclauses (i), (ii), or (iii) of this Section 9.1.
The Depositor is hereby granted the right to purchase the Loans
pursuant to clause (ii) above, provided, however, that such right shall be
conditioned upon the Principal Balances of such Loans, at the time of any such
purchase, aggregating an amount less than 10% of the aggregate Principal
Balance of the Loans on the Cut-off Date, after deduction of payments due on
or before such date.
Notice of any termination pursuant to clause (i), (ii) or (iii)
above, specifying the Distribution Date upon which all Certificateholders may
surrender their Certificates to the Trustee or its agent for payment and
cancellation, shall be given promptly by the Trustee or its agent (upon
direction by the Servicer no less than 10 days prior to the date such notice
is to be mailed) by letter to Certificateholders and each Rating Agency mailed
by first class mail no later than the 25th day of the month preceding the
month of such final distribution specifying (i) the Distribution Date upon
which final payment on the Certificates will be made upon presentation and
surrender of Certificates at the office or agency of the Trustee or the
Certificate Registrar therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee or the Certificate Registrar therein specified. The Trustee or its
agent shall give such notice to the Certificate Registrar and each Rating
Agency at the time such notice is given to the Certificateholders. Upon any
such termination, the duties of the Certificate Registrar shall also
terminate. In the event such notice is given in connection with Depositor's
election to purchase, the Depositor shall deposit in the Certificate Account
on the related Withdrawal Date an amount
94
equal to the above-described purchase price and upon such deposit
Certificateholders will be entitled to the amount of such purchase price but
not amounts in excess thereof, all as provided herein. With respect to the
Certificates, upon presentation and surrender of the Certificates pursuant to
any termination under this Section 9.1, the Trustee or Paying Agent shall
cause to be distributed to Certificateholders an amount equal to (a) the
amount otherwise distributable on such Distribution Date, if not in connection
with a purchase; or (b) if the Depositor elected to so purchase, the purchase
price calculated as above provided. Upon any termination pursuant to clause
(iii) above, or upon certification to the Trustee by a Servicing Officer
following such final deposit, the Trustee and any Custodian shall promptly
release to the Servicer the Mortgage Files for the remaining Loans, and the
Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within three months after the time
specified in the above-mentioned written notice, the Trustee or its agent
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 three months after the second
notice all the Certificates shall not have been surrendered for cancellation,
the Trustee or its agent shall take appropriate and reasonable steps as
directed by the Servicer, 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 in trust hereunder.
Section 9.2 Trusts Irrevocable. Except as expressly provided
herein, all trusts created hereby are irrevocable.
Section 9.3 Additional Termination Requirements.
(a) In the event the Depositor exercises its purchase option as
provided in Section 9.1, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee and the Certificate
Administrator have received an Opinion of Counsel to the effect that the
failure of the Trust Fund to comply with the requirements of this Section 9.3
will not (i) result in the imposition of taxes on "prohibited transactions" of
REMIC I or REMIC II of the Trust Fund as described in Section 860F(a)(2) of
the Code, or (ii) cause either REMIC I or REMIC II of the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(A) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Depositor under Section 9.1, the Tax
Matters Person shall prepare the documents associated with and shall
adopt a plan of complete liquidation of each of REMIC I and REMIC II
of the Trust Fund; and
(B) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the
Servicer as agent of the Trustee shall sell all of the assets of the
Trust Fund to the Depositor for cash in accordance with such plan of
liquidation; provided, however, that in the event that a calendar
quarter ends after the time
95
of adoption of such a plan of complete liquidation but prior to the
final Distribution Date, the Servicer shall not sell any of the
assets of the Trust Fund prior to the close of that calendar quarter.
(b) The Tax Matters Person hereby agrees to adopt such a plan of
complete liquidation and to take such other action in connection therewith as
may be reasonably requested by the Servicer.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Amendment. This Agreement may be amended from time to
time by the Depositor and the Trustee, without the consent of any of the
Certificateholders, (a) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising
under this Agreement, (b) to modify, eliminate or add to any provisions to
such extent as shall be necessary to maintain the qualification of the Trust
Fund as a REMIC at all times that any Class A or Subordinate Certificates are
outstanding, provided, that the Trustee has received an Opinion of Counsel to
the effect that such action is necessary or desirable to maintain such
qualification, provided, that such action under clauses (a) and (b) above
shall not adversely affect in any material respect the interests of any
Certificateholder or (c) such amendment is made to conform the terms of this
Agreement to the terms described in the Prospectus dated December 10, 2001,
together with the Prospectus Supplement dated February 26, 2002.
This Agreement may also be amended from time to time by the Depositor
and the Trustee with the consent of the Holders of Certificates evidencing, in
aggregate, not less than 50% of the Trust Fund for the purpose of adding any
provisions 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 (a) reduce in
any manner the amount of, or delay the timing of, payments received on Loans
which are required to be distributed in respect of any Certificate without the
consent of the Holder of such Certificate; (b) adversely affect in any
material respect the interest of the Holders of the Class A Certificates in a
manner other than as described in (a) above without the consent of the Holders
of Class A Certificates aggregating not less than 66-2/3% of the aggregate
Percentage Interest evidenced by all Class A Certificates; (c) adversely
affect in any material respect the interest of the Holders of the Subordinate
Certificates in a manner other than as described in clause (a) above without
the consent of the Holders of Subordinate Certificates aggregating not less
than 66-2/3% of the aggregate Percentage Interest evidenced by all Subordinate
Certificates; (d) adversely affect in any material respect the interest of the
Class R Certificateholder without the consent of the Holder of the Class R
Certificate; (e) change in any material respect the rights and obligations of
the Servicer or successor Servicer under this Agreement without the prior
written consent of such party; or (f) reduce the aforesaid percentage of the
Certificates the Holders of which are required to consent to any such
amendments without the consent of the Holders of all Certificates then
96
outstanding; provided, that for the purposes of this Agreement, the Holder of
the Class R Certificate shall have no right to vote at all times that any
Class A Certificates or Subordinate Certificates are outstanding if such
amendment relates to the modification, elimination or addition of any
provision necessary to maintain the qualification of the Trust Fund as a
REMIC.
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 to the effect that such amendment will
not cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a
REMIC at any time that any REMIC I Regular Interests or REMIC II Certificates
are outstanding.
As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment
to each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of the Certificateholders
under this Section 10.1 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.
Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by
this Agreement. The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement.
Section 10.2 Recordation of Agreement. This Agreement (or an abstract
hereof, if acceptable by the applicable recording office) 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
Servicer at its expense, but only after the Depositor has delivered to the
Trustee 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 10.3 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
97
Except as otherwise expressly provided herein no Certificateholder,
solely by virtue of its status as Certificateholder, shall have any right to
vote 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 person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision 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 default
and of the continuance thereof, as hereinbefore provided, and unless all of
the Holders of Certificates evidencing, in aggregate, not less than 25% of the
Trust Fund shall have made written request upon 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 of any provision of this
Agreement to affect, disturb or prejudice the rights of the Holders of any
other of such 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 benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 10.3, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 10.4 Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.5 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by certified or registered mail, return
receipt requested (a) in the case of the Depositor, to ABN AMRO Mortgage
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ - Director - ABN AMRO Mortgage Operations, or such
other address as may hereafter be furnished to the Servicer and the Trustee in
writing by the Depositor, (b) in the case of the Servicer, to InterFirst, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇ -
Vice President with a copy to ABN AMRO Mortgage Group, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or such other
address as may hereafter be furnished to the Depositor and the Trustee in
writing by the
98
Servicer, (c) in the case of the Trustee, to the Corporate Trust Office, or
such other address as may hereafter be furnished to the Depositor and the
Servicer in writing by the Trustee, in each case Attention: Corporate Trust
Department, (d) in the case of S&P, to Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Residential Mortgage Surveillance Department, or
such other address as may hereinafter be furnished to the Depositor in writing
by S&P and (e) in the case of Fitch, to Fitch Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Residential
Mortgage, or such other address as may hereinafter be furnished to the
Depositor in writing by Fitch. Any notice required or permitted to be mailed
to a Certificateholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice
mailed or transmitted within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the addressee
receives such notice; provided, that any demand, notice or communication to or
upon the Depositor, the Servicer or the Trustee shall not be effective until
received.
Section 10.6 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
99
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
ABN AMRO MORTGAGE CORPORATION, as
Depositor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President
S-1
JPMorgan Chase Bank,
as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Trust Officer
S-2
ABN AMRO MORTGAGE GROUP, INC.,
as Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: Group Senior Vice President
S-3
STATE OF FLORIDA )
) ss.:
COUNTY OF _______ )
On the ________ day of __________________, 2002, before me,
_______________, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a Vice President of
ABN AMRO Mortgage Corporation, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument, and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal:
Signature_________________________
(SEAL)
▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the ______ day of _________________, 2002, before me,
__________________________, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, known to me to
be a Trust Officer of JPMorgan Chase Bank, one of the institutions that
executed the within instrument and also known to me to be the person who
executed it on behalf of said institution, and acknowledged to me that such
institution executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------
Notary Public
[NOTARIAL SEAL]
S-5
STATE OF MICHIGAN )
) ss.:
COUNTY OF OAKLAND )
On the ______ day of ____________________, 2002, before me, ▇▇▇▇▇
▇▇▇▇▇▇▇, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇, known to me to be a Group Senior
Vice President of ABN AMRO Mortgage Group, Inc., one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[NOTARIAL SEAL]
S-6
EXHIBIT A
---------
FORMS OF CERTIFICATES
Exhibit A-1
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-1
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is February 26, 2002.
The rate at which interest is payable as of the Issue Date with respect to
this Certificate is 5.50% per annum.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-2
Portion of the Class A-1 Principal Balance
as of the Cut-Off Date
evidenced by this
Certificate:
Class A-1 Remittance Rate: 5.5 $_______________
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class A-1 Principal Balance as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner Certificate No.
-----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP
---------
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-2
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is February 26, 2002.
The rate at which interest is payable as of the Issue Date with respect to
this Certificate is 6.00% per annum.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-2
Portion of the Class A-2 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $_______________
Class A-2 Remittance Rate: 6.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class A-2 Principal Balance as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner
Certificate No.
----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP
--------------
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-3
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is February 26, 2002.
The rate at which interest is payable as of the Issue Date with respect to
this Certificate is 6.50% per annum.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-2
Portion of the Class A-3 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $_______________
Class A-3 Remittance Rate: 6.50%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class A-3 Principal Balance as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner Certificate No.
----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP
-------------
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-X
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is February 26, 2002.
The rate at which interest is payable as of the Issue Date with respect to
this Certificate is 6.50% per annum.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-2
Portion of the Class A-X Notional Amount
as of the Cut-Off Date evidenced by this
Certificate: $_______________
Class A-X Remittance Rate: 6.50%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class A-X Notional Amount as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner Certificate No.
----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP ________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-P
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is February 26, 2002.
Interest is not payable with respect to this Certificate.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-2
Portion of the Class A-P Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $_______________
Class A-P Remittance Rate: 0.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class A-P Principal Balance as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner Certificate No.
----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP
----------
MORTGAGE PASS-THROUGH CERTIFICATE
Class M
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is
February 26, 2002. The rate at which interest is payable as of the Issue Date
with respect to this Certificate is 6.00% per annum.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Class M Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-2 Portion of the Class M Principal Balance
as of the Cut-Off Date evidenced by this
Certificate:
$_______________
Class M Remittance Rate: 6.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class M Principal Balance as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner Certificate No.
----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP
----------
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-1
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is February 26, 2002.
The rate at which interest is payable as of the Issue Date with respect to
this Certificate is 6.00% per annum.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Class B-1 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-2 Portion of the Class B-1 Principal
Balance as of the Cut-Off
Date evidenced by this Certificate:
$_______________
Class B-1 Remittance Rate: 6.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class B-1 Principal Balance as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner Certificate No.
----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP
----------
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-2
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is February 26, 2002.
The rate at which interest is payable as of the Issue Date with respect to
this Certificate is 6.00% per annum.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Class B-2 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-2 Portion of the Class B-2 Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate: $_______________
Class B-2 Remittance Rate: 6.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class B-2 Principal Balance as of the Cut-Off Date: $_______________
Cede & Co.
----------
Registered Owner Certificate No.
----
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSIP
----------
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-3
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is
February 26, 2002. The rate at which interest is payable as of the Issue Date
with respect to this Certificate is 6.00% per annum.
IN THE CASE OF ANY CLASS B-3 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) (A "PLAN"), A TRUSTEE OF ANY SUCH
PLAN, OR ANY OTHER PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO
EFFECT SUCH ACQUISITION, THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE
SUCH TRANSFEREE TO PROVIDE AN OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE
OFFICER OF SUCH TRANSFEREE STATING THAT THE TRANSFEREE IS AN INSURANCE
COMPANY USING ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE
MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60) TO EFFECT SUCH PURCHASE AND SATISFIES ALL OF THE
REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PTCE 95-60,
WHICH OFFICER'S CERTIFICATE SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR.
The Class B-3 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-2 Portion of the Class B-3 Principal
Balance as of the Cut-Off
Date evidenced by this Certificate:
$_______________
Class B-3 Remittance Rate: 6.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class B-3 Principal Balance as of the Cut-Off Date: $_______________
Registered Owner Certificate No.
----
A-9-1
Exhibit A-10
CUSIP
---------------
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-4
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is
February 26, 2002. The rate at which interest is payable as of the Issue Date
with respect to this Certificate is 6.00% per annum.
IN THE CASE OF ANY CLASS B-4 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) (A "PLAN"), A TRUSTEE OF ANY SUCH
PLAN, OR ANY OTHER PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO
EFFECT SUCH ACQUISITION, THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE
SUCH TRANSFEREE TO PROVIDE AN OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE
OFFICER OF SUCH TRANSFEREE STATING THAT THE TRANSFEREE IS AN INSURANCE
COMPANY USING ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE
MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60) TO EFFECT SUCH PURCHASE AND SATISFIES ALL OF THE
REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PTCE 95-60,
WHICH OFFICER'S CERTIFICATE SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR.
The Class B-4 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-2 Portion of the Class B-4 Principal
Balance as of the Cut-Off
Date evidenced by this Certificate:
$_______________
Class B-4 Remittance Rate: 6.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class B-4 Principal Balance as of the Cut-Off Date: $_______________
Registered Owner Certificate No.
----
A-10-1
Exhibit A-11
CUSIP
-------------
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-5
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is
February 26, 2002. The rate at which interest is payable as of the Issue Date
with respect to this Certificate is 6.00% per annum.
IN THE CASE OF ANY CLASS B-5 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) (A "PLAN"), A TRUSTEE OF ANY SUCH
PLAN, OR ANY OTHER PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO
EFFECT SUCH ACQUISITION, THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE
SUCH TRANSFEREE TO PROVIDE AN OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE
OFFICER OF SUCH TRANSFEREE STATING THAT THE TRANSFEREE IS AN INSURANCE
COMPANY USING ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE
MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60) TO EFFECT SUCH PURCHASE AND SATISFIES ALL OF THE
REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PTCE 95-60,
WHICH OFFICER'S CERTIFICATE SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR.
The Class B-5 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-2 Portion of the
Class B-5 Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate:
$_______________
Class B-5 Remittance Rate: 6.00%
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class B-5 Principal Balance as of the Cut-Off Date: $_______________
Registered Owner Certificate No.
----
A-11-1
EXHIBIT B
FORM OF RESIDUAL CERTIFICATE
CUSIP
----------
MORTGAGE PASS-THROUGH CERTIFICATE
Class R
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to-four family mortgage loans formed and
administered by
ABN AMRO MORTGAGE CORPORATION
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE DEPOSITOR AND
THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE
DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED
BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO
BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R CERTIFICATE PRESENTED FOR REGISTRATION IN THE NAME
OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS) (A "PLAN"), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER
PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION,
THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE SUCH TRANSFEREE TO PROVIDE
AN OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF SUCH TRANSFEREE
STATING THAT THE TRANSFEREE IS AN INSURANCE COMPANY USING ASSETS OF AN
"INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60) TO EFFECT SUCH PURCHASE
AND SATISFIES ALL OF THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I
AND III OF PTCE 95-60, WHICH OFFICER'S CERTIFICATE SHALL NOT BE AN EXPENSE OF
THE TRUSTEE OR THE DEPOSITOR.
Solely for U.S. federal income tax purposes, this Certificate represents
"residual interests" in "real estate mortgage investment conduits," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended.
Series 2002-2 Percentage Interest evidenced by this Class R Certificate in the distributions
to be made with respect to the Class R Certificate: 100%
Class R Remittance Rate: 6.00% Additionally, the Class R Certificates are entitled to Excess Liquidation
Proceeds and the Residual Distribution Amount as defined in the Pooling
and Servicing Agreement.
Cut-Off Date: February 1, 2002
First Distribution Date: March 25, 2002
Last Scheduled Distribution Date: March 25, 2017
Class R Principal Balance as of the Cut-Off Date: $100
Registered Owner Certificate No.
------
B-1
EXHIBIT C
---------
[RESERVED]
C-1
EXHIBIT D
---------
SCHEDULE OF LOANS
A copy of Schedule of Loans is available upon request.
D-1
EXHIBIT E
---------
FIELDS OF LOAN INFORMATION
Deal Name
Distribution Date
Loan Number
City
State
Zip Code
Property Type (SFR, CONDO, etc.)
Occupancy Status (Owner, Investor, etc.)
Loan Purpose (Purchase, Refi, etc.)
Loan Type
Loan Status (Current, Foreclosure, REO, Bankruptcy)
Original Term of Loan
Amortization Term
First Payment of Loan
Maturity Date
Appraisal Value
Original LTV
Original Principal Balance
Previous Month's Balance
Current Principal Balance
Prepay Date
Prepay Status (Loan has been prepaid, liquidated or repurchased by the Servicer)
Original Scheduled P&I
Current Scheduled P&I
Scheduled Interest Amount
Scheduled Principal Amount
Curtailment
Note Rate
Paid to Date
Payment Date
E-1
EXHIBIT F
---------
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
JPMorgan Chase Bank, as Trustee
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
[LaSalle Bank National Association, as Certificate Registrar
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ABN AMRO Series 2002-2]
Re: Purchase of ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates Series 2002-2, Class [B-3] [B-4] [B-5]
(the "Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify that
(a) we understand the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act") and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act,
and (b) we have not offered or sold any certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action
which would result in a violation of Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By: ______________________
Authorized Officer
F-1
EXHIBIT G
---------
FORM OF TRANSFEREE'S CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
ABN AMRO Mortgage Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[LaSalle Bank National Association, as Certificate Registrar
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ABN AMRO Series 2002-2]
The undersigned (the "Purchaser") proposes to purchase [Class B-3]
[Class B-4] [Class B-5] Certificates evidencing an undivided interest in ABN
AMRO Mortgage Corporation Mortgage Pass- Through Certificates, Series 2002-2
(the "Purchased Certificates") in the principal amount of $__________. In
doing so, the Purchaser hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Pooling
and Servicing Agreement, dated as of February 1, 2002, between ABN AMRO
Mortgage Corporation ("AAMC"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer") and JPMorgan Chase Bank, as trustee (the "Trustee"), of the ABN
AMRO Mortgage Corporation Mortgage Pass-Through Certificates, Series 2002-2.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants
to AAMC, the Servicer, the Certificate Registrar and the Trustee that:
(a) The Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which the Purchaser is
organized, is authorized to invest in the Purchased Certificates, and to enter
into this Agreement, and duly executed and delivered this Agreement;
(b) The Purchaser is acquiring the Purchased Certificates for its own
account as principal and not with a view the distribution thereof, in whole or
in part;
G-1
(c) The Purchaser is an "accredited investor" as such term is defined
in paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section 501 of
Regulation D under the Securities Act of 1933, as amended (the "Act"), has
knowledge of financial and business matters and is capable of evaluating the
merits and risks of an investment in the Purchased Certificates; the Purchaser
has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision; and the Purchaser is able
to bear the economic risk of an investment in the Purchased Certificates and
can afford a complete loss of such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that AAMC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from AAMC
concerning the Trust, the purchase by the Purchaser of the Purchased
Certificates and all matters relating thereto that AAMC possesses or can
acquire without unreasonable effort or expense;
(f) If applicable, the Purchaser has complied, and will continue to
comply, with the guidelines established by Thrift Bulletin 12 issued December
13, 1988, by the Office of Regulatory Activities of the Federal Home Loan Bank
System; and
(g) The Purchaser will provide the Trustee and the Servicer with
affidavits substantially in the form of Exhibit A attached hereto.
Section 3. Transfer of Purchased Certificates.
(a) The Purchaser understands that the Purchased Certificates have
not been registered under the Act, or any state securities laws and that no
transfer may be made unless the Purchased Certificates are registered under
the Act and under applicable state law or unless an exemption from
registration is available. The Purchaser further understands that neither AAMC
nor the Trust is under any obligation to register the Purchased Certificates
or make an exemption available. In the event that such a transfer is to be
made within two years from the Closing Date without registration under the Act
or applicable state securities laws, (i) the Trustee or the Certificate
Registrar shall require, in order to assure compliance with such laws, that
the Certificateholder's prospective transferees each certify to AAMC, the
Certificate Registrar and the Trustee as to the factual basis for the
registration or qualification exemption relied upon, and (ii) the Trustee, the
Certificate Registrar or AAMC may require an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Act and state
securities laws, which Opinion of Counsel shall not be an expense of the
Trustee, the Certificate Registrar or AAMC. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify
the Trustee and AAMC 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.
(b) No transfer of a Purchased Certificate shall be made unless the
transferee provides AAMC, the Certificate Registrar and the Trustee with (i) a
Transferee's Agreement, substantially in the form of this Agreement, and (ii)
an affidavit substantially in the form of Exhibit A hereto that the
G-2
proposed transferee (x) is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended, or comparable
provisions of any subsequent enactments (a "Plan"), a trustee of any Plan, or
any other Person who is using the "plan assets" of any Plan to effect such
acquisition or (y) is an insurance company, the source of funds to be used by
it to purchase the Purchased Certificates is an "insurance company general
account" (within the meaning of Department of Labor Prohibited Transaction
Class Exemption ("PTCE") 95-60), and is eligible for, and satisfies all the
requirements for, exemptive relief under Sections I and III of PTCE 95-60.
(c) The Purchaser acknowledges that its Purchased Certificates bear a
legend setting forth the applicable restrictions on transfer.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
validly executed by its duly authorized representative as of the day and the
year first above written.
[Purchaser]
By:
-------------------------
Its:
G-3
Exhibit A to Form of Transferee Agreement (Exhibit G)
BENEFIT PLAN AFFIDAVIT
----------------------
RE: ABN AMRO MORTGAGE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2002-2 (THE "TRUST") [CLASS B-3] [CLASS B-4] [CLASS B-5]
CERTIFICATES (THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, _______________________________,
declare that, to the best of my knowledge and belief, the following
representations are true, correct and complete; and
1. That I am the ____________ of ___________________________ (the
"Purchaser"), whose taxpayer identification number is ___________, and on
behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in Trust.
3. That the Purchaser (i) is not an employee benefit plan or other
plan or arrangement subject to the prohibited transaction provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or
comparable provisions of any subsequent enactments (a "Plan"), a trustee of
any Plan, or any other Person who is using the "plan assets" of any Plan to
effect such acquisition, or (ii) has provided an Officer's Certificate signed
by a Responsible Officer of the Purchaser satisfactory to ABN AMRO Mortgage
Corporation (the "Depositor"), the Certificate Registrar, and the Trustee of
the Trust stating that the Purchaser is an insurance company using assets of
an "insurance company general account" (within the meaning of Department of
Labor Prohibited Transaction Class Exemption ("PTCE") 95-60) to effect such
purchase and is eligible for, and satisfies all of the requirements for
exemptive relief under Sections I and III of PTCE 95-60, which Officer's
Certificate shall not be an expense of the Depositor or the Trustee.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
duly executed on its behalf, by its duly authorized officer this ______ day of
______________________, 20____.
[Purchaser]
By:
--------------------------
Its:
G-4
Personally appeared before me _________________, known or proved to
me to be the same person who executed the foregoing instrument and to be a
______________ of the Purchaser, and acknowledged to me that (s)he executed
the same as his/her free act and deed and as the free act and deed of the
Purchaser.
SUBSCRIBED and SWORN to before me this __day of ________________,
20___.
----------------------
Notary Public
G-5
EXHIBIT H
---------
[RESERVED]
H-1
EXHIBIT I
---------
FORM OF TRANSFEROR CERTIFICATE
[Date]
JPMORGAN CHASE BANK, AS TRUSTEE
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTN: INSTITUTIONAL TRUST SERVICES
[LASALLE BANK NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ABN AMRO SERIES 2002-2_________________________]
RE: ABN AMRO MORTGAGE CORPORATION MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2002-2 CLASS R
This letter is delivered to you in connection with the sale by
____________________ (the "Seller") to _____________ (the "Purchaser") of $
__________________ initial Certificate Principal Balance of Mortgage Pass-
Through Certificates, Series 2002-2, Class R (the "Certificate"), pursuant to
Section 5.1 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of February 1, 2002 among ABN AMRO Mortgage Corporation,
as depositor (the "Company"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer"), and JPMorgan Chase Bank, as trustee (the "Trustee"). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with the Depositor, the Servicer, the Certificate
Registrar and the Trustee that:
1. No purpose of the Seller relating to the sale of the
Certificate by the Seller to the Purchaser is or will be to enable the Seller
to impede the assessment or collection of tax.
2. The Seller understands that the Purchaser has delivered to
the Trustee, the Servicer, the Certificate Registrar and the Depositor a
transferee affidavit and agreement in the form attached to the Pooling and
Servicing Agreement as Exhibit J. The Seller does not know or believe that any
representation contained therein is false.
3. The Seller has no actual knowledge that the Proposed
Transferee is not a Permitted Transferee.
I-1
4. The Seller has no actual knowledge that the Purchaser would
be unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificates.
5. At the time of this transfer (i) the Seller has conducted a
reasonable investigation of the financial condition of the Purchaser and, as a
result of the investigation, found that the Purchaser has historically paid
its debts as they came due, and found no significant evidence to indicate that
the Purchaser will not continue to pay its debts as they come due in the
future and (ii) either (A) the Seller (1) has determined all of the following
(I) at the time of the transfer, and at the close of each of the Purchaser's
two fiscal years preceding the year of transfer, the Purchaser's gross assets
for financial reporting purposes exceed $100 million and its net assets for
such purposes exceed $10 million (disregarding, for purposes of determining
gross or net assets, the obligation of any person related to the Purchaser
within the meaning of section 860L(g) of the Code or any other asset if a
principal purpose for holding or acquiring that asset is to permit the
Purchaser to satisfy this minimum gross asset or net asset requirement), (II)
the Purchaser is a domestic C corporation for United States federal income tax
purposes that is not for such purposes an exempt corporation, a regulated
investment company, a real estate investment trust, a REMIC, or a cooperative
organization to which part I of subchapter T of the Code applies, (III) there
are no facts or circumstances on or before the date of transfer (or
anticipated) which would reasonably indicate that the taxes associated with
the Certificates will not be paid, (IV) the Purchaser is not a foreign branch
of a domestic corporation, and (V) the transfer does not involve a transfer or
assignment to a foreign branch of a domestic corporation (or any other
arrangement by which any Certificate is at any time subject to net tax by a
foreign country or U.S. possession) and the Purchaser will not hereafter
engage in any such transfer or assignment (or any such arrangement), and (2)
does not know or have reason to know that the Purchaser will not honor the
restrictions on subsequent transfers of any Class R Certificate described in
paragraph 12 and 13 of the Transferee's Transfer Affidavit, or (B) the Seller
has determined that the present value of the anticipated tax liabilities
associated with the holding of the Certificates do not exceed the sum of (1)
the present value of any consideration given to the Purchaser to acquire the
Certificates, (2) the present value of the expected future distributions on
the Certificates, and (3) the present value of the anticipated tax savings
associated with holding the Certificates as the REMIC generates losses (having
made such determination by (I) assuming that the Purchaser pays tax at a rate
equal to the highest rate of tax specified in Section 11(b)(1) of the Code, and
(II) utilizing a discount rate for present valuation purposes equal to the
applicable Federal rate prescribed by Section 1274(d) of the Code compounded
semi- annually (or a lower discount rate based on the Purchaser having
demonstrated that it regularly borrows, in the course of its trade or
business, substantial funds at such lower rate from unrelated third parties)).
I-2
6. The Purchaser has represented to the Seller that, if the
Certificates constitute a noneconomic residual interest, it (i) understands
that as holder of a noneconomic residual interest it may incur tax liabilities
in excess of any cash flows generated by the interest, and (ii) intends to pay
taxes associated with its holding of the Certificates as they become due.
7. The Seller understands that the transfer of the Certificates
may not be respected for United States income tax purposes (and the Seller may
continue to be liable for United States income taxes associated therewith)
unless there is compliance with the standards of paragraph 5. above as to any
transfer.
Very truly yours,
[Seller]
By:
---------------------------
Name: -------------------------
Title: ------------------------
I-3
EXHIBIT J
FORM OF TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the Class R Certificate (the "Owner")), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ] [the United States], on behalf of which he makes this affidavit and
agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of the [date of transfer] within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code") and
will endeavor to remain other than a disqualified organization for so long as
it retains its ownership interest in the Class R Certificate, and (ii) is
acquiring the Class R Certificate for its own account or for the account of
another Owner from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, or any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental
entity, or any foreign government or international organization, or any agency
or instrumentality of such foreign government or organization, any rural
electric or telephone cooperative, or any organization (other than certain
farmers' cooperatives) that is generally exempt from federal income tax unless
such organization is subject to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed
on transfers of the Class R Certificate; (ii) that such tax would be on the
transferor, or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a disqualified organization, on the agent;
(iii) that the person otherwise liable for the tax shall be relieved of
liability for the tax if the transferee furnished to such person an affidavit
that the transferee is not a disqualified organization and, at the time of
transfer, such person does not have actual knowledge that the affidavit is
false; and (iv) that the Class R Certificate may represent "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual
interest will remain liable for any taxes due with respect to the income on
such residual interest, if a significant purpose of the transfer was to enable
the transferor to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificate if at any time during the taxable year
of the pass-through entity a disqualified organization
J-1
is the record holder of an interest in such entity. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives.)
5. That the Owner is aware that the Trustee and the Certificate
Registrar will not register the transfer of the Class R Certificate unless the
transferee, or other transferee's agent, delivers to each of them an affidavit
and agreement, among other things, in substantially the same form as this
affidavit and agreement. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner has reviewed the restrictions set forth on the
face of the Class R Certificate and the provisions of Section 5.1 of the
Pooling and Servicing Agreement under which the Class R Certificate was
issued. The Owner expressly agrees to be bound by and to comply with such
restrictions and provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class R Certificate
will only be owned, directly or indirectly, by an Owner that is not a
disqualified organization.
8. The Owner's Taxpayer Identification Number is .
--------------
9. That no purpose of the Owner relating to the purchase of the
Class R Certificate by the Owner is or will be to enable the transferor to
impede the assessment or collection of tax.
10. That the Owner has no present knowledge or expectation that
it will be unable to pay any United States taxes owed by it so long as any of
the Certificates remain outstanding.
11. That the Owner has no present knowledge or expectation that
it will become insolvent or subject to a bankruptcy proceeding for so long as
any of the Certificates remain outstanding.
12. That Owner will, in connection with any transfer that it
makes of the Class R Certificate deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit I to the Pooling
and Servicing Agreement. [The Owner hereby agrees that it will not make any
transfer of any Class R Certificate unless (i) the transfer is to an entity
which is a domestic C corporation (other than an exempt corporation, a
regulated investment company, a real estate investment trust, a REMIC, or a
J-2
cooperative organization to which part I of Subchapter T of the Code applies)
for federal income tax purposes, and (ii) the transfer is in compliance with
the conditions set forth in paragraph 5 of Exhibit I of the Pooling and
Servicing Agreement.](1)/.
13. The Owner (i) is a citizen or resident of the United States,
a corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations) or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such U.S. Persons have the authority to control all
substantial decisions of the trust and (ii) if the Owner is a partnership for
U.S. federal income tax purposes, each person or entity which holds an
interest (directly or indirectly, through a pass-through entity) is a person
or entity described in (i). To the extent prescribed in regulations by the
Secretary of the Treasury, which have not yet been issued, a trust which was
in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part 1 of subchapter J of chapter 1 of the Code),
and which was treated as a U.S. Person on August 20, 1996 may elect to
continue to be treated as a U.S. Person notwithstanding the previous sentence.
14. The Owner hereby agrees to cooperate with the Depositor and
to take any action required of it by the Code or Treasury regulations
thereunder (whether now or hereafter promulgated) in order to create or
maintain the REMIC status of the REMIC I or the REMIC II.
15. The Owner hereby agrees that it will not take any action
that could endanger the REMIC status of the REMIC I or the REMIC II, as
applicable, or result in the imposition of tax on the REMIC I or the REMIC II
unless counsel for, or acceptable to, the Depositor has provided an opinion
that such action will not result in the loss of such REMIC status or the
imposition of such tax, as applicable.
16. The Owner as transferee of the Class R Certificate has
represented to their transferor that, if the Class R Certificate represents
noneconomic residual interests, the Owner (i) understands that as holder of a
noneconomic residual interest it may incur tax liabilities in excess of any
cash flows generated by the interest, and (ii) intends to pay taxes associated
with its holding of the Class R Certificate as they become due.
--------
(1)/ Bracketed text to be included if the Owner is relying on the transferee's
compliance with the "Asset Test Safe Harbor" (which is generally described as
the second "safe harbor" in the Prospectus Supplement) rather then the
"Formula Test Safe Harbor" (which is generally described as the first "safe
harbor" in the Prospectus Supplement). See "Federal Income Tax
Consequences--Special Tax Considerations Applicable to the Residual
Certificate" in the Prospectus Supplement.
J-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors,
by its [Title of Officer] and its corporate seal to be hereunto attached,
attested by its [Assistant] Secretary, this _________ day of ________, 20__
[Name of Owner]
By:
----------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
J-4
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and Acknowledged to
me that he executed the same as his free act and deed and free act and deed of
the Owner.
Subscribed and sworn before me this day of , 20 .
----- ------------- ----
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the ________ day
of , 20
--------------- ----
J-5
EXHIBIT K
FORM OF ADDITIONAL MATTER INCORPORATED
INTO THE FORM OF THE CERTIFICATES
This Certificate does not represent an obligation of or interest in
ABN AMRO Mortgage Corporation or any of its affiliates. Neither this
Certificate nor the underlying Loans are guaranteed by any agency or
instrumentality of the United States.
This certifies that the above-mentioned Registered Owner is the
registered owner of certain interests in a trust fund (the "Certificate Trust
Fund") whose assets consist of, among other things, a pool (the "Mortgage
Pool") of conventional one- to four-family mortgage loans (the "Loans"),
formed by ABN AMRO Mortgage Corporation (the "Depositor"). The Loans were
originated or acquired by various financial institutions and subsequently
acquired by the Depositor. The Mortgage Pool was created pursuant to a Pooling
and Servicing Agreement, dated as of the Cut-Off Date stated above (the
"Pooling Agreement"), between the Depositor, ABN AMRO Mortgage Group, Inc., as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing herein
shall be deemed inconsistent with such meanings, and in the event of any
conflict between the Pooling Agreement and the terms of this Certificate, the
Pooling Agreement shall control. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Pooling Agreement, to
which Pooling Agreement the Holder of this Certificate, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), to the extent of such Certificateholder's Percentage Interest
represented by this Certificate in the portion of the Certificate Distribution
Amount for such Distribution Date then distributable on the Certificates of
this Class, as specified in Section 4.1 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee or its
Paying Agent by wire transfer or by other means of payment acceptable to each
Certificateholder of record on the immediately preceding Record Date.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee or its Paying Agent of the pendency of
such distribution and only upon presentation and surrender of this Certificate
to the Certificate Registrar.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for all purposes
have the same effect as if set forth at this place.
K-1
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
be entitled to any benefit under the Pooling Agreement or be valid for any
purpose.
K-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
JPMORGAN CHASE BANK, as Trustee
By:
-----------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling Agreement.
JPMORGAN CHASE BANK,
as Trustee
By: _____________________
Dated: __________________
K-3
ABN AMRO MORTGAGE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass- Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing certain
interests in the Certificate Trust Fund.
The Certificates do not represent an obligation of, or an interest
in, the Depositor or any of its affiliates and are not insured or guaranteed
by any governmental agency. The Certificates are limited in right of payment
to certain collections and recoveries respecting the Loans, all as more
specifically set forth herein and in the Pooling Agreement. To the extent
described in the Pooling Agreement, the Servicer is obligated to advance its
own funds to cover certain shortfalls with respect to payments on the Loans.
In the event Servicer funds are advanced with respect to any Loan, such
advance is reimbursable to the Servicer from the related recoveries on such
Loan or from other cash deposited in the Custodial Account for P&I to the
extent that such advance is not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Custodial
Account for P&I may be made by the Servicer from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement to the Servicer of advances made, or certain expenses incurred,
by it.
The Pooling Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Servicer, and the rights of the
Certificateholders under the Pooling Agreement at any time by the Depositor
and the Trustee, with the consent of the Holders of the Certificates
aggregating not less than 66-2/3% of the aggregate Percentage Interest
evidenced by all of the Certificates of the Trust Fund. For the purposes of
such provision and except as provided below, voting rights related to 100% of
the Aggregate Certificate Principal Balance of any Class will be allocated pro
rata (by Certificate Principal Balance) among the Certificates of such Class.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Pooling Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices of the Certificate Registrar or the
office maintained by the Trustee in the City and State of New York, duly
endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee or any
Authenticating Agent duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of Authorized Denominations evidencing the same Percentage
Interest set forth hereinabove will be issued to the designated transferee or
transferees.
K-4
No transfer of a Certificate will be made unless such transfer is
exempt from or is made in accordance with the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws. No transfer, sale, pledge or other disposition of a
Junior Subordinate Certificate shall be made unless such transfer, sale,
pledge or other disposition is made in accordance with Section 5.1(e) or
Section 5.1(f) of the Pooling Agreement. Each Person who, at any time,
acquires any ownership interest in any Junior Subordinate Certificate shall be
deemed by the acceptance or acquisition of such ownership interest to have
agreed to be bound by the provisions of such Section 5.1(e) and Section
5.1(f), as applicable. No transfer of a Junior Subordinate Certificate shall
be deemed to be made in accordance with such Section 5.1(e) unless such
transfer is made pursuant to an effective registration statement under the
Securities Act or unless the Trustee and the Certificate Registrar are
provided with the certificates and an Opinion of Counsel, if required, on
which the Trustee and the Certificate Registrar may conclusively rely, which
establishes or establish to the Trustee's and the Certificate Registrar's
satisfaction that such transfer is exempt from the registration requirements
under the Securities Act, as follows: In the event that a transfer is to be
made in reliance upon an exemption from the Securities Act, the Trustee and
the Certificate Registrar shall require, in order to assure compliance with
the Securities Act, that the Certificateholder desiring to effect such
transfer certify to the Trustee and the Certificate Registrar in writing, in
substantially the form attached as Exhibit F to the Pooling Agreement, the
facts surrounding the transfer, with such modifications to such Exhibit F as
may be appropriate to reflect the actual facts of the proposed transfer, and
that the Certificateholder's proposed transferee certify to the Trustee and
the Certificate Registrar in writing, in substantially the form attached as
Exhibit G to the Pooling Agreement, the facts surrounding the transfer, with
such modifications to such Exhibit G as may be appropriate to reflect the
actual facts of the proposed transfer. If such certificate of the proposed
transferee does not contain substantially the substance of Exhibit G, the
Trustee and the Certificate Registrar shall require an Opinion of Counsel
satisfactory to it that such transfer may be made without registration, which
Opinion of Counsel shall not be obtained at the expense of the Trustee, the
Certificate Registrar, the Trust Fund or the Depositor.
Transfers of the Junior Subordinate Certificates may also be made in
accordance with Section 5.1(f) of the Pooling Agreement. To effectuate a
Certificate transfer in accordance with such Section 5.1(f), the proposed
transferee of such Certificate must provide the Trustee, the Certificate
Registrar and the Depositor with an investment letter substantially in the
form of Exhibit L attached to the Pooling Agreement, which investment letter
shall not be an expense of the Trustee, the Certificate Registrar or the
Depositor, and which investment letter states that, among other things, such
transferee (i) is a "qualified institutional buyer" as defined under Rule
144A, acting for its own account or the accounts of other "qualified
institutional buyers" as defined under Rule 144A, and (ii) is aware that the
proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act provided by Rule 144A. Notwithstanding
the foregoing, the proposed transferee of such Certificate shall not be
required to provide the Trustee, the Certificate Registrar or the Depositor
with Annex 1 or Annex 2 to the form of such Exhibit L if the Depositor so
consents prior to each such transfer. Such transfers shall be deemed to have
complied with the requirements of Section 5.1(f) of the Pooling Agreement. The
Holder of a Certificate desiring to effect such transfer does hereby agree to
indemnify the Trustee, and the Certificate Registrar, the Depositor, and the
Certificate Registrar against any liability that may result if transfer is not
made in accordance with the Pooling Agreement.
K-5
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of Authorized
Denominations evidencing the same aggregate interest in the portion of the
Available Distribution Amount distributable on this Class of Certificate, as
requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Depositor, the Certificate Registrar, the Certificate
Administrator, the Servicer, the Trustee and any agent of any of them may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Certificate Registrar,
the Certificate Administrator, the Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The respective obligations and responsibilities of the Servicer and
the Trustee created under the Pooling Agreement (other than the obligation to
make payments to Certificateholders as set forth therein) shall terminate upon
the earlier of (i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Loan remaining in the Trust Fund and
the disposition of all property acquired in respect of any Loan or (ii) the
purchase by the Class R Certificateholder of all Loans at a price established
pursuant to the Pooling Agreement; provided, however, that in no event shall
the trust created hereby continue beyond 21 years from the death of the
survivor of certain persons identified in the Pooling Agreement.
K-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably constitutes
and appoints ________________________________ Attorney to transfer said
Certificate on the Certificate Register, with full power of substitution in the
premises.
Dated: __________________________ ____________________________________
Signature Guaranteed
____________________________________
NOTICE:
The signature to this assignment must correspond
with the name as written upon the face of the
within instrument in every particular, without
alteration or enlargement or any change whatever.
K-7
EXHIBIT L
---------
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
_________________________
_________________________
_________________________
_________________________
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of
the Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or any disposition of the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Rule 144A Securities under the Securities Act
of 1933, as amended (the "1933 Act"), or that would render the disposition of
the Rule 144A Securities in violation of Section 5 of the 1933 Act or require
registration pursuant thereto, and that the Seller has not offered the Rule
144A Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee, the Certificate Registrar and the Servicer (as defined in
the Pooling and Servicing Agreement (the "Agreement") dated as of February 1,
2002 between ABN AMRO Mortgage Corporation, as Depositor, ABN AMRO Mortgage
Group, Inc., as Servicer, and JPMorgan Chase Bank, as Trustee) pursuant to
Section 5.1(f) of the Agreement, as follows:
(a) The Buyer understands that the Rule 144A Securities have
not been registered under the 1933 Act or the securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Rule 144A Securities.
(c) The Buyer has received and reviewed the Private
Placement Memorandum dated as of February 26, 2002 relating to the Rule 144A
Securities and has been furnished with all information
L-1
regarding the Rule 144A Securities that it has requested from the Seller, the
Trustee, the Depositor or the Servicer.
(d) Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner,
or made any general solicitation by means of general advertising or in any
other manner, or taken any other action, that would constitute a distribution
of the Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the 1933
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with respect
to the Rule 144A Securities.
(e) The Buyer is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act and has (1) completed either
of the forms of certification to that effect attached hereto as Annex 1 or
Annex 2, or (2) obtained the waiver of the Depositor with respect to Annex 1
and Annex 2 pursuant to Section 5.1(f) of the Agreement. The Buyer is aware
that the sale to it is being made in reliance on Rule 144A. The Buyer is
acquiring the Rule 144A Securities for its own account or the accounts of
other qualified institutional buyers, understands that such Rule 144A
Securities may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance
on Rule 144A, or (ii) pursuant to another exemption from registration under
the 1933 Act.
(f) The Buyer is not affiliated with (i) the Trustee or (ii)
any Rating Agency that rated the Rule 144A Securities.
(g) If applicable, the Buyer has complied, and will continue
to comply, with the guidelines established by Thrift Bulletin 12 issued
December 13, 1988, by the Office of Regulatory Activities of the Federal Home
Loan Bank System.
[Required only in the case of a transfer of a Class B-3, Class B-4,
Class B-5 Certificate][3. The Buyer warrants and represents to, and covenants
with, the Seller, the Servicer, the Certificate Registrar and the Depositor
that (1) the Buyer is not an employee benefit plan (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), subject to the prohibited transaction provisions of ERISA
("Plan"), or a plan (within the meaning of Section 4975(e)(1) of the Internal
Revenue Code of 1986 ("Code")) subject to Section 4975 of the Code (also a
"Plan"), and the Buyer is not directly or indirectly purchasing the Rule 144A
Securities on behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with "plan assets" of any Plan, or (2) the Buyer has provided
the Seller, the Servicer, the Certificate Registrar and the Depositor with an
Officer's Certificate signed by a Responsible Officer of the Buyer stating
that the Buyer is an insurance company using assets of an
L-2
"insurance company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60) to effect such purchase
and is eligible for, and satisfies all of the requirements for exemptive
relief under Sections I and III of PTCE 95-60, which Officer's Certificate
shall not be an expense of the Servicer or the Depositor.]
3. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when
so executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same document.
L-3
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
-------------------------------- ------------------------------
Print Name of Seller Print Name of Buyer
By: By:
-------------------------------- -------------------------------
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification
No.: No.:
-------------------------------- ---------------------------------
Date: Date:
------------------------------- ---------------------------------
L-4
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice- President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $ (2)/ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
__________ Corporation, etc. The Buyer is a corporation (other than
a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
__________ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
__________ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution,
which is supervised and examined by a State or Federal
authority having supervision over any such institutions
or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements.
__________ Broker-Dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
--------
(2)/ Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
L-1-1
___________ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a
similar official or agency of a State or territory or
the District of Columbia.
___________ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its
political subdivisions, for the benefit of its
employees.
__________ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and is
subject to the fiduciary responsibility provisions of
ERISA.
__________ Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
__________ SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment
Act of 1958.
__________ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940.
__________ Trust Fund. The Buyer is a trust fund whose trustee is a
bank or trust company and whose participants are
exclusively (a) plans established and maintained by a
State, its political subdivision, or any agency or
instrumentality of the State or its political
subdivision, for the benefit of its employees, or (b)
employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, but
is not a trust fund that includes as participants
individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject
to a repurchase agreement and (vii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are consolidated with
the Buyer in its financial statements prepared in accordance with
L-1-2
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
______ ______ Will the Buyer be purchasing the Rule 144A Securities
Yes No only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the
Buyer agrees that, in connection with any purchase of securities sold to the
Buyer for the account of a third party (including any separate account) in
reliance on Rule 144A, the Buyer will only purchase for the account of a third
party that at the time is a "qualified institutional buyer" within the meaning
of Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently
meets the definition of "qualified institutional buyer" set forth in Rule
144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of the
date of such purchase.
------------------------------------
Print Name of Buyer
By:
--------------------------------
Name:
Title:
Date:
------------------------------
L-1-3
Annex 2 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice-President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A
under the Securities Act of 1933 ("Rule 144A") because Buyer is a part of a
Family of Investment Companies (as defined below), is such an officer the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used.
____ The Buyer owned $__________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser in a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement and
(vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because
L-2-1
one or more sales to the Buyer will be reliance on Rule 144A. In addition, the
Buyer will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
---------------------------------------------
Print Name of Buyer
By:
-----------------------------------------
Name:
Title:
Date:
-----------------------------------------
IF AN ADVISER
---------------------------------------------
Print Name of Buyer
By:
-----------------------------------------
Name:
Title:
Date:
-----------------------------------------
(SEAL)
L-2-2
EXHIBIT M
---------
[RESERVED]
M-1
EXHIBIT N
---------
[RESERVED]
N-1
EXHIBIT O
---------
[RESERVED]
O-1
EXHIBIT P
---------
[RESERVED]
P-1
EXHIBIT Q
---------
BLOOMBERG DATA
Loan Number
Property Type
Owner Occupied
Loan Purpose
Loan Type
Current Interest Rate
Original Balance
Current Balance
First Payment Date
Maturity Date
Current PNI
Servicing Fee
Loan Term
Foreclosure/REO
Loan to Value Ratio
State Code
Interest Paid to Date
Zip Code
PIF Data
Amortized Remaining Term
Q-1
EXHIBIT R
---------
FORM OF SPECIAL SERVICING AGREEMENT
-----------------------------------
This SPECIAL SERVICING AGREEMENT (the "Agreement") is made and entered
into as of ____________ 1, 20__, between _______________, as seller and master
servicer (the "Company"), _______________, as holder of the Class B
Certificates identified on Schedule I (the "Class B Holder") and
_______________, [an affiliate of the Class B Holder,] as special servicer
(the "Special Servicer").
PRELIMINARY STATEMENT
WHEREAS, the Class B Holder is the holder of at least 75% of each the
classes of Mortgage Pass- Through Certificates (each a "Class B Certificate")
of the series of issuances (each a "Series") issued by the Company identified
on Schedule I attached hereto (such Schedule I, as may be modified or amended
to reflect (i) the purchase from time to time by the Class B Holder of
interests in any class of Class B Certificates of a Series such that the Class
B Holder owns not less than 75% of the then outstanding Certificate Principal
Balance of such Class B Certificates and (ii) the sale from time to time of
the Class B Holder of interests in any class of Class B Certificates of a
Series such that the Class B Holder owns less than 75% of the then outstanding
Certificate Principal Balance of such Class B Certificates, the "Schedule I").
WHEREAS, each of the Class B Certificates was issued by the Company
pursuant to the Pooling and Servicing Agreement or Agreements (each a "Pooling
and Servicing Agreement") identified on Schedule I and evidences an ownership
interest in a pool of Mortgage Loans.
WHEREAS, the Company is the Master Servicer of the Mortgage Loans
related to each Series and the Mortgage Loans are serviced in accordance with
the applicable Pooling and Servicing Agreement [and the Company's [Servicer
Guide] (the "Servicer Guide")].
WHEREAS, in connection with the purchase by Class B Holder of a Series
of Class B Certificates (whether owned by the Class B Holder on the date
hereof or purchased by the Class B Holder at any time in the future), the
Class B Holder and the Company have agreed that (i) the Class B Holder, if it
owns 75% of the most subordinate outstanding class of Class B Certificates of
a Series (calculated by dividing the then outstanding Certificate Principal
Balance of such Class B Certificates by the then outstanding Certificate
Principal Balance of all certificates of the same class) may elect to have
certain Mortgage Loans with respect to the related Series that become 90 or
more days delinquent (each such Mortgage Loan, a "Delinquent Mortgage Loan")
serviced by the Special Servicer (each such Delinquent Mortgage Loan, a
"Specially Serviced Mortgage Loan"), and (ii) with respect to Delinquent
Mortgage Loans other than Specially Serviced Mortgage Loans, the Company will
provide to the Class B Holder such information as is generated [pursuant to
the terms of the Servicer Guide] by the Company or a subservicer with respect
to such Delinquent Loan.
R-1
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the Company, the Class B Holder and the Special
Servicer hereby agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
Section 1.01 Definitions Incorporated by Reference.
-------------------------------------
Capitalized terms used but not otherwise defined in this Agreement
shall have the respective meaning ascribed thereto as set forth in the related
Pooling and Servicing Agreement [or the Servicer Guide, as the context may
require].
ARTICLE II
----------
DESIGNATION OF SPECIALLY SERVICED MORTGAGE LOANS AND SPECIAL
------------------------------------------------------------
SERVICING PROCEDURES
--------------------
Section 2.01 [Approval of _______________ as an Approved Servicer
under the Servicer Guide.
The Company hereby approves _______________ as an approved servicer for
all purposes under the terms of the Servicer Guide.]
Section 2.02 Specially Serviced Mortgage Loans.
---------------------------------
To the extent and for so long as the Class B Certificates of a Series
are outstanding and the Class B Holder owns at least 75% of the most
subordinate outstanding class of the Class B Certificates of such Series
(calculated by dividing the then outstanding Certificate Principal Balance of
such Class B Certificates by the then outstanding Certificate Principal
Balance of all certificates of the same class), Delinquent Mortgage Loans of
the related Series may, at the option of the Class B Holder, be designated in
writing by the Class B Holder as Specially Serviced Mortgage Loans and
transferred to the Special Servicer for servicing. The Special Servicer shall
service the Specially Serviced Mortgage Loans in accordance with the terms of
the related Pooling and Servicing Agreement [and the Servicer Guide].
Following the designation of a Delinquent Mortgage Loan as a Specially
Serviced Loan, the Company shall transfer servicing of such Delinquent
Mortgage Loan to the Special Servicer substantially in the manner set forth
herein and in Schedule II hereto. [The parties hereto agree that any fees
resulting from the transfer of the servicing of a Delinquent Mortgage Loan
from the Company or a subservicer to the Special Servicer (or any successor
thereto) shall be the obligation of the Company.]
As of the Effective Date (as defined below) of each Specially Serviced
Mortgage Loan, the Special Servicer shall succeed to and undertake all rights,
duties and obligations of the prior servicer (including, without limitation,
the making of advances, any right to purchase such Specially Serviced Mortgage
Loan
R-2
at the purchase price set forth in the related Pooling and Servicing Agreement
and the right to receive the servicing fee with respect to such Specially
Serviced Mortgage Loan) pursuant to and in accordance with the terms of the
related Pooling and Servicing Agreement [and the terms and conditions of the
Servicer Guide].
With respect to each Specially Serviced Mortgage Loan, the effective
date (the "Effective Date") shall be the first day of the month immediately
following the month of designation of such Specially Serviced Mortgage Loan as
such, provided that such written designation is received by the Company on or
prior to the 15th calendar day of such month.
Once a Delinquent Mortgage Loan becomes a Specially Serviced Mortgage
Loan, such Delinquent Mortgage Loan shall remain a Specially Serviced Mortgage
Loan, and shall continue to be serviced by the Special Servicer, until the
earlier of the liquidation or other disposition of such Specially Serviced
Mortgage Loan or the termination of this Agreement, regardless of delinquency
status, whether the related Mortgaged Property becomes an REO Property or
otherwise; provided, however, that if the Company exercises its right as
Master Servicer to purchase all of the Mortgage Loans in a Trust Fund pursuant
to an optional termination provision under the related Pooling and Servicing
Agreement, the servicing of any related Specially Serviced Mortgage Loans with
respect to which foreclosure proceedings have not been commenced shall be
transferred promptly by the Special Servicer in accordance with written
instructions from the Company.
If the Class B Holder (i) transfers such percentage interest in any
Class B Certificates of a Series such that the Class B Holder owns less than
75% of the then outstanding Certificate Principal Balance of such class, or
(ii) purchases such percentage interest in any Class B Certificates of a
Series such that the Class B Holder owns 75% or more of the then outstanding
Certificate Principal Balance of such class, the Class B Holder shall promptly
notify the Company and the Special Servicer in writing of any such transfer or
acquisition. Upon receipt of written notice from the Class B Holder, the
Company or the Class B Holder shall revise Schedule I hereto to reflect any
such transfer or acquisition and shall forward promptly a copy of such revised
schedule to the Company or the Class B Holder, as applicable, and the Special
Servicer. With respect to the purchase of at least 75% of the Class B
Certificates of any Series by the Class B Holder after the date hereof, this
Agreement shall be effective as of the date such written notice of acquisition
is received by the Company.
If and to the extent the Company is permitted to purchase Delinquent
Mortgage Loans under the related Pooling and Servicing Agreement, the Class B
Holder may direct the Company to purchase any Specially Serviced Mortgage Loan
and to promptly resell such Mortgage Loan to the Class B Holder at the price
and on the terms set forth in such Pooling and Servicing Agreement. In the
event the Class B Holder directs the Company to purchase a Specially Serviced
Mortgage Loan as permitted under this Section, the Company shall promptly take
all action necessary under the terms of the related Pooling and Servicing
Agreement in order to accomplish such purchase (i.e. provide notification to
the Trustee and/or Custodian) and to resell such Specially Serviced Mortgage
Loan to the Class B Holder. The Class B Holder, and not the Company, shall be
required to remit the purchase price for such Specially Serviced Mortgage Loan
to the related Trustee. The Company will inform the Trustee in writing of the
purchase of such Specially
R-3
Serviced Mortgage Loan by the Class B Holder and further shall promptly take
all actions necessary or desirable to effect the conveyance of such Mortgage
Loan and the related servicing rights to the Class B Holder or its designee,
time being of the essence.
Notwithstanding any provision herein to the contrary, the Special
Servicer shall (i) in no event be obligated to effect any cure or remedy in
connection with a deficiency in the documentation for any Specially Serviced
Mortgage Loan to the extent such deficiency existed at the time such Mortgage
Loan became a Specially Serviced Mortgage Loan or (ii) have any responsibility
for any obligations, duties, or liabilities of the Company with respect to the
servicing of a Specially Serviced Mortgage Loan that arose prior to the
related Effective Date for such Specially Serviced Mortgage Loan, other than
those which would customarily be assumed after the Effective Date.
Section 2.03 Termination of Special Servicer for Default.
-------------------------------------------
The Company shall have the right, immediately upon written notice, to
terminate the Special Servicer's right and obligation to subservice all of the
Specially Serviced Mortgage Loans hereunder in the event (each such event, an
"Event of Default") of:
(i) any failure by the Special Servicer to remit to the Company for
distribution to the Certificateholders of a Series any payment (including
without limitation, any failure to make any required Advance) required to be
made under the terms of this Agreement or the related Pooling and Servicing
Agreement which continues unremedied for a period of one day after the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been given to the Special Servicer by the Company; or
(ii) any failure on the part of the Special Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on
the part of the Special Sub-Servicer contained in this Agreement (including
any breach of the Special Servicer's representations and warranties contained
in Section 4.03 hereof, which materially and adversely affects the interests
of the Certificateholders of a Series) which continues unremedied for a period
of 30 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Special Servicer by the
Company; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or 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
Special Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Special Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Special Servicer or of or relating to all or substantially all of its
property; or
R-4
(v) the Special Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of
or otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations.
If an Event of Default shall occur, then, and in each and every such
case, upon receipt of written notice from the Company, the Special Servicer
shall immediately remit to the Company all amounts in the Collection Accounts
and the Escrow Accounts and all rights of the Special Servicer to service the
Specially Serviced Mortgage Loans shall terminate. Following the receipt of
written notice from the Company as provided above, all authority and power of
the Special Sub-Servicer to subservice all the Specially Serviced Mortgage
Loans shall pass to and be vested in the Company pursuant to and under this
Section 2.03, and the Special Servicer shall do all things necessary to effect
a transfer of the servicing rights back to the Company. In this regard, the
Company is hereby authorized and empowered to execute and deliver, on behalf
of the Special 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 affected Specially Serviced Mortgage Loans and related documents, or
otherwise. The Special Servicer agrees to cooperate with the Company in
implementing the termination of the Special Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Company
or its appointed agent for administration by it of all amounts in the
possession of the Special Servicer or thereafter be received with respect to
the Specially Serviced Mortgage Loans and the transfer of the] servicing
rights back to the Company.
Section 2.04 Appointment of Successor Special Servicer.
-----------------------------------------
The Class B Holder shall have the right, upon 90 days prior written
notice to the Company and the Special Servicer appoint a successor special
servicer having the characteristics set forth in clauses (i), (ii) and (iii)
below, and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Special Servicer under this
Agreement simultaneously with the termination of the Special Servicer's
responsibilities, duties and liabilities under this Agreement. In the event
that the Special Servicer's duties, responsibilities and liabilities under
this Agreement should be terminated pursuant to the foregoing, the Special
Servicer shall discharge such duties and responsibilities during the period
from the date it acquires knowledge of such termination until the effective
date thereof with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The removal of the Special Servicer shall not become effective
until a successor shall be appointed pursuant to this Section and shall in no
event relieve the Special Servicer of the representations and warranties made
pursuant to Section 4.03 and the remedies available to the Class B Holder
and/or the Company under Sections 4.04 and 5.01, it being understood and
agreed that the provisions of such Sections 4.04 and 5.01 shall be applicable
to the Special Servicer notwithstanding any such termination of it, or the
termination of this Agreement.
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Any successor special servicer shall (i) [be an institution having a
net worth of not less than $1,000,000][meet the eligibility requirements of an
approved servicer under the Company's Servicer Guide], (ii) the appointment of
such successor servicer will not result in the downgrading in any rating by
any applicable rating agency of any security issued in connection with the
applicable Pooling and Servicing Agreements, and (iii) have and keep in full
effect its existence, rights and franchises as a corporation (or such other
corporate form), and shall obtain its qualification to do business as a
foreign corporation (or such other corporate form) 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 Specially Serviced Mortgage
Loans and to perform its duties under this Agreement. Any successor appointed
as provided herein shall execute, acknowledge and deliver to the Class B
Holder and the Company an instrument accepting such appointment, wherein the
successor shall make the representations and warranties set forth in Section
4.03, whereupon such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the Special
Servicer, with like effect as if originally named as a party to this
Agreement.
Within 30 days of the appointment of a successor special servicer by
the Class B Holder, the Special Servicer shall prepare, execute and deliver to
the successor entity any and all documents and other instruments, place in
such successor's possession all servicing files related to the Specially
Serviced Mortgage Loans, and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination
[, including but not limited to the transfer and endorsement of the related
Mortgage Notes and other documents, and the Class B Holder shall do or cause
to be done the preparation and recordation of Assignments of Mortgage and
Deeds at the Class B Holder's sole expense].
The Special Servicer shall cooperate with the Class B Holder and such
successor in effecting the termination of the Special Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor special servicer, including without
limitation, the transfer to such successor of all amounts received by it with
respect to the Specially Serviced Mortgage Loans. Further, the Special
Servicer shall execute and deliver such instruments and do such other things
as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Special Servicer.
ARTICLE III
DELINQUENT MORTGAGE LOANS OTHER THAN SPECIALLY SERVICED
-------------------------------------------------------
MORTGAGE LOANS
--------------
Section 3.01 Reporting of Delinquent Mortgage Loans.
--------------------------------------
(a) To the extent and for so long as the Class B Certificates of a Series are
outstanding and any interest in such Class B Certificates is held by the Class
B Holder, the Company, as Master Servicer of the Mortgage Loans related to
each Series, hereby agrees to provide to the Class B Holder the following
notices and reports:
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Within three (3) Business Days after each Distribution Date (or
included in or with the monthly statements to Certificateholders pursuant to
the related Pooling and Servicing Agreement), the Company shall provide to the
Class B Holder a report, in tape format, containing the following information:
(1) With respect to each Series, the number and aggregate Principal Balance
of the Mortgage Loans delinquent one, two and three months or more,
together with the Principal Balance of each Mortgage Loan delinquent,
one, two and three months or more;
(2) With respect to each Series, the (i) number and aggregate Principal
Balance of Mortgage Loans with respect to which foreclosure proceedings
have been initiated, and (ii) the number and aggregate book value of
Mortgaged Properties acquired through foreclosure, deed in lieu of
foreclosure or other exercise of rights respecting the Trustee's
security interest in the Mortgage Loans, and with respect to each
Mortgage Loan, the (i) Principal Balance of each such Mortgage Loan
with respect to which foreclosure proceedings have been initiated, and
(ii) the book value of each Mortgaged Property acquired through
foreclosure, deed in lieu of foreclosure or other exercise of rights
respecting the Trustee's security interest in the related Mortgage
Loan; and
(3) With respect to each Series, the amount of Realized Losses allocable to
the Certificates on the related Distribution Date and the cumulative
amount of Realized Losses allocated to such Certificates since the
Cut-off Date, and with respect to each Mortgage Loan, the amount of
Realized Losses attributable to such Mortgage Loan on the related
Distribution Date and the cumulative amount of Realized Losses
attributable to such Mortgage Loan since the Cut-off Date.
In addition, the Company, as Master Servicer of the Mortgage Loans, shall
send, or shall cause the related servicer to send, to the Class B Holder all
other written reports, documentation, instruments, certificates and
correspondences provided by a servicer under the terms of the Servicer Guide
with respect to any Mortgage Loan that becomes sixty (60) days or more
delinquent.
(b) If requested by the Class B Holder, the Company shall make its
servicing personnel available to respond to reasonable inquiries, by phone or
in writing by facsimile, electronic, or overnight mail transmission, in
connection with any Mortgage Loan identified in any report or document
provided pursuant to clause (a) above; provided, that the Company shall only
be required to provide information that is reasonably accessible to its
servicing personnel (or its subservicers).
(c) In addition to the information described above, the Company shall
provide to the Class B Holder such information as the Class B Holder may
reasonably request; provided, however, that the Mortgage Loans are Delinquent
Mortgage Loans or the Mortgaged Property has been foreclosed upon. The Class B
Holder will reimburse the Company for any reasonable out-of-pocket expenses
incurred by it in providing such information.
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Section 3.02 Servicing of Delinquent Mortgage Loans.
--------------------------------------
(a) Prior to the Commencement of Foreclosure of any Mortgage Loan, the
Company shall provide, or cause the related servicer to provide, the Class B
Holder with a notice (sent by telecopier) of such proposed and imminent
foreclosure, stating the loan number and the aggregate amount due under the
Mortgage Note.
For purposes of this Agreement, "Commencement of Foreclosure" shall
mean the first official action required under local law in order to commence
foreclosure proceedings or to schedule a trustee's sale under a deed of trust,
including (i) in the case of a mortgage, any filing or service of process
necessary to commence an action to foreclosure, or (ii) in the case of a deed
of trust, posting, the publishing, filing or delivery of a notice of sale, but
not including in either case (x) any notice of default, notice of intent to
foreclose or sell or any other action prerequisite to the actions specified in
(i) or (ii) above, (y) the acceptance of a deed-in-lieu of foreclosure
(whether in connection with a sale of the related property or otherwise) or
(z) initiation and completion of a short pay-off.
(b) In connection with any Delinquent Mortgage Loan with respect to
which a notice under clause (a) above has been delivered to the Class B
Holder, the Class B Holder shall provide the Company with written direction as
to the action to be taken with respect to such Delinquent Mortgage Loan,
including, without limitation, to proceed with foreclosure, to accept a
deed-in-lieu of foreclosure, to consent to a pre- foreclosure sale of
Mortgaged Property at a loss, or, if permitted under the terms of the related
Pooling and Servicing Agreement, to purchase Delinquent Mortgage Loans. Such
written direction must be received by the Company within two (2) Business Days
of transmission of the notice provided by the Company under clause (a) above.
Such two (2) Business Day period shall be extended for no longer than an
additional three (3) Business Days after the receipt of additional information
requested if the Class B Holder requests additional information related to
such Delinquent Mortgage Loan; provided, however that the Class B Holder will
have at least one Business Day to provide written direction after receipt of
any requested additional information. Any such additional information shall be
provided only to the extent it is obtainable by the Company from existing
reports, certificates or statements or otherwise be reasonably accessible to
its servicing personnel (or subservicing personnel). The Company shall as
promptly as practicable carry out, or cause the relevant servicer to carry
out, the instruction of the Class B Holder in the manner prescribed in such
written direction. The Class B Holder agrees that it has no right to negotiate
directly with the Mortgagor during such period.
In the event the Class B Holder fails to provide any written direction
as provided above, the Company may take any such action as would be consistent
with customary servicing practices of prudent mortgage loan servicers and the
Company's normal policies and practice.
(c) With respect to any Delinquent Mortgage Loan for which the Company
has not provided a notice as contemplated in clause (a) above, the Class B
Holder may, at any time, provide the Company with written direction as to the
action to be taken with respect to such Delinquent Mortgage Loan, including,
without limitation, to commence foreclosure proceedings, to accept a
deed-in-lieu of foreclosure, to consent to a sale of Mortgaged Property at a
loss, or, if permitted under the terms of the related Pooling
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and Servicing Agreement, to purchase Delinquent Mortgage Loans. To the extent
such action is not inconsistent with the terms of the related Pooling and
Servicing Agreement or the Company's duties thereunder as master servicer, the
Company shall as promptly as practicable carry out, or cause the relevant
servicer to carry out, the instruction of the Class B Holder in the manner
prescribed in such written direction.
(d) Any foreclosure of a Delinquent Mortgage Loan that has been
initiated in accordance with clauses (b) or (c) above may be discontinued if
(i) the Mortgage Loan has been brought current or if a refinancing or
prepayment occurs with respect to the Mortgage Loan (including by means of a
short payoff approved by the Class B Holder), (ii) the Company has agreed to
the terms of a forbearance agreement with the Mortgagor and such forbearance
agreement has been approved by the Class B Holder, or (iii) if and to the
extent permitted under the related Pooling and Servicing Agreement, Class B
Holder directs the Company to purchase such Delinquent Mortgage Loan at the
price and on the terms set forth in the related Pooling and Servicing
Agreement.
(e) In the event the Class B Holder directs the Company to purchase a
Delinquent Mortgage Loan as permitted under Sections 2.02 and 3.02 (b), (c)
and (d), the Class B Holder may direct the Company to purchase any Delinquent
Mortgage Loan and to promptly resell such Mortgage Loan to the Class B Holder
at the price and on the terms set forth in the applicable Pooling and
Servicing Agreement. In the event the Class B Holder directs the Company to
purchase a Delinquent Mortgage Loan as permitted under this Section, the
Company shall promptly take all action necessary under the terms of the
related Pooling and Servicing Agreement in order to accomplish such purchase
(i.e. provide notification to the Trustee and/or Custodian) and to resell such
Delinquent Mortgage Loan to the Class B Holder. The Class B Holder, and not
the Company, shall be required to remit the purchase price for such Delinquent
Mortgage Loan to the related Trustee. The Company will inform the Trustee in
writing of the purchase of such Delinquent Mortgage Loan by the Class B Holder
and further shall promptly take all actions necessary or desirable to effect
the conveyance of such Mortgage Loan and the related servicing rights to the
Class B Holder or its designee, time being of the essence. [The parties hereto
agree that, in connection with a purchase of a Delinquent Mortgage Loan as
provided above, any fees resulting from the transfer of the servicing of such
purchased Delinquent Mortgage Loan from the Company or a subservicer to a
servicer designated by the Class B Holder shall be the obligation of the
Company.]
Section 3.03 Review of the Company's Procedures.
----------------------------------
The Company and the Class B Holder hereby agree that the Class B Holder
shall have the right, at its own expense and during normal business hours, to
review any and all of the books, records, or other information of the Company
which may be relevant to the Company's direct collection, loss mitigation
foreclosure and REO management procedures currently in place in order to
confirm that the procedures used by the Company and its subservicers are in
accordance with the customary servicing practices of prudent mortgage loan
servicers. In order to discuss such books, records or other information, the
Company shall make personnel available who are knowledgeable about such
matters.
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ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 4.01 Organizational and Other Related Warranties of the Class B
Holder. The Class B Holder hereby makes the following representations and
warranties to the Company and the Special Servicer:
(i) Organization and Good Standing. The Class B Holder is an
entity duly organized, validly existing, and in good standing under the laws
of its state of incorporation or formation or the laws of the United States.
(ii) No Violation. Neither the execution and delivery by the
Class B Holder of this Agreement, nor the consummation by the Class B Holder
of the transactions contemplated hereby, nor the performance of and compliance
by the Class B Holder with the provisions of this Agreement, will conflict
with or result in a breach or violation of, or constitute a default (or an
event which, with notice or the lapse of time, or both, would constitute a
default) under, the organizational documents (its articles of incorporation or
charter or by-laws) of the Class B Holder, or any of the provisions of any
law, rule, regulation, judgment, decree, demand, or order (of any federal,
state, or local governmental or regulatory authority or court) binding on the
Class B Holder, or any of its respective properties, or any of the provisions
of any indenture, mortgage, contract, instrument, or other document to which
the Class B Holder is a party or by which it is bound, or result in the
creation or imposition of any lien, charge, or encumbrance upon any of their
respective properties pursuant to the terms of any indenture, mortgage,
contract, instrument, or other document. The Class B Holder is not otherwise
in violation of any law, rule, regulation, judgment, decree, demand, or order
(of any federal, state or local governmental or regulatory authority or
court), which violation, in the Class B Holder's, good faith and reasonable
judgment, is likely to affect materially and adversely its ability to perform
its obligations hereunder.
(iii) Authorization and Enforceability. The execution and
delivery by the Class B Holder of this Agreement, the consummation of the
transactions contemplated hereby, and the performance and compliance by the
Class B Holder with the terms hereof are within the powers of the Class B
Holder, and have been duly authorized by all necessary action on the part of
the Class B Holder. All organizational resolutions and consents necessary for
the Class B Holder to enter into and consummate all transactions contemplated
hereby have been obtained. This Agreement has been duly executed and delivered
by the Class B Holder and constitutes the legal, valid and binding obligation
of the Class B Holder, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium, and
other similar laws affecting creditors' rights generally, and to general
principles of equity, regardless of whether such enforcement is considered in
a proceeding in equity or at law. The Class B Holder has not failed to obtain
any consent, approval, authorization, or order of, or failed to cause any
registration or qualification with, any court or regulatory authority or other
governmental body having jurisdiction over it, which consent, approval,
authorization, order, registration, or qualification is required for, and the
absence of which would materially adversely affect, the legal and valid
execution, delivery, and performance of this Agreement by the Class B Holder.
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(iv) No Litigation or Adverse Conditions. No litigation is
pending or, to the best of the Class B Holder's knowledge, threatened against
it, which, if determined adversely to the Class B Holder would prohibit the
Class B Holder from entering into this Agreement or, in the good faith and
reasonable judgment of the Class B Holder, is likely to materially and
adversely affect either the ability of the Class B Holder to perform its
obligations hereunder.
Section 4.02 Organizational and Other Related Warranties of the
Company. The Company hereby makes the following representations and warranties
to the Class B Holder and the Special Servicer:
(i) Organization and Good Standing. The Company is an entity
duly organized, validly existing, and in good standing under the laws of its
state of incorporation or formation or the laws of the United States, and is
in compliance with the laws of each state in which any property is located to
the extent necessary to ensure the enforceability of each Mortgage Loan and to
perform its obligations hereunder and the Pooling and Servicing Agreement.
(ii) No Violation. Neither the execution and delivery by
Company of this Agreement, nor the consummation by it of the transactions
contemplated hereby, nor the performance of and compliance by the Company with
the provisions hereof or of the Pooling and Servicing Agreement, will conflict
with or result in a breach or violation of, or constitute a default (or an
event which, with notice or the lapse of time, or both, would constitute a
default) under, the organizational documents (its articles of incorporation or
charter or by-laws) of the Company, or any of the provisions of any law, rule,
regulation, judgment, decree, demand, or order (of any federal, state, or
local governmental or regulatory authority or court) binding on the Company,
or any of its properties, or any of the provisions of any indenture, mortgage,
contract, instrument, or other document (including, without limitation, any
Pooling and Servicing Agreement) to which the Company is a party or by which
it is bound, or result in the creation or imposition of any lien, charge, or
encumbrance upon any of their respective properties pursuant to the terms of
any indenture, mortgage, contract, instrument, or other document. The Company
is not otherwise in violation of any law, rule, regulation, judgment, decree,
demand, or order (of any federal, state or local governmental or regulatory
authority or court), which violation, in the Company's good faith and
reasonable judgment, is likely to affect materially and adversely either its
ability to perform its obligations hereunder or under the Pooling and
Servicing Agreements, or the financial condition of the Company.
(iii) Authorization and Enforceability. The execution and
delivery by the Company of this Agreement, the consummation of the
transactions contemplated hereby, and the performance and compliance by the
Company with the terms hereof and of the Pooling and Servicing Agreements are
within the powers of the Company, and have been duly authorized by all
necessary action on the part of the Company. All organizational resolutions
and consents necessary for the Company to enter into and consummate all
transactions contemplated hereby have been obtained. This Agreement has been
duly executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, and other similar laws affecting creditors' rights generally, and
to general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law. The Company has not failed to
obtain any consent, approval, authorization, or order of, or failed to
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cause any registration or qualification with, any court or regulatory
authority or other governmental body having jurisdiction over the Company,
which consent, approval, authorization, order, registration, or qualification
is required for, and the absence of which would materially adversely affect,
the legal and valid execution, delivery, and performance of this Agreement by
the Company.
(iv) Approvals and Permits. The Company possesses such
certificates, authorizations, licenses, and permits issued by the appropriate
state, federal, and foreign regulatory agencies or bodies necessary to conduct
the business now operated by it, and the Company has not received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization, or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling, or finding, would materially
and adversely affect the conduct of the business, operations, financial
condition, or income of the Company.
(v) No Litigation or Adverse Conditions. No litigation is
pending or, to the best of the Company's knowledge, threatened against it,
which, if determined adversely to the Company would prohibit the Company from
entering into this Agreement or, in the good faith and reasonable judgment of
the Company, is likely to materially and adversely affect either its ability
to perform its obligations hereunder or under the Pooling and Servicing
Agreements or the financial condition of the Company. The Company has no
knowledge of any recent adverse financial condition or event with respect to
itself that, in its good faith and reasonable judgment, is likely to
materially and adversely affect its ability to perform its obligations
hereunder or under the Pooling and Servicing Agreements.
(vi) Fidelity Bond: Errors and Omission Insurance. Each
officer, director, employee, consultant and advisor of the Company with
responsibilities concerning the servicing and administration of the Mortgage
Loans is covered by errors and omissions insurance and fidelity bond insurance
in the amounts and with the coverage required under the related Pooling and
Servicing Agreement for it to maintain. Neither the Company nor any of its
officers, directors, employees, consultants, or advisors involved in the
servicing or administration of the Mortgage Loans has been refused such
coverage or insurance.
Section 4.03 Organizational and Other Related Warranties of the Special
Servicer. The Special Servicer hereby makes the following representations and
warranties to the Company and the Class B Holder:
(i) Organization and Good Standing. The Special Servicer is an
entity duly organized, validly existing, and in good standing under the laws
of its state of incorporation or formation or the laws of the United States,
and is in compliance with the laws of each state in which any property is
located to the extent necessary to ensure the enforceability of each Mortgage
Loan and to perform its obligations hereunder.
(ii) No Violation. Neither the execution and delivery by
Special Servicer of this Agreement, nor the consummation by it of the
transactions contemplated hereby, nor the performance of and compliance by the
Special Servicer with the provisions hereof, will conflict with or result in
a breach
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or violation of, or constitute a default (or an event which, with notice or
the lapse of time, or both, would constitute a default) under, the
organizational documents (its articles of incorporation or charter or by-laws)
of the Special Servicer, or any of the provisions of any law, rule,
regulation, judgment, decree, demand, or order (of any federal, state, or
local governmental or regulatory authority or court) binding on the Special
Servicer, or any of its properties, or any of the provisions of any indenture,
mortgage, contract, instrument, or other document to which the Special
Servicer is a party or by which it is bound, or result in the creation or
imposition of any lien, charge, or encumbrance upon any of their respective
properties pursuant to the terms of any indenture, mortgage, contract,
instrument, or other document. The Special Servicer is not otherwise in
violation of any law, rule, regulation, judgment, decree, demand, or order (of
any federal, state or local governmental or regulatory authority or court),
which violation, in the Special Servicer's good faith and reasonable judgment,
is likely to affect materially and adversely either its ability to perform its
obligations hereunder, or the financial condition of the Special Servicer.
(iii) Authorization and Enforceability. The execution and
delivery by the Special Servicer of this Agreement, the consummation of the
transactions contemplated hereby, and the performance and compliance by the
Special Servicer with the terms hereof are within the powers of the Special
Servicer, and have been duly authorized by all necessary action on the part of
the Special Servicer. All organizational resolutions and consents necessary
for the Special Servicer to enter into and consummate all transactions
contemplated hereby have been obtained. This Agreement has been duly executed
and delivered by the Special Servicer and constitutes the legal, valid and
binding obligation of the Special Servicer, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting creditors' rights
generally, and to general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law. The Special
Servicer has not failed to obtain any consent, approval, authorization, or
order of, or failed to cause any registration or qualification with, any court
or regulatory authority or other governmental body having jurisdiction over
the Special Servicer, which consent, approval, authorization, order,
registration, or qualification is required for, and the absence of which would
materially adversely affect, the legal and valid execution, delivery, and
performance of this Agreement by the Special Servicer.
(iv) Approvals and Permits. The Special Servicer possesses
such certificates, authorizations, licenses, and permits issued by the
appropriate state, federal, and foreign regulatory agencies or bodies
necessary to conduct the business now operated by it, and its has not received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization, or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling, or finding, would
materially and adversely affect the conduct of the business, operations,
financial condition, or income of the Special Servicer.
(v) No Litigation or Adverse Conditions. No litigation is
pending or, to the best of the Special Servicer's knowledge, threatened
against it, which, if determined adversely to the Special Servicer would
prohibit the Special Servicer from entering into this Agreement or, in the
good faith and reasonable judgment of the Special Servicer, is likely to
materially and adversely affect either its ability to perform its obligations
hereunder or the financial condition of the Special Servicer. The Special
Servicer has no knowledge of any recent adverse financial condition or event
with respect to itself that, in its good faith
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and reasonable judgment, is likely to materially and adversely affect its
ability to perform its obligations hereunder.
(vi) Fidelity Bond, Errors and Omission Insurance. Each
officer, director, employee, consultant and advisor of the Special Servicer
with responsibilities concerning the servicing and administration of the
Mortgage Loans is covered by errors and omissions insurance and fidelity bond
insurance in the amounts and with the coverage required under the related
Pooling and Servicing Agreement to be maintained by the Company as master
servicer. Neither the Special Servicer nor any of its officers, directors,
employees, consultants, or advisors involved in the servicing or
administration of the Mortgage Loans has been refused such coverage or
insurance.
(vii) Approved Seller/Servicer. The Special Servicer is
approved as a seller/servicer of single-family mortgage loans by the
Department of Housing and Urban Development.
Section 4.04 Remedies for Breach of Representation and Warranty.
--------------------------------------------------
Upon discovery by any of the Company, the Class B Holder or the Special
Servicer of a breach of any of the representations and warranties contained in
Article IV which materially and adversely affects the value of the Specially
Serviced Mortgage Loans or Delinquent Mortgage Loans, the party discovering
such breach shall give prompt written notice to the others.
Each of the parties hereto shall indemnify the others and hold each of
them harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of such party's
representations and warranties contained in Article IV. It is understood and
agreed that the obligations to indemnify as provided in this Section 4.04
constitute the sole remedies of each of the Company, Class B Holder and
Special Servicer respecting a breach of any other party's representations and
warranties.
ARTICLE V
---------
MISCELLANEOUS PROVISIONS
------------------------
Section 5.01 Indemnification.
---------------
Each of the Company, the Class B Holder and the Special Servicer (each
as such, an "Indemnifying Party") shall indemnify the other parties hereto
(each as such, an "Indemnified Party") and hold them harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees
and expenses (individually and collectively, the "Claims") that such
Indemnified Party may sustain in any way related to the failure of the
Indemnifying Party to perform its duties in compliance with the terms of this
Agreement; provided, that none of the Company, the Class B Holder or the
Special Servicer or any of the directors, officers, employees or agents of the
Depositor or the Servicer shall be liable for any action taken or for
refraining
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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 Company, the Class B Holder or the Special Servicer against any material
breach of warranties, representations or covenants made herein, or against any
specific liability imposed on such party pursuant hereto, or against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder.
Section 5.02 Amendment.
---------
This Agreement may be amended from time to time by written agreement
signed by each of the parties hereto.
Section 5.03 Counterparts.
------------
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 5.04 Governing Law.
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This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 5.05 Notices.
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All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
(i) in the case of the Company,
Company
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the
Class B Holder and the Special Servicer in writing.
(ii) in the case of the Class B Holder,
Address: ___________________
Attention: ___________________
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Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the
Company in ▇▇▇▇▇▇▇.▇▇ the case of the Special Servicer,
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the
Company in writing.
Section 5.06 Termination.
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This Agreement shall terminate (i) at such time as the Principal
Balance of the Class B Certificates has been reduced to zero or (ii) if
mutually agreed to by the parties hereto.
Section 5.07 Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, 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. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate in
good faith to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
Section 5.08 Successors and Assigns.
----------------------
This Agreement may not be assigned by any party hereto without the
prior written consent of each of the other parties hereto. The provisions of
this Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto.
Section 5.09 Article and Section Headings.
----------------------------
The article and section headings herein are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
Section 5.10 Confidentiality.
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The Class B Holder agrees that all information supplied by or on behalf
of the Company pursuant to Sections 2.02 or 3.01, including individual account
information, is the property of the Company and the Class B Holder agrees to
use such information only for the purposes contemplated by this Agreement and
otherwise hold such information confidential and not to disclose such
information, except to the extent such information is made publicly available
by or on behalf of the Company or the relevant Trustee.
Section 5.11 Publicly Registered Certificates.
--------------------------------
The Class B Holder agrees, that without the prior written consent of
the Company, so long as Class B Holder is a party to this Agreement and a
holder of any Class B Certificates of a Series, it will not purchase, sell or
trade any publicly registered Certificates of the same Series.
Section 5.12 No Partnership.
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Nothing herein shall be deemed or construed to create a partnership or
joint venture between the parties hereto and the services of the Company shall
be rendered as an independent contractor and not as an agent for the Company.
Section 5.13 Rights of the Class B Holder. Notwithstanding anything
herein to the contrary, it is agreed by the parties hereto that the rights of
the Class B Holder set forth under Article II and Section 3.02(e) of this
Agreement shall relate to, and be exercisable with respect to, the related
Mortgage Loans of any Series to the extent that and for so long as, the Class
B Holder owns at least 75% of the most subordinate outstanding class of Class
B Certificates of the related Series (calculated by dividing the then
outstanding Certificate Principal Balance of such Class B Certificates by the
then outstanding Certificate Principal Balance of all certificates of the same
class).
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IN WITNESS WHEREOF, each of the parties hereto have caused its name to
be signed hereto by its respective officer thereunto duly authorized, all as
of the day and year first above written.
COMPANY
By: _____________________________
Name: ___________________________
Title: ____________________________
By: _____________________________
Name: ___________________________
Title: ____________________________
By: _____________________________
Name: ___________________________
Title: ____________________________
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SCHEDULE I
Describe each Series of Class B Certificates and the related Pooling and
Servicing Agreement
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SCHEDULE II
SPECIAL SERVICING TRANSFER PROCEDURES
Any transfer of servicing with respect to a Specially Serviced
Mortgage Loan shall be effected substantially in accordance with the following
example. All dates set forth below are for illustrative purposes only.
Capitalized terms used in this Exhibit shall have the meanings ascribed
thereto in the Agreement.
Timeline
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Last Business Day of Month One
Mortgagor is 89 Days Delinquent.
3rd Business Day of Month Two
The Company receives an electronic file from its Collections
Department on all 90+delinquent loans.
4th Business Day of Month Two
The Company sends the electronic file to Class B Holder/Special
Servicer of all 90+ delinquent loans with information designating
those loans where a forbearance plan or workout is in progress and
those loans where there is no plan in place. The Company and the
Special Servicer have a discussion. The loans to be transferred are
determined by the Class B Holder/Special Servicer.
6th Business Day of Month Two
The Special Servicer informs the Company of the loans designated as
Specially Serviced Mortgage Loans. The Company and the Special
Servicer coordinate the transfer of servicing of the Specially
Serviced Mortgage Loans. The Company prepares and mails the mortgagor
notification no later than the 13th calendar day of the month. If a
loan reinstates to a current or less than 90 days delinquent status
before the mortgagor notification (i.e., the "goodbye letter") is
sent, such loan will be removed from the transfer, and the Company
will notify the Special Servicer thereof. The borrower will be
instructed to send the payment due on the effective date of transfer
and any past due payments to the Special Servicer.
7th Business Day of Month Two
Relevant Trustee receives monthly electronic data file from the
Company. The subject loan is included in the Company's report as an
active loan serviced by the Company. The Company reports scheduled
P&I on the subject loan.
On or prior to 15th Calendar Day of Month Two
The Company sends a foreclosure referral letter to the Special
Servicer's foreclosure counsel with a corresponding foreclosure
package.
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18th Calendar Day (or Business day immediately preceding the 18th) of Month Two
The Company makes its monthly remittance, including advancing
scheduled P&I payment due for current month for the subject loan.
Last business Day of Month Two
Month-end cut-off.
1st Business Day of Month Three
Effective Date.
On or Before 3rd Business Day of Month Three In accordance with the
Servicing Transfer Instructions:
Company sends Special Servicer final transfer data (e.g., trial
balance, loan files, current and previous 2 years' history records
(if applicable), all default-related correspondence, and all
collection, foreclosure and bankruptcy files);
Company provides Special Servicer with detailed reimbursement request
relating to advances; and
Company sends Special Servicer a check or wire for the net escrow and
unapplied funds.
On or before the 6th Business Day of Month Three
In accordance with the Servicing Transfer Instructions, Special
Service reimburses Company for all outstanding advances, and the
scheduled mortgage payment due on the Effective Date.
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Note:
1. If the loan has been transferred to Special Servicer and it cures,
Special Servicer continues to service the loan and report it to
Company as herein provided.
2. If the Class B Certificates of the related Series are reduced to
zero, Special Servicer will continue to service the mortgage loans
until they payoff or are liquidated. No other Delinquent Mortgage
Loans of a Series will be transferred to Special Servicer after the
Class B Certificates of such Series are reduced to zero.
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Servicing Transfer Instructions
I. NOTIFICATION OF LOANS TO TRANSFER
A. Company will coordinate and provide a listing of all loans past 90 days
delinquent. The list will be provided to Special Servicer for review and
discussion on the 4th Business day of each month.
B. Class B Holder and Special Servicer to agree upon the loans to be
transferred at month-end. The list must be provided via Facsimile or E-mail by
the 6th business day of the month to:
[COMPANY]
[Address and contact]
II. CONVERSION DATA
Dependent upon the volume of loans transferring each month, the loans will be
transferred effective the first of each month based on the prior month-end cut
off by one of the following mutually agreed upon conversion methods.
A. Manual conversion
1. Company to provide a "master file data record" (COMPANY reference
for master file data record?) for each loan (accompanied by a
listing of all code definitions).
2. Company to provide a trial balance containing all the loans.
B. Electronic conversion
1. Information will be provided in a Microsoft Excel spreadsheet (or
such other mutually agreeable format) containing mutually agreed
upon fields.
2. Company to provide a trial balance containing all the loans.
Preliminary information for either a manual or electronic conversion will be
provided within 3 business days of receipt of the List of Loans to Transfer to
provide time for Special Servicer to verify and load the information, with the
exception of the specific data that is determined at the transfer date.
III. HOMEOWNER NOTIFICATION
A. Company will mail the mortgagor notification (good-bye letter) fifteen days
prior to the transfer date. Company will forward a copy of its good-bye letter
to Special Servicer c/o [Dept.] (fax number ___- ___-____) for approval prior
to mailing.
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B. Copies of Company's mortgagor notification letters will be provided to
Special Servicer.
C. Company to receive a sample of Special Servicer's mortgagor notification
(welcome letter) for approval prior to mailing.
IV. HAZARD/FLOOD INSURANCE
A. Company to prepare a change to the mortgagee clause as follows:
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
B. Copies of the mortgagee clause change requests will be provided to Special
Servicer.
C. Any unpaid policies, expiration notices, cancellation notices, loans with
expired policies will be properly identified, sorted and marked for special
handling.
D. Company to provide a list of loans under "force place coverage" program.
Force place hazard insurance policies with ASG will be canceled upon transfer
of the loans. WNC force place flood policy coverage will stay in place after
transfer until the expiration date.
V. FHA LOANS
A. Company to provide screen prints to include the following items on FHA
Loans with a monthly premium.
1. Loan number
2. FHA case number
3. Anniversary date
4. Annual premium
5. Monthly amount
6. Total MIP paid to date
7. Next month the premium is due
B. Company to provide screen prints to include the following items on FHA
loans that the full premium was paid up front.
1. Loan number
2. FHA case number
3. Insuring date
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4. Amount of prepaid premium
C. Company to prepare HUD Form 92080 with Special Servicer's HUD mortgagee
number (72313) and forward to HUD electronically. Proof of submission will be
forwarded to Special Servicer.
VI. CONVENTIONAL LOANS
A. Individual loan PMI certificates will be retained in the Servicing File
B. Company to prepare notifications to the PMI companies requesting a change
of servicer to Special Servicer. Copies will be forwarded to Special Servicer.
C. Company to provide screen prints of all loans with PMI to include:
1. Loan number
2. PMI company
3. PMI certificate number
4. Next due date
5. Last amount paid
VII. REAL ESTATE TAXES
A. Company to forward individual loan tax records showing payee, due dates,
frequency of payment, next due date, last paid date and last paid amount.
B. Company to provide copies of the notifications to the individual tax
authorities and the Tax Service requests for a change of servicer to Special
Servicer under the following contract numbers (Transamerica- 2489 Pinnacle -
119)
C. All property taxes due and payable will be paid prior to the transfer date.
D. All tax bills received after the transfer date will be forwarded to Special
Servicer for payment.
E. Company to provide a listing of any loans with delinquent taxes containing
the pertinent information as of the transfer date.
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VIII. OPTIONAL INSURANCE
A. Company to provide a list of loans with A&H, life insurance, accidental
death insurance, etc., which will include the following information.
1. Loan number
2. Insurance company
3. Type of coverage
4. Amount of monthly premium
5. Last monthly premium paid
B. Company to provide copies of the master and/or individual policies for the
insurance coverage.
C. Company to provide copies of the notification sent to the insurance
companies.
IX. INVESTOR REPORTS
A. Company to provide a copy of the final remittance report to the investor
including a trial balance as of cutoff date.
B. Company to provide ending loan scheduled balance at transfer date.
C. Company to provide a report detailing advanced delinquent net interest
monthly by due date.
D. Company to provide a report detailing advanced delinquent principal monthly
by due date.
X. OTHER
A. Company to provide hardcopies of the last 24 months history for each loan
accompanied by an explanation of transaction codes.
B. Company to provide copies of the last escrow analysis for each loan with an
explanation of analysis method (cushion, etc.).
C. Company to provide the loan servicing file in hardcopy or microfiche
format.
D. Company to provide the currently active collection records and pertinent
information on delinquent loans.
E. Net escrow and unapplied funds as of the transfer date will be sent to
Special Servicer via check or wire within three business days of the transfer,
accompanied by an explanation of Unapplied Funds codes.
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F. The advances (exclusive of escrow advances, which will be handled in
Section X (E) above) incurred by Company will be billed to Special Servicer
accompanied by appropriate documentation. Special Servicer to reimburse
Company via check or wire for all advances (exclusive of escrow advances,
which will be handled in Section X (E) above) on the subject loans within
three business days of receipt of billing.
G. Company to provide a listing containing the mortgagor name, co-mortgagor
name, property address and mailing address for preparation of Special
Servicer's Notification Letters.
H. Company to provide the following items, sorted and clearly marked for
special handling.
1. Active foreclosure and bankruptcy files should have the status shown on
the front of each file.
2. Insurance loss drafts should provide all documentation on the current
status.
3. Unprocessed payoff funds should be accompanied by a copy of the payoff
quotation.
4. Information should be furnished on any pending payoff or assumption.
5. Information on any incomplete partial releases should be provided.
I. Loan payments received after the cutoff will be endorsed to __________ and
forwarded by overnight service to the following address within twenty-four
hours, properly identified with Company's loan number.
[Address]
Returned Items received after the transfer date will be forwarded to Special
Servicer for reimbursement. Special Servicer to reimburse Company within 10
business days of receipt.
J. Company to ship all loan files and documentation related to the individual
transfers by the 3rd business day after the cut-off. Any information, such as
preliminary trial balances, master file data records, delinquency information,
etc. will be furnished as early as possible prior to the transfer date.
All shipments to be sent to:
[Address]
K. Company to furnish all required IRS reporting statements for the current
year up to the transfer date, both to the mortgagors and to the appropriate
government agencies. Special Servicer to furnish all required year-end
reporting commencing on the effective date of transfer through the year-end.
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EXHIBIT A to Schedule II
LOAN INFORMATION TO BE PROVIDED TO COMPANY
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