EXHIBIT 4.1
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EXECUTION
ABN AMRO MORTGAGE CORPORATION
Depositor
and
LASALLE HOME MORTGAGE CORPORATION,
Servicer
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
Trustee
----------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1998
----------------
$244,003,768.84
Mortgage Pass-Through Certificates
SERIES 1998-5
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TABLE OF CONTENTS
PRELIMINARY STATEMENT.................................................................................1
ARTICLE I DEFINITIONS............................................................................4
ARTICLE II CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES.....................................................37
Section 2.1. Conveyance of Trust Fund..............................................................37
Section 2.2. Acceptance by Trustee.................................................................41
Section 2.3. Representations and Warranties of the Depositor.......................................43
Section 2.4. Authentication and Delivery of Certificates; Designation of Certificates as
REMIC Regular and Residual Interests..................................................46
Section 2.5. Designation of Startup Day............................................................48
Section 2.6. No Contributions......................................................................48
Section 2.7. Representations and Warranties of the Servicer........................................48
ARTICLE III ADMINISTRATION AND SERVICING OF LOANS.................................................49
Section 3.1. Servicer to Act as Servicer; Administration of the Loans..............................49
Section 3.2. Collection of Certain Loan Payments; Certificate Account..............................52
Section 3.3. Permitted Withdrawals from the Custodial Account for P&I..............................54
Section 3.4. Taxes, Assessments and Similar Items..................................................56
Section 3.5. Maintenance of Insurance..............................................................56
Section 3.6. Enforcement of Due-on-Sale Clauses; Assumption and Substitution
Agreements............................................................................58
Section 3.7. Realization upon Defaulted Loans......................................................58
Section 3.8. Trustee to Cooperate; Release of Mortgage Files.......................................61
Section 3.9. Servicing Compensation................................................................61
Section 3.10. Reports to the Trustee; Custodial Account for P&I Statements..........................62
Section 3.11. Annual Statement as to Compliance.....................................................62
Section 3.12. Annual Independent Public Accountants' Servicing Report...............................62
Section 3.13. Access to Certain Documentation and Information Regarding the Loans...................63
Section 3.14. [Reserved]............................................................................63
Section 3.15. Sale of Defaulted Loans and REO Properties............................................63
Section 3.16. Delegation of Duties..................................................................65
Section 3.17. [Reserved]............................................................................65
Section 3.18. [Reserved]............................................................................65
Section 3.19. Appointment of a Special Servicer.....................................................65
Section 3.20. Allocation of Realized Losses.........................................................65
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ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS................................................................66
Section 4.1. Distributions to Certificateholders...................................................66
Section 4.2. Statements to Certificateholders......................................................68
Section 4.3. Advances by the Servicer; Distribution Reports to the Trustee.........................69
Section 4.4. Nonrecoverable Advances...............................................................70
Section 4.5. Foreclosure Reports...................................................................71
Section 4.6. Adjustment of Servicing Fees with Respect to Payoffs..................................71
Section 4.7. Prohibited Transactions Taxes and Other Taxes.........................................71
Section 4.8. Tax Administration....................................................................72
Section 4.9. Equal Status of Servicing Fee.........................................................72
Section 4.10. Appointment of Paying Agent and Certificate Administrator.............................73
ARTICLE V THE CERTIFICATES......................................................................73
Section 5.1. The Certificates......................................................................73
Section 5.2. Certificates Issuable in Classes; Distributions of Principal and Interest;
Authorized Denominations..............................................................80
Section 5.3. Registration of Transfer and Exchange of Certificates.................................80
Section 5.4. Mutilated, Destroyed, Lost or Stolen Certificates.....................................81
Section 5.5. Persons Deemed Owners.................................................................81
Section 5.6. Temporary Certificates................................................................82
Section 5.7. Book-Entry for Book-Entry Certificates................................................82
Section 5.8. Notices to Clearing Agency............................................................83
Section 5.9. Definitive Certificates...............................................................83
Section 5.10. Office for Transfer of Certificates...................................................84
ARTICLE VI THE DEPOSITOR AND THE SERVICER........................................................84
Section 6.1. Liability of the Depositor and the Servicer...........................................84
Section 6.2. Merger or Consolidation of the Depositor or the Servicer..............................84
Section 6.3. Limitation on Liability of the Servicer and Others....................................85
Section 6.4. Servicer Not to Resign................................................................85
ARTICLE VII DEFAULT.................................................................................86
Section 7.1. Events of Default.....................................................................86
Section 7.2. Other Remedies of Trustee.............................................................87
Section 7.3. Directions by Certificateholders and Duties of Trustee During Event
of Default............................................................................88
Section 7.4. Action upon Certain Failures of Servicer and upon Event of Default....................88
Section 7.5. Appointment of Successor Servicer.....................................................88
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Section 7.6. Notification to Certificateholders....................................................90
ARTICLE VIII CONCERNING THE TRUSTEE....................................................................90
Section 8.1. Duties of Trustee.....................................................................90
Section 8.2. Certain Matters Affecting Trustee.....................................................92
Section 8.3. Trustee Not Required to Make Investigation............................................93
Section 8.4. Trustee Not Liable for Certificates or Loans..........................................93
Section 8.5. Trustee May Own Certificates..........................................................94
Section 8.6. Servicer to Pay Trustee's Fees and Expenses...........................................94
Section 8.7. Eligibility Requirements for Trustee..................................................94
Section 8.8. Resignation and Removal of Trustee....................................................95
Section 8.9. Successor Trustee.....................................................................95
Section 8.10. Merger or Consolidation of Trustee....................................................96
Section 8.11. Appointment of Co-Trustee or Separate Trustee.........................................96
Section 8.12. Appointment of Custodians.............................................................97
Section 8.13. Authenticating Agent..................................................................97
Section 8.14. Bloomberg.............................................................................98
Section 8.15. Reports to Securities and Exchange Commission.........................................99
Section 8.16. Calculation of LIBOR..................................................................99
ARTICLE IX TERMINATION..........................................................................100
Section 9.1. Termination upon Purchase by the Depositor or Liquidation of All Loans...............100
Section 9.2. Trusts Irrevocable...................................................................101
Section 9.3. Additional Termination Requirements..................................................101
ARTICLE X MISCELLANEOUS PROVISIONS.............................................................102
Section 10.1. Amendment............................................................................102
Section 10.2. Recordation of Agreement.............................................................103
Section 10.3. Limitation on Rights of Certificateholders...........................................104
Section 10.4. Governing Law; Jurisdiction..........................................................104
Section 10.5. Notices..............................................................................105
Section 10.6. Severability of Provisions...........................................................105
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EXHIBITS
Exhibit A - Forms of Class A and Subordinate 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 - Planned Principal Balances
Exhibit P - Targeted Principal Balances
Exhibit Q - Bloomberg Data
Exhibit R - Form of Special Servicing and Collateral Fund Agreement
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This Pooling and Servicing Agreement, dated and effective as of December 1,
1998 (this "Agreement"), is executed by and among ABN AMRO Mortgage Corporation,
as depositor (the "Depositor"), LaSalle Home Mortgage Corporation, as servicer
(the "Servicer"), and Chase Bank of Texas, National Association, 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 September 18, 1998, and a Prospectus Supplement, dated December 22, 1998,
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 December 23, 1998. 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
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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. 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
Remittance or Notional Last Scheduled
Designation Rate(1) Balance Distribution Date*
----------- --------- ------- ------------------
Class A-1 6.00% $10,299,000 January 25, 2029
Class A-2 6.05% 17,661,000 January 25, 2029
Class A-3 6.20% 45,022,000 January 25, 2029
Class A-4 6.00% 97,921,000 January 25, 2029
Class A-5 5.90%(2) 46,804,614 January 25, 2029
Class A-6 9.30%(3) 8,084,625 January 25, 2029
Class A-7 (4) 2,694,875 January 25, 2029
Class A-8 6.75%(5) 3,884,200 January 25, 2029
Class A-9 6.75%(6) 3,259,834 January 25, 2029
Class A-10 6.75%(6) 82,107 December 25, 2013
Class A-11 %(7) 1,872,184 January 25, 2029
Class M 6.75% 4,880,000 January 25, 2029
Class B-1 6.75% 1,952,100 January 25, 2029
Class B-2 6.75% 976,000 January 25, 2029
Class B-3 6.75% 732,000 January 25, 2029
Class B-4 6.75% 488,000 January 25, 2029
Class B-5 6.75% 732,070.84 January 25, 2029
Class R'D' 6.75% 100(8) January 25, 2029
* The Distribution Date in the month after the maturity date for the latest
maturing Loan.
'D' 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
Components) on each Distribution Date will have accrued during the
preceding calendar month at the applicable per annum Remittance Rate.
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(2) For purposes of calculating distributions, the Class A-5 Certificates will
each be comprised of four Components having the designations, initial
Component Principal Balances and Remittance Rates set forth below:
Initial Component Principal
Designation or Notional Balance Remittance Rate
----------- --------------------- ---------------
Component A-5-1 $16,850,398 6.75%(A)
Component A-5-2 42,701,923 6.75%(B)
Component A-5-3 4,102,691 0.00%(C)
Component A-5-4 4,510,559 6.75%(D)
(A) Component A-5-1 will accrue interest on the Component A-5-1
Notional Amount. Component A-5-1 will not be entitled to
receive distributions of principal.
(B) On each Distribution Date, an amount equal to the Component
A-5-2 Accrual Amount will be added to the Component A-5-2
Principal Balance and such amount will be distributed as
principal to other Components and Classes of the Class A
Certificates as described herein and will not be distributed
as interest to Component A-5-2.
(C) Component A-5-3 will not be entitled to distributions of
interest and will receive principal only in respect of the
Loans.
(D) Component A-5-4 will accrue interest on the Component A-5-4
Notional Amount. Component A-5-4 will not be entitled to
receive distributions of principal.
(3) Interest will accrue on the Class A-6 Certificates at an initial interest
rate of 5.90% and after the first Distribution Date at a per annum rate of
0.85% above LIBOR, determined monthly as described herein, subject to a
maximum rate of 9.00% and a minimum rate of 0.85%.
(4) Interest will accrue on the Class A-7 Certificates at an initial interest
rate of 9.30% and after the first Distribution Date at a per annum rate of
24.45% minus (3.0 x LIBOR), determined monthly as described herein, subject
to a maximum rate of 24.45% and a minimum rate of 0.00%.
(5) On each Distribution Date, an amount equal to the Class A-8 Accrual Amount
will be added to the Class A-8 Principal Balance, and such amount will be
distributed as principal to other Components and Classes of the Class A
Certificates as described herein and will not be distributed as interest to
the Class A-8 Certificates.
(6) The Class A-9 and Class A-10 Certificates will accrue interest on the Class
A-9 Notional Amount and Class A-10 Notional Amount, respectively. The Class
A-9 and Class A-10 Certificates will not be entitled to receive
distributions of principal.
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(7) For purposes of calculating distributions, the Class A-11 Certificates will
each be comprised of four Components having the designations, initial
Component Principal Balances and Remittance Rates set forth below:
Initial Component Principal
Designation or Notional Balance Remittance Rate
----------- ------------------- ---------------
Component A-11-1 $674,105 6.75%(A)
Component A-11-2 1,708,077 6.75%(B)
Component A-11-3 164,107 0.00%(C)
Component A-11-4 180,422 6.75%(D)
(A) Component A-11-1 will accrue interest on the Component A-11-1
Notional Amount. Component A-11-1 will not be entitled to
receive distributions of principal.
(B) On each Distribution Date, an amount equal to the Component
A-11-2 Accrual Amount will be added to the Component A-11-2
Principal Balance, and such amount will be distributed as
principal to other Components and Classes of the Class A
Certificates as described herein and will not be distributed
as interest to Component A-11-2.
(C) Component A-11-3 will not be entitled to distributions of
interest and will receive principal only in respect of the
Loans.
(D) Component A-11-4 will accrue interest on the Component A-11-4
Notional Amount. Component A-11-4 will not be entitled to
receive distributions of principal.
(8) 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).
W I T N E S S E T H
In consideration of the mutual agreements herein contained, the Depositor,
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:
Accrual Certificates: The Class A-8 Certificates.
Accrual Components: Component A-5-2 of the Class A-5 Certificates and
Component A-11-2 of the Class A-11 Certificates.
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Adjustable Rate Certificates: The Class A-6 Certificates and the Class A-7
Certificates.
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.
Aggregate Subordinate Percentage: For any Distribution Date, the aggregate
of the Class Principal Balances of the Subordinate Certificates immediately
prior to such Distribution Date divided by the aggregate Scheduled Principal
Balance of all of the Loans immediately prior to such Distribution Date.
Agreement: This Pooling and Servicing Agreement and all amendments and
supplements hereto.
ALTA: The American Land Title Association, or any successor.
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 Certificates (other than the
Interest Only Certificates and Class R Certificate), an initial Certificate
Principal Balance equal to $25,000 each and integral multiples of $1 in excess
thereof. With respect to the Interest Only Certificates, a Class
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Notional Amount as of the Cut-Off Date equal to $100,000 and integral multiples
of $1 in excess thereof. With respect to the Class R Certificate, one
Certificate with a Percentage Interest equal to 100%.
Available Distribution Amount: With respect to the Loans, 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 Loans by the Determination Date for such
Distribution Date and not previously distributed (including Liquidation
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 Certificate Account 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 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 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.
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Bankruptcy Coverage: As of the Cut-Off Date, $100,000, and thereafter, the
initial Bankruptcy Coverage amount of $100,000, 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. Bankruptcy
Coverage may be reduced upon written confirmation from the Rating Agency that
such reduction will not adversely affect the then current ratings assigned to
the Certificates by the 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 the Rating Agency
which is incorporated 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 the Rating Agency. Funds in the Certificate Account in respect of
the Loans and amounts withdrawn from the Certificate Account attributable to the
Loans 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
7
(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 Account Statement: With respect to the Certificate Account, a
statement delivered by the Certificate Administrator to the Trustee pursuant to
Section 3.10.
Certificate Administrator: Any Certificate Administrator appointed by the
Trustee as provided pursuant to Section 4.10. Initially, the Certificate
Administrator will be LaSalle National Bank.
Certificate Administrator and Trustee Fee: For each Loan, a fee per annum
equal to 0.0125% 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, as applicable, the Available Distribution Amount
for the Loans shall be distributed to the Certificates in the following amounts
and priority:
(a) With respect to the Senior Certificates:
(i) First, to Component A-5-3 of the Class A-5 Certificates and
Component A-11-3 of the Class A-11 Certificates, pro rata, according
to their respective Component Principal Balances, the Discount
Fractional Principal Amount;
(ii) Second, to the Senior Certificates and Components,
concurrently, the sum of the Interest Distribution Amounts for such
Classes and Components of Certificates remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts; provided, however, that the amount that would
otherwise be payable to the Class A-8 Certificates, Component A-5-2 of
the Class A-5 Certificates and Component A-11-2 of the Class A-11
Certificates pursuant to this clause (I)(a)(ii) will be paid instead
as principal as described in clause (I)(a)(iv) of this definition of
Certificate Distribution Amount;
(iii) Third, to the Senior Certificates and Components,
concurrently, the sum of the Interest Distribution Amounts for such
Classes and Components (other than the Principal Only Components) of
Certificates for the current Distribution Date, pro rata according to
their respective Interest Distribution Amounts; provided, however,
that the sum of the Class A-8 Accrual Amount, the Component A-5-2
Accrual Amount and the Component A-11-2 Accrual Amount will be paid as
principal as described in clause (I)(a)(iv) of this definition of
Certificate Distribution Amount;
(iv) Fourth, to the Senior Certificates (other than the Principal
Only Components), the Senior Principal Amount as follows:
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(a) first, to the Class R Certificate, to the extent
necessary to reduce its Principal Balance to zero;
(b) second, to the Class A Certificates, sequentially as
follows:
(1) to the Class A-1, Class A-2 and Class A-3
Certificates, sequentially, to the extent necessary
to reduce their respective Principal Balances to
their Planned Principal Balances;
(2) to the Class A-4 Certificates, to the extent
necessary to reduce their Certificate Principal
Balance to their Targeted Principal Balance;
(3) to Component A-5-2 of the Class A-5 Certificates and
Component A-11-2 of the Class A-11 Certificates, pro
rata, according to their respective Component
Principal Balances, to the extent necessary to
reduce their respective Principal Balances to their
Targeted Principal Balances;
(4) to the Class A-6 and Class A-7 Certificates, pro
rata, according to their respective Class Principal
Balances, to the extent necessary to reduce their
respective Principal Balances to their Targeted
Principal Balances;
(5) to the Class A-8 Certificates, until their Principal
Balance has been reduced to zero;
(6) to the Class A-6 and Class A-7 Certificates, pro
rata, according to their respective Class Principal
Balances, without regard to their Targeted Principal
Balances, until their respective Principal Balances
have been reduced to zero;
(7) if the Class A-4 Certificates are still outstanding,
to the Class A-4 Certificates, Component A-5-2 of
the Class A-5 Certificates, and Component A-11-2 of
the Class A-11 Certificates, pro rata, according to
their respective Class Principal Balances, or
Component Principal Balances after giving effect to
clauses (2) and (3) above, without regard to their
Targeted Principal Balances, until their respective
Principal Balances have been reduced to zero;
otherwise, to Component A-5-2 of the Class A-5
Certificates and Component A-11-2 of the Class A-11
Certificates, pro rata, according to their
respective Component Principal Balances without
regard to their Targeted Principal Balances, until
their respective Principal Balances have been
reduced to zero;
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(8) to the Class A-1, Class A-2 and Class A-3
Certificates, sequentially, without regard to their
Planned Principal Balances, until their respective
Principal Balances have been reduced to zero;
(v) Fifth, to Component A-5-3 of the Class A-5 Certificates and
Component A-11-3 of the Class A-11 Certificates, pro rata, according
to their respective Component Principal Balances up to the Subordinate
Principal Amount (determined without regard to the proviso of such
definition) for such Distribution Date, the portion of the Discount
Fractional Principal Shortfall amount payable to Component A-5-3 of
the Class A-5 Certificates and Component A-11-3 of the Class A-11
Certificates on previous Distribution Dates pursuant to clause
(I)(a)(vi) of this definition of "Certificate Distribution Amount" and
remaining unpaid from such previous Distribution Dates; and
(vi) Sixth, to Component A-5-3 of the Class A-5 Certificates and
Component A-11-3 of the Class A-11 Certificates, pro rata, according
to their respective Component Principal Balances up to the Subordinate
Principal Amount (determined without regard to the proviso of such
definition) for such Distribution Date (less any amounts distributed
to Component A-5-3 of the Class A-5 Certificates or Component A-11-3
of the Class A-11 Certificates pursuant to paragraph (I)(a)(v)), the
Discount Fractional Principal Shortfall, provided, that any amounts
distributed in respect of the Discount Fractional Principal Shortfall
pursuant to paragraph (I)(a)(v) or this paragraph (I)(a)(vi) of this
definition of "Certificate Distribution Amount" shall not cause a
further reduction of the Component A-5-3 or Component A-11-3 Component
Principal Balance;
(b) With respect to the Subordinate Certificates and the Class R
Certificate, 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, X-0, X-0, X-0, X-0 and B-5
Certificates, in their order of seniority, the following:
(1) their respective amounts of previously unpaid and then
current Interest Distribution Amounts;
(2) 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 Principal Balances have been reduced
to zero;
10
(ii) Second, to the 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
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 remaining, shall be distributed to the
outstanding Senior Certificates in the following amounts and priority:
(a) First, to Component A-5-3 of the Class A-5 Certificates and to
Component A-11-3 of the Class A-11 Certificates, pro rata, according to
their respective Class Principal Balances or Component Principal Balances,
the Discount Fractional Principal Amount;
(b) Second, to the Senior Certificates (including the Accrual
Certificate and Accrual Components, but excluding the Principal Only
Components), previously unpaid and then current Interest Distribution
Amounts, pro rata, according to such amount payable to the extent of
amounts available;
(c) Third, to the Senior Certificates (other than the Interest Only
Certificates and Interest Only Components and Principal Only Components,
the Senior Principal Amount, pro rata, according to their respective Class
Principal Balances (other than Component A-5-3 of the Class A-5
Certificates and Component A-11-3 of the Class A-11 Certificates);
(d) Fourth, to the Senior Certificates, pro rata, according to their
respective Class Principal Balances or Component Principal Balances, the
amount of unreimbursed Realized Losses previously allocated to such Class;
and
(e) 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 National Bank.
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
11
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-8 Accrual Amount: For any Distribution Date prior to the Credit
Support Depletion Date, an amount equal to the accrued interest that would
otherwise be distributable in respect of the Class A-8 Certificates on such
Distribution Date and which will be added to the Class A-8 Principal Balance.
Class A Certificates: The Class X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-00 and A-11 Certificates, collectively, and designated as such on the
face thereof in substantially the forms attached hereto as Exhibits A-1 through
A-11, respectively.
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 the REMIC I and REMIC II, respectively, pursuant to
Section 2.1.
Class R Certificateholder: The registered Holder of the Class R
Certificate.
Class A-6 Interest Rate: With respect to the initial Interest Accrual
Period, 5.90% per annum, and as to any Interest Accrual Period thereafter, will
be a per annum rate equal to LIBOR plus 0.85% (subject to a maximum rate of
9.00% per annum and a minimum rate of 0.85% per annum).
Class A-7 Interest Rate: With respect to the initial Interest Accrual
Period, 9.30% per annum, and as to any Interest Accrual Period thereafter, will
be a per annum rate equal to 24.45% minus the product of LIBOR and 3.0 (subject
to a maximum rate of 24.45% per annum and a minimum rate of 0.00% per annum).
Class Notional Amount: With respect to the Class A-9 Certificates, the
Class A-9 Notional Amount and with respect to the Class A-10 Certificates, the
Class X-00 Xxxxxxxx Xxxxxx.
Xxxxx X-0 Xxxxxxxx Xxxxxx: As of the Closing Date approximately $3,259,834,
and thereafter, with respect to any Distribution Date will equal 41.0% of the
Thirty Year Premium Loan Notional Amount.
12
Class A-10 Notional Amount: As of the Closing Date approximately $82,107,
and thereafter, with respect to any Distribution Date will equal the aggregate
Principal Balance, as of the first day of the month of such Distribution Date,
of the Fifteen Year Premium Loans multiplied by the following fraction:
the weighted average of the Pass-Through Rates of the
Fifteen Year Premium Loans as of the first day of such month - 6.75%
--------------------------------------------------------------------
6.75%
Class Principal Balance: For any Class of Certificates (other than the
Class A-5 and Class A-11 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 the definition of "Realized Loss" 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 the definition of
"Realized Loss" 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, the Class
Principal Balance of the most subordinate Class of Certificates outstanding at
any time shall be equal to the aggregate Scheduled Principal Balance of all of
the Loans less the Class Principal Balance of all other Classes of Certificates.
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.
Closing Date: December 23, 1998, which is the date of settlement of the
sale of the Certificates to the initial purchasers thereof.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest: For any Distribution Date with respect to the Loans
contained therein, 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,
(b) the aggregate Payoff Earnings and (c) the aggregate Payoff Interest and (ii)
the aggregate Uncollected Interest.
Component: A portion of the Class A-5 and A-11 Certificates representing
parts of the entitlement of such Classes to principal and/or interest as
described in the Preliminary Statement hereto and the remainder of this
Agreement and hereafter referred to as Component X-0-0, X-0-0, X-0-0, X-0-0,
X-00-0, X-00-0, X-00-0 and A-11-4.
Component Notional Amount: With respect to Component A-5-1 and A-5-4 of the
Class A-5 Certificates and Component A-11-1 and A-11-4 of the Class A-11
Certificates, the corresponding notional amount for such Component.
13
Component A-5-1 Notional Amount: As of the Closing Date approximately
$16,850,398, and thereafter, an amount equal to 96.1538459806% of the Senior
Certificate Notional Amount.
Component A-5-2 Accrual Amount: For any Distribution Date prior to the
Credit Support Depletion Date, an amount equal to the accrued interest that
would otherwise be distributable in respect of Component A-5-2 of the Class A-5
Certificates on such Distribution Date and which will be added to the Component
A-5-2 Component Principal Balance.
Component A-5-4 Notional Amount: As of the Closing Date approximately
$4,510,559, and thereafter, with respect to any Distribution Date will equal
56.7307691286% of the Thirty Year Premium Loan Notional Amount.
Component A-11-1 Notional Amount: As of the Closing Date approximately
$674,015, and thereafter, an amount equal to 3.8461540194% of the Senior
Certificate Notional Amount.
Component A-11-2 Accrual Amount: For any Distribution Date prior to the
Credit Support Depletion Date, an amount equal to the accrued interest that
would otherwise be distributable in respect of Component A-11-2 of the Class
A-11 Certificates on such Distribution Date and which will be added to the
Component A-11-2 Component Principal Balance.
Component A-11-4 Notional Amount: As of the Closing Date approximately
$180,422, and thereafter, with respect to any Distribution Date will equal
2.2692308714% of the Thirty Year Premium Loan Notional Amount.
Component Principal Balance: For Components A-5-2 and A-5-3 of the Class
A-5 Certificates and Components A-11-2 and A-11-3 of the Class A-11
Certificates, the applicable initial Component Principal Balance therefor set
forth in the Preliminary Statement hereto, corresponding to the rights of such
Component in payments of principal due to be passed through to the holders of
the Class A-5 and Class A-11 Certificates from principal payments on the Loans,
as reduced from time to time by (x) distributions of principal to the holders of
the Class A-5 and Class A-11 Certificates in respect of such Component and (y)
the portion of Realized Losses allocated to the Component Principal Balance in
respect of such Component pursuant to the definition of "Realized Loss" with
respect to a given Distribution Date. For any Distribution Date, the reduction
of the Component Principal Balance of any Component pursuant to the definition
of "Realized Loss" shall be deemed effective prior to the determination and
distribution of principal on such Component pursuant to the definition of
"Certificate Distribution Amount." Notwithstanding the foregoing, any amounts
distributed in respect of losses pursuant to paragraphs (I)(a)(v) or (I)(a)(vi)
of the definition of "Certificate Distribution Amount" shall not cause a further
reduction in the Component A-5-3 or Component A-11-3 Component Principal
Balances. The Component Principal Balance for Component A-5-2 shall be referred
to as the "Component A-5-2 Principal Balance," the Component Principal Balance
for Component A-5-3 shall be referred to as the "Component A-5-3 Principal
Balance," the Component Principal Balance for Component A-11-2 shall be referred
to as the "Component A-11-2 Principal Balance" and the Component Principal
Balance for Component
14
A-11-3 shall be referred to as the "Component A-11-3 Principal Balance." The
Component Principal Balance of the Interest Only Components shall be zero.
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 000 Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000, Attention: X. Xxxxxxx Xxxx III.
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.
Custodial Account for P&I: The Custodial Account for Principal and Interest
established and maintained by the Servicer and caused by the Servicer to be
established and maintained pursuant to Section 3.2(b) 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, (a) within FDIC insured accounts (or other
accounts with comparable insurance coverage acceptable to the Rating Agency)
created, maintained and monitored by the Servicer or (b) 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 (a) 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: December 1, 1998.
15
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.
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.
Depositary Agreement: The Letter of Representations, dated December 23,
1998 by and among DTC, the Depositor and the Trustee.
Depositor: ABN AMRO Mortgage Corporation, a Delaware corporation, or its
successor- in-interest.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: A day not later than the 10th day preceding a related
Distribution Date.
Discount Fraction: For any Discount Loan, the following fraction:
6.75% - the Pass-Through Rate on such Discount Loan
---------------------------------------------------
6.75%
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 Prior 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 such 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, as applicable.
16
Discount Loan: The Loans having Pass-Through Rates of less than 6.75%.
Disqualified Organization: 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 January 25, 1999.
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.
EAB Bank: EAB Bank, a New York commercial bank
EAB Mortgage Company: EAB Mortgage Company, Inc., a New York corporation.
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 the 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
the Rating Agency, or (iii) the approval of the 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 S&P and Fitch (the initial
rating of the Class A Certificates);
17
(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 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 term 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
18
corporation that are then held as 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.
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.
Exchange Act: The Securities Exchange Act of 1934, as amended.
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.
19
FHA: Federal Housing Administration, or any successor thereto.
FHLMC: Federal Home Loan Mortgage Corporation, or any successor thereto.
Fitch: Fitch IBCA, Inc. provided, that at any time it be a Rating Agency.
Fifteen Year Premium Loans: The Loans having original terms to stated
maturity of not more than fifteen years and Pass-Through Rates in excess of
6.75% per annum.
FNMA: Federal National Mortgage Association, or any successor thereto
Fraud Coverage: As of the Cut-Off Date approximately $2,440,029, 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 on such Loans up to such date of
determination and (2) from the third to the fifth Anniversary, an amount equal
to (a) 0.50% of the aggregate principal balance of all of the Loans as of the
most recent Anniversary minus (b) the aggregate amounts allocated to the
Certificates with respect to Fraud Losses on the Loans since the most recent
Anniversary up to such date of determination. On and after the fifth
Anniversary, the Fraud Coverage will be zero. Fraud Coverage may be reduced upon
written confirmation from the Rating Agency that such reduction will not
adversely affect the then current ratings assigned to the Certificates by the
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,
promotor, underwriter, trustee, partner, director or person performing similar
functions.
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.
20
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 Components), the amount of interest
accrued on the respective Class Principal Balance, Component Principal Balance,
Class Notional Amount or Component Notional Amount, as applicable, at 1/12th of
the related Remittance Rate for such Class or Component during the applicable
Prepayment 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 definitions
of "Uncompensated Interest Shortfall" and "Realized Loss," respectively
provided, however, that (a) in the case of the Class A-8 Certificates, such
amount shall be reduced by the Class A-8 Accrual Amount, (b) in the case of
Component A-5-2 of the Class A-5 Certificates, such amount shall be reduced by
the Component A-5-2 Accrual Amount, and (c) in the case of Component A-11-2 of
the Class A-11 Certificates, such amount shall be reduced by the Component
A-11-2 Accrual Amount.. The Interest Distribution Amount for Component A-5-3 of
the Class A-5 Certificates and Component A-11-3 of the Class A-11 Certificates
on any Distribution Date shall equal zero.
Interest Only Certificates: The Class A-9 and A-10 Certificates, which will
not be entitled to receive principal.
Interest Only Components: Component A-5-1 and Component A-5-4 of the Class
A-5 Certificates and Component A-11-1 and A-11-4 of the Class A-11 Certificates,
which will not be entitled to receive principal.
Interested Person: The Depositor, the Servicer, any Holder of a
Certificate, or any Affiliate of any such Person.
Junior Subordinate Certificates: The Class B-3, B-4 and B-5 Certificates,
collectively.
LIBOR: The per annum rate established by the Trustee or the Certificate
Administrator, if any, in accordance with Section 8.16.
LIBOR Business Day: Means any day on which dealings in United States
dollars are transacted in the London interbank market.
21
LIBOR Determination Date: Means the second LIBOR Business Day before the
first day of the related Interest Accrual Period.
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: 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.
Liquidation Principal: The principal portion of Liquidation Proceeds
received (exclusive of the Discount Fractional Principal Amount with respect to
each Loan which became a Liquidated Loan (but not in excess of the principal
balance thereof) during the applicable Prepayment Period.
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;
22
(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 and as of the Cut-Off Date;
(xi) the type of property;
(xii) the nature of occupancy at origination;
(xiii) the county in which Mortgaged Property is located, if available; and
(xiv) 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.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
Mortgage File: The following documents or instruments with respect to each
Loan transferred and assigned pursuant to Section 2.1:
(i) The original Mortgage Note bearing all intervening endorsements
endorsed, "Pay to the order of Chase Bank of Texas, National Association,
as Trustee, for the benefit of the Certificateholders of ABN AMRO Mortgage
Corporation Series 1998-5 Attn: Corporate Trust Department, 000 Xxxxxx
Xxxxxx, Xxxxxxx, XX 00000, 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 Seller shall deliver or cause to be delivered to the Purchaser a true
and correct copy of such Mortgage, together with (1) in the case of a delay
23
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 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 "Chase Bank of Texas, National
Association, 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 Seller shall deliver or
cause to be delivered to the Purchaser 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 mortgage 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 primary mortgage insurance certificate, if any;
24
(vii) Hazard insurance certificates and copies of the hazard insurance
policy and, if applicable, flood insurance policy; and
(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.
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.
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
both by the Chairman of the Board, the President or a Vice President, and by the
Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries 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, 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.
25
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, a 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: Any paying agent appointed by the Trustee pursuant to Section
4.10. Initially, the Paying Agent shall be LaSalle National Bank.
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 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;
26
(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 Amount; 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, 8.1, 8.3, 10.1 and 10.3, "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) 98.00% and (y) the percentage calculated
by dividing its Certificate Principal Balance by the Aggregate Certificate
Principal Balance; provided, however, that the percentage in (x) above
shall be increased by one percent (1 %) upon each retirement of the
Interest Only Certificates;
(ii) with respect to each Interest Only Certificate, one percent (1%)
of such Certificate's 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, 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
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.
27
Planned Principal Balance: For any Distribution Date, the amount set forth
in the table attached hereto as Exhibit O for such Distribution Date, for the
Class A-1, Class A-2 and Class A-3 Certificates.
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 Only Components: Component A-5-3 of the Class A-5 Certificates
and Component A-11-3 of the Class A-11 Certificates.
Principal Payment: Any payment of principal on a Loan other than a
Principal Prepayment.
Principal Payment Amount: On any Distribution Date and for the Loans, the
sum with respect to the Loans 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
during the applicable Prepayment Period, 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.
28
Principal Prepayment Amount: On any Distribution Date and for the Loans,
the sum with respect to the Loans of (i) Curtailments received during the
applicable Prepayment Period from such Loans and (ii) Payoffs received during
the applicable Prepayment Period from the Loans.
Pro Rata Allocation: The allocation of the principal portion of losses
relating to a Loan to all the Senior Certificates (other than the Principal Only
Components, the Interest Only Certificates and Interest Only Components) and to
the Subordinate Certificates (in the limited circumstances described below) pro
rata according to their respective Certificate Principal Balances or Component
Principal Balances (except if the loss is recognized with respect to a Discount
Loan, in which event the applicable Discount Fraction of such loss will be
allocated, pro rata, to Component A-11-3 of the Class A-11 Certificates and
Component A-5-3 of the Class A-5 Certificates, and the remainder of such loss
will be allocated as described above) or, in the case of any of the Accrual
Certificates or Accrual Components, the Certificate Principal Balance of such
Certificate or the Component Principal Balance of such Component on the Closing
Date, if lower, and the allocation of the interest portion of such losses to the
Certificates (other than the Principal Only Components) pro rata according to
the amount of interest accrued but unpaid on each such Class or Component 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, and
unpaid accrued 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 the 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 after the
application of Liquidation Proceeds and the
29
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.
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.
REMIC: A real estate mortgage investment conduit, as such term is defined
in the Code.
REMIC I: The pool of assets 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 86OG 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 Certificates or Component, 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 is 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. 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.
30
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 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 Rating Services, a division of the McGraw Hill
Companies, Inc. 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.
Sellers: EAB Bank, EAB Mortgage Company and Standard Federal Bank; each
individually a "Seller".
Senior Certificate Notional Amount with respect to any distribution date,
will equal the sum of the following amounts:
31
1/9th of the Principal Balance of the
Class A-1 Certificates
+
14/135ths of the Principal Balance of the
Class A-2 Certificates
+
11/135ths of the Principal Balance of the
Class A-3 Certificates
+
1/9th of the Principal Balance of the
Class A-4 Certificates
Senior Certificates: The Class A and Class R Certificates, collectively.
Senior Liquidation Amount: The aggregate, for each Loan which became a
Liquidated Loan during the applicable Prepayment Period, of the lesser of: (i)
the Senior Percentage of the Principal Balance of such Loan (exclusive of the
Discount Fraction thereof, if applicable), and (ii) the Senior Prepayment
Percentage of the Liquidation Principal with respect to such Loan.
Senior Percentage: As of the Closing Date, approximately 95.93%, and
thereafter, with respect to any Distribution Date, the sum of the Class
Principal Balances of the Senior Certificates (other than the Principal Only
Components) divided by aggregate Scheduled Principal Balance of all Loans
(reduced by the Discount Fraction thereof), in each case immediately prior to
such Distribution Date.
Senior Prepayment Percentage: (i) On any Distribution Date occurring before
the Distribution Date in the month of January 2004, 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 each of the months of January 2004 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:
32
PERCENTAGE OF THE SUBORDINATE
DISTRIBUTION DATE OCCURRING IN AMOUNT AS OF THE CUT-OFF DATE
------------------------------ -----------------------------
January 2004 through December 2004.................... 30%
January 2005 through December 2005.................... 35%
January 2006 through December 2006.................... 40%
January 2007 through December 2007.................... 45%
January 2008 and thereafter........................... 50%
in which case, the Senior Prepayment Percentage shall be as follows:
DISTRIBUTION DATE OCCURRING IN SENIOR PREPAYMENT PERCENTAGE
------------------------------ ----------------------------
January 1999 through December 2003.................... 100%
January 2004 through December 2004.................... SENIOR PERCENTAGE + 70% of SUBORDINATE PERCENTAGE
January 2005 through December 2005.................... SENIOR PERCENTAGE + 60% of SUBORDINATE PERCENTAGE
January 2006 through December 2006.................... SENIOR PERCENTAGE + 40% of SUBORDINATE PERCENTAGE
January 2007 through December 2007.................... SENIOR PERCENTAGE + 20% of SUBORDINATE PERCENTAGE
January 2008 and thereafter........................... SENIOR PERCENTAGE
If on any Distribution Date the allocation to the Certificates (other than
the Principal Only Components) of Principal Prepayments in the percentage
required would reduce the sum of the Class Principal Balances of the
Certificates (other than the Principal Only Components) 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 Principal Only Components 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 Principal Payment Amount for the Loans
(exclusive of the Discount Fractional Principal Amount), (b) the Senior
Prepayment Percentage of the Principal Prepayment Amount for the Loans
(exclusive of the Discount Fractional Principal Amount) and (c) the Senior
Liquidation Amount.
Servicer: LaSalle Home Mortgage Corporation, an Illinois 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.
33
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 approximately $2,440,029,
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 initial Special Hazard Coverage amount of $2,440,029 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 the Rating Agency that such reduction will not adversely affect the then
current ratings assigned to the Certificates by the 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: (ii)
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.
Standard Federal Bank: Standard Federal Bank, a Federal Savings Bank.
Subordinate Amount: The excess of the aggregate Scheduled Principal Balance
of the Loans over the Senior Certificate Principal Balance.
34
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-12
through A-17, 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 aggregate of
Liquidation Principal for all the Loans which became Liquidated Loans during the
applicable Prepayment Period, over the related Senior Liquidation Amount for
such Distribution Date.
Subordinate Percentage: As of the Closing Date approximately 4.07%, 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, approximately
0%, and thereafter, with respect to any Distribution Date, the excess of 100%
over the Senior Prepayment Percentage.
Subordinate Principal Amount: On any Distribution Date, will be equal to
the sum of:
(1) the Subordinate Percentage of the Principal Payment Amount (exclusive
of the portion thereof attributable to the Discount Fractional
Principal Amount);
(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 Principal Only Components
with respect to the Discount Fractional Principal Shortfall on such
Distribution Date.
Any reduction in the Subordinate Principal Amount pursuant to the proviso above
shall offset the amount calculated pursuant to first clause (1), second clause
(3) and then clause (2), in each case of the definition thereof. 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 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: On any Distribution Date, the
Subordinate Prepayment Percentage of the Principal Prepayment Amount for the
Loans (exclusive of the portion
35
thereof attributable to the Discount Fractional Principal Amount (reduced by the
Discount Fractional Principal Shortfall)).
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; by (2) the sum of the Class
Principal Balances of all Classes of Certificates as of such date prior to
giving effect to distributions or allocations of Realized Losses on the Loans on
such date.
Substitute Loan: As defined in Section 2.2.
Targeted Principal Balance: For any Distribution Date, the amount set forth
in the table attached hereto as Exhibit P for such Distribution Date, for the
Class A-4, Class A-6 and Class A-7 Certificates, Component A-5-2 of the Class
A-5 Certificates and Component A-11-2 of the Class A-11 Certificates.
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.
Thirty Year Premium Loan Notional Amount with respect to any distribution
date, will equal the total principal balance, as of the first day of the month
of such distribution date, of the Thirty Year Premium Loans multiplied by the
following fraction:
the weighted average of the Pass-Through Rates of the
Thirty Year Premium Loans as of the first day of such month minus 6.75%
-----------------------------------------------------------------------
6.75%
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); (iii) such assets
36
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 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 each of the
Mortgage Loan Purchase Agreements each dated as of December 23, 1998, between
each Seller and the Depositor.
Trustee: Chase Bank of Texas, National Association, 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: For any Distribution Date, the excess, if
any, of (i) the sum of (a) aggregate Uncollected Interest and (b) aggregate
Curtailment Shortfall over (ii) Compensating Interest.
Underwriters: Bear, Xxxxxxx & Co. Inc. 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.
37
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 bearing all intervening endorsements
endorsed, "Pay to the order of Chase Bank of Texas, National Association,
as Trustee, for the benefit of the Certificateholders of ABN AMRO Mortgage
Corporation Series 1998-5 Attn: Corporate Trust Department, 000 Xxxxxx
Xxxxxx, Xxxxxxx, XX 00000, 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 Seller shall deliver or cause to be delivered to the Purchaser (with a
copy 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 appropriate county
recording
38
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 "Chase Bank of Texas, National
Association, 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 Seller shall deliver or
cause to be delivered to the Purchaser (with a copy 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
39
(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.
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 and
a photocopy of such Assignment. 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.
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
40
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 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 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, the Mortgages, the assignments of the Mortgages and the Officer's
Certificates referred to in Section 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 to
determine that the appropriate Mortgage Notes have
41
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 such notice within which 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, not later than 90 days in the case of
repurchase referred to below or not later than 75 days in the case of a
substitution referred to below after the Trustee's notice to it respecting such
defect 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 Pass-Through
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 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
42
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 the 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:
(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 the information relating to the Loans set forth in
the Prospectus, Prospectus Supplement and the Form 8-K filed pursuant
to the Securities Exchange Act of 1934 relating to offering of the
Certificates is true and correct in all material respects at the date
or dates respecting which such information is furnished as specified
therein;
(iii) 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;
(iv) 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;
43
(v) 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;
(vi) 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 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;
(vii) 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;
(viii) that to the best of the Depositor's knowledge, as of
the date of the initial issuance of the Certificates, all taxes,
governmental assessments and insurance premiums previously due and
owing with respect to the Mortgaged Property have been paid;
(ix) 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;
(x) 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;
(xi) 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
44
Mortgage in any material respect; satisfied, cancelled or subordinated
such Mortgage in whole or in 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;
(xii) that each Mortgaged Property consists of a fee simple
estate or a condominium form of ownership in real property;
(xiii) the condominium projects that include the condominiums
that are the subject of any condominium loan are generally acceptable
to FNMA or FHLMC;
(xiv) 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 related 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;
(xv) that each Loan was originated on FNMA or FHLMC uniform
instruments;
(xvi) that based upon a representation by each Mortgagor at
the time of origination or assumption of the applicable Loan, 100% of
the Loans measured by Principal Balance were to be secured by
owner-occupied residences and no more than 0% of the Loans measured by
Principal Balance were to be secured by non-owner-occupied residences;
(xvii) 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;
(xviii) that no Loan had a Loan-to-Value Ratio at origination
in excess of 95%;
(xix) the Loans were not selected in a 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;
(xx) 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 with the underwriting standards of an
institution as described in subclause (A)(i) or (A)(ii) above;
45
(xxi) 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; and
(xxii) each Loan that has a Loan-to-Value Ratio in excess of
80% is covered by a primary mortgage insurance policy.
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 the 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 Installment 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.
46
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 860(G)(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 860(G)(a)(1) of the Code) of
REMIC I shall consist of four Pre-Strip Regular Interests, the Class
A-5-2 Regular Interest, the Class A-5-3 Regular Interest, the Class
A-5-4 Regular Interest, a single Pre-Inversion Regular Interest, the
Class A-8 Regular Interest, the Class A-9 Regular Interest, the Class
A-10 Regular Interest, the Class A-11-2 Regular Interest, the Class
A-11-3 Regular Interest, the Class A-11-4 Regular Interest, the Class M
Regular Interest, the Class B-1 Regular Interest, the Class B-2 Regular
Interest, the Class B-3 Regular Interest, the Class B-4 Regular
Interest and the Class B-5 Regular Interest. (The Pre-Strip Regular
Interests shall consist of four REMIC I regular interests, each of
which shall correspond as to principal amount to one of the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates.) (The Pre-Inversion
Regular Interest shall consist of a REMIC I regular interest which
shall correspond as to principal amount to the sum of the principal
amounts of the Class A-6 and Class A-7 Certificates.) 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 Class A-5-2,
A-5-3 and A-5-4 Components, the Class X-0, X-0, and A-10 Certificates,
the Class A-11-2, A-11-3, and A-11-4 Components, and the Class M, X-0,
X-0, X-0, X-0 and B-5 Certificates 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 of the Class
X-0, X-0, X-0 and A-4 Certificates shall be considered to have been
made solely from the principal payments of the corresponding Pre-Strip
Regular Interest of REMIC I. All interest payments with respect to the
Class X-0, X-0, X-0, and A-4 Certificates and Components A-5-1 and
A-11-1 shall be considered to have been made solely from the Pre-Strip
Regular Interests of REMIC I. All payments with respect to the Class
A-6 and A-7 Certificates shall be considered to have been made solely
from the Pre-Inversion Regular Interest of REMIC I.
The interest rate of each of the REMIC I Regular Interest
Classes X-0-0, X-0-0, X-0-0, X-0, X-0, X-00, X-00-0, X-00-0, X-00-0, X,
X-0, X-0, X-0, B-4 and B-5 of REMIC
47
I shall be the same as the Remittance Rate of the Certificate or
Component of REMIC II having the same designation.
The Pre-Strip Regular Interests shall each have an interest
rate of 6.75%. The Pre-Inversion Regular Interest shall have an
interest rate of 6.75%.
The principal balance of each of the Regular Interests of
REMIC I (except the Pre- Inversion and Pre-Strip Regular Interests, and
the Class X-0-0, X-00-0, X-0, xxx X-00 Regular Interests) is equal at
all times to the principal balance of the Certificate or Component of
REMIC II which has the same designation. The principal balance of each
Pre-Strip Regular Interest is equal at all times to the principal
balance of the corresponding Class X-0, X-0, X-0 or A-4 Certificates.
The principal balance of the Pre-Inversion Regular Interest is equal at
all times to the sum of the principal balances of the Class A-6 and A-7
Certificates. The notional principal balance of each of the Class
X-0-0, X-00-0, X-0 xxx X-00 Regular Interests is equal at all times to
the Notional Amount of the Certificate Class or Component of REMIC II
which has the same designation.
(d) The notional principal balance of each of the Class A-5-1
Component and Class A-11-1 Component of REMIC II shall for purposes of
the REMIC provisions be deemed to be composed of four component
notional principal balances, each of which corresponds at all times to
the principal balance of a Pre-Strip Regular Interest.
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 Illinois;
(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
48
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
(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
49
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 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
50
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.
(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.
51
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 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.
52
Section 3.2. Collection of Certain Loan Payments; Certificate Account.
(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 (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
53
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 Advances made by the Servicer pursuant to
Section 4.3;
(vi) All repurchase proceeds from the repurchase of a
Loan pursuant to a Purchase Obligation;
(vii) 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;
(viii) all income and gain realized from any
investment of the funds in the Custodial Account for P&I in
Eligible Investments;
(ix) all net income from the renting of REO Property
pursuant to Section 3.7(c); and
(x) 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 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
54
Certificates by the 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 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)) or to reimburse itself for Advances from
funds in the Custodial Account for P&I held for future distribution or
withdrawal, such funds 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 reimbursed the Trust Fund for such
expenses or following liquidation of the related Loan, or pursuant to
Section 6.3;
55
(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 in order that the Trustee 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. 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.
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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 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
57
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 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 reserves the right to 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
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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 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. 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
59
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 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)(ix).
60
(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.
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. 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
61
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.
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 compute 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.
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Section 3.11. Annual Statement as to Compliance. The Servicer will
deliver to the Trustee, on or before December 31 of each year, beginning
December 31, 1999, 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 the 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 December 31 of each year, beginning December 31, 1999, 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 the 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 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].
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
63
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. 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
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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, 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].
Section 3.18. [Reserved].
Section 3.19. Appointment of a Special Servicer. The Servicer may enter
into a special servicing agreement with an unaffiliated holder of a 100%
Percentage Interest of a Subordinate Certificate or a holder of a class of
securities representing interests in such Subordinate Certificate and/or other
subordinate mortgage pass-through 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 will contain provisions for the deposit of cash by
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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, with
respect to each Loan. 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 Special Hazard Losses, Fraud Losses and Bankruptcy
Losses in excess of the designated amounts of the applicable Special Hazard
Coverage, Fraud Coverage and Bankruptcy Coverage (each, as defined herein), will
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 and Components (other than the Principal Only Components, the
Interest Only Certificates and the Interest Only Components), pro rata,
according to their Class Principal Balances or Component Principal Balances (or,
in the case of any of the Accrual Certificates or Accrual Components, the Class
Principal Balance or Component Principal Balance of such Certificates or
Components on the Closing Date, if lower) in reduction of their respective Class
or Component Principal Balances, as applicable; provided, however, that all
losses allocable to the Class A-5 Certificates will be allocated to the Class
A-11 Certificates until the Principal Balance thereof has been reduced to zero;
provided, further, however, that if the loss is recognized with respect to a
Discount Loan (a) before the Credit Support Depletion Date, the Discount
Fraction of such loss will first be allocated, pro rata, according to their
respective Component Principal Balances to Component A-5-3 of the Class A-5
Certificates and Component A-11-3 of the Class A-11-3 Certificates and the
remainder of such loss will be allocated as described above in this clause (i);
or (b) on or after the Credit Support Depletion Date, the Discount Fraction of
such loss will first be allocated to Component A-11-3 of the Class A-11
Certificates, until the Component Principal Balance thereof has been reduced to
zero, and then to Component A-5-3 of the Class A-5-3 Certificates and the
remainder of such loss will be allocated 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 and Components thereof
(other than the Principal Only Components), pro rata according to accrued but
unpaid interest thereon and then pro rata according to their Class Principal
Balances or Component Principal Balances in reduction of their respective Class
Principal Balance or Component Principal Balances, as applicable; provided,
however, that all losses attributable to interest allocable to the Class A-5
Certificates will be allocated to the Class A-11 Certificates until the
Principal Balance thereof has been reduced to zero.
Special Hazard Losses in excess of the Special Hazard Coverage, Fraud
Losses in excess of the Fraud Coverage and Bankruptcy Losses in excess of the
Bankruptcy Coverage shall be allocated among the related 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
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Certificate Principal Balance of all outstanding Classes of Certificates exceeds
the aggregate principal balance of the Loans, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect of each such
Loan whether or not paid and (ii) all amounts of principal in respect of each
such Loan that have been received or advanced and included in the related
Available Distribution Amount, and all losses in respect of such Loans that have
been allocated to the Certificates, on such Distribution Date or prior
Distribution Dates, then such excess will be deemed a principal loss and will be
allocated to the most junior Class of Subordinate Certificates then outstanding,
in reduction of the Certificate Principal Balance thereof.
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 4.3.
(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
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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 three
(3) days prior to each Distribution 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 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 to such
Certificateholder, the Trustee (if 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
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in lieu of foreclosure or other exercise of rights respecting
the Trustee's security interest in the Loans;
(iii) The amount of Special Hazard Coverage available
to the Senior Certificates remaining as of the close of
business on the applicable Determination Date;
(iv) The amount of Bankruptcy Coverage available to
the Certificateholders remaining as of the close of business
on the applicable Determination Date;
(v) The amount of Fraud Coverage available to the
Certificateholders remaining as of the close of business on
the applicable Determination Date;
(vi) The amount of Realized Losses 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;
(vii) 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 Cut-Off Date;
(viii) The amount of funds advanced by the Servicer
on the related Withdrawal Date; and
(ix) The total amount of Payoffs and Curtailments
received during the related Prepayment Period.
Upon 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 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 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.
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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. The Servicer is entitled to receive from the Custodial
Accounts for P&I established by the Servicer under its supervision amounts
received by the Servicer on particular Loans as late payments of principal and
interest or as Liquidation or Insurance Proceeds and respecting which the
Servicer has made an unreimbursed Advance of principal and interest. The
Servicer is also entitled to receive other amounts from the related Custodial
Accounts for P&I established by the Servicer under its supervision to reimburse
the Servicer for prior Nonrecoverable Advances.
In accordance with Section 3.3, Advances are reimbursable to the
Servicer from cash in the Custodial Account for P&I to the extent that the
Servicer shall determine that any such advances previously made are
Nonrecoverable Advances pursuant to Section 4.4.
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
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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 Depositor and the Servicer shall
not be obligated to, and shall not, make any advance that, after reasonable
inquiry and in its sole discretion, the Depositor or the Servicer shall
determine would be a Nonrecoverable Advance, and (b) the Depositor and the
Servicer shall be entitled to reimbursement for any Advance as provided in
Section 3.5 of this Agreement.
Section 4.5. Foreclosure Reports. Each year beginning in 1999 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 1999, 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 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.
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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 provide any
tax forms, instruments or other documents related thereto, as the
Trustee or
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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 National Bank will be the Certificate Administrator
and Paying Agent. If LaSalle National Bank ceases to serve as Certificate
Administrator or Paying Agent, the Trustee shall send written notice to all
Certificateholders (i) indicating that LaSalle National Bank 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.
(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 Trustee 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 Trustee,
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
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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 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
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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.
(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" (as
defined in Section 860E(e)(5) of the Code) 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
76
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 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:
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ANY RESALE, TRANSFER OR OTHER DISPOSITION OF
THIS CERTIFICATE MAY BE MADE ONLY IF THE
PROPOSED TRANSFEREE PROVIDES A TRANSFER
AFFIDAVIT 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 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) In the case of any Class A-11, Subordinate or Class R
Certificate presented for registration in the name of an employee
benefit plan or other plan or arrangement subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code (or
78
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, the Trustee or the Certificate
Registrar, if not the same Person as the Trustee, 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 a "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, the Certificate
Registrar or the Depositor.
So long as the Class A-11, Class M, Class B-1 and Class B-2
Certificates are Book Entry Certificates, each Person who has or who
acquires any Class A-11, Class M or Class B Certificates shall be
deemed by the acceptance or acquisition of such Certificate to have
represented that (a) such Person is not a Plan, and such Person is not
using "plan assets" of any such Plan to effect such acquisition or (b)
if the transferee is an insurance company and the source of funds used
to purchase such Certificate is an "insurance company general account"
(as such term is defined in PTCE 95-60) and the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied.
(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
79
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 the Rating Agency.
Notwithstanding the foregoing, any Class of Junior Subordinate
Certificate 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 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, initial Component 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
80
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 itself 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, 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxxxx, 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 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.
Upon the transfer of a Class Certificate each transferee that purchases
a Class A Certificate with the assets of one or more Plans shall be deemed to
represent that each such Plan qualifies as an "accredited investor" as defined
in Rule 501(a)(1) of Regulation D under the Securities act. If at any time the
Class A Certificates fail to receive a rating from any of S&P or Fitch that is
one of the three highest generic rating categories for that respective rating
agency, then such Class A Certificate shall not thereafter be eligible for
transfer to a Plan, and each transferee shall be deemed to represent that it is
not purchasing or holding its Class A Certificate with plan assets of a Plan.
All Certificates surrendered for exchange or transfer shall be
cancelled by the Trustee or any Authenticating Agent.
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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.
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.
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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
(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
83
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 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, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx Xxxxxxxx, is initially designated for said purposes.
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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 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,
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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 the 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 the 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 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.
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(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, marshalling 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, marshalling 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 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
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(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 the 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 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.
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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 the 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 as 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
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
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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 Section 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 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 the Rating Agency.
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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 the 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 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
Principal
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Balance not less than 25% of the aggregate 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 to 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
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.
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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, 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
93
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 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.
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
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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
the 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 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,
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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 a
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 the Rating Agency. If 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
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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
or separate trustee hereunder shall not be required to meet the terms of
eligibility as a successor trustee under Section 8.7 hereunder but 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 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
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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 National Bank. Any Custodian appointed shall
be an institution subject to supervision by federal or state authority, shall
have combined capital and surplus of at least $50,000,000 and 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 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
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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 15 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. Calculation of LIBOR. Until the Principal Balance of each
of the Adjustable Rate Certificates has been reduced to zero, the Trustee or the
Certificate Administrator, if any, shall establish LIBOR on each LIBOR
Determination Date as follows:
(a) If on such LIBOR Determination Date a rate for United States dollar
deposits for one month appears on the Dow Xxxxx Telerate System, page 3750,
LIBOR for the next Interest Accrual Period shall be equal to such rate as of
11:00 A.M., London time;
(b) If such rate does not appear on such page (or such other page as
may replace that page on that service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be selected
by the Trustee or the Certificate Administrator, if any, after consultation with
the Servicer), the rate shall be determined as follows:
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(i) The Trustee on the LIBOR Determination Date will request
the principal London offices of each of four major reference banks in
the London interbank market, as selected by the Trustee, to provide the
Trustee with its offered quotation for deposits in United States
dollars for the upcoming one-month period, commencing on the second
LIBOR Business Day immediately following such LIBOR Determination Date,
to prime banks in the London interbank market at approximately 11:00
a.m. London time on such LIBOR Determination Date and in a principal
amount that is representative for a single transaction in United States
dollars in such market at such time. If at least two such quotations
are provided, LIBOR determined on such LIBOR Determination Date will be
the arithmetic mean of such quotations.
(ii) If fewer than two quotations are provided, LIBOR
determined on such LIBOR Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 a.m. in New York City on
such LIBOR Determination Date by three major banks in New York City
selected by the Trustee for one-month United States dollar loans to
leading European banks, in a principal amount that is representative
for a single transaction in United States dollars in such market at
such time; provided, however, that if the banks so selected by the
Trustee are not quoting as mentioned in this sentence, LIBOR determined
on such LIBOR Determination Date will continue to be LIBOR as then
currently in effect on such LIBOR Determination Date.
(c) The establishment of LIBOR on each LIBOR Rate Adjustment Date by
the Trustee or the Certificate Administrator, if any, and the Trustee's or
Certificate Administrator's calculation of the rate of interest applicable to
the Class A-6 and Class A-7 Certificates for the related Interest Accrual Period
shall (in the absence of manifest error) be final and binding.
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 Pass-Through Rate to the
next scheduled Installment Due Date, less any Nonrecoverable Advances made with
respect to any such Loans and (b) the fair market value of all acquired property
in respect of Loans, less any Nonrecoverable Advances made with respect to any
such 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
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from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late ambassador of the United States to the Court of St. Xxxxx, 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) or (ii) 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 the 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
the 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 the Depositor's
election to purchase, the Depositor shall deposit in the Certificate Account on
the related Withdrawal Date an amount 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.
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
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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 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, or (b) to modify, eliminate or add to any provisions to such
extent as shall be
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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, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder.
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 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 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 the 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
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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.
Except as otherwise expressly provided herein no Certificateholder,
solely by virtue of its status as a 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
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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, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx Xxxxxxx - 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 LaSalle Home
Mortgage Corporation, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Servicer, or such other address as may hereafter be furnished to the
Depositor and the Trustee in writing by the 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 Rating Services, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx,
00000-0000, 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 IBCA, Inc., Xxx Xxxxx Xxxxxx Xxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxx Xxxxxxx, 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
105
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]
106
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/
--------------------------
Its: Senior Vice President
Pooling and Servicing Agreement
000
XXXXX XXXX XX XXXXX, NATIONAL
ASSOCIATION, as Trustee
By: /s/
--------------------------
Its:
-------------------------
Pooling and Servicing Agreement
108
LASALLE HOME MORTGAGE CORPORATION,
as Servicer
By: /s/
------------------------------
Its:
-----------------------------
Pooling and Servicing Agreement
109
STATE OF ___________________________ )
: ss.:
COUNTY OF ___________________________ )
On the ____ day of December, 1998, before me,___________________
___________________________, personally appeared Xxxxxxx X. Xxxxxxx, a Senior
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)
Pooling and Servicing Agreement
STATE OF ___________________________ )
: ss.:
COUNTY OF ___________________________ )
On the ____ day of December, 1998 before me,___________________
___________________________, personally appeared ________________________, known
to me to be _____________________ of Chase Bank of Texas, National Association,
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]
Pooling and Servicing Agreement
STATE OF ___________________________ )
: ss.:
COUNTY OF ___________________________ )
On the ____ day of December, 1998, before me,______________
___________________________, personally appeared __________________________,
known to me to be _____________________ of LaSalle Home Mortgage Corporation,
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]
Pooling and Servicing Agreement
EXHIBIT A
FORMS OF CERTIFICATES
X-0
Xxxxxxx X-0
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 December 23, 1998. 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 1998-5 Portion of the Class A-1
Principal Balance as of the
Cut-Off Date evidenced by
this Certificate:
Class A-1 Remittance Rate: 6.00% $
-----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-1 Principal Balance as of the Cut-Off Date:
$
-----------------------
----------------
Registered Owner Certificate No.__
A-1-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued
discount ("OID") of $_________________ per $1,000 of original certificate
[notional] principal balance, an initial class coupon rate of ____% per annum,
an annualized monthly compounded yield to maturity of ___%, an adjusted issue
price as a percentage of original certificate [notional] principal balance of
___% and OID allocable to the initial short accrual period of $___________ per
$1,000 of original certificate [notional] principal balance. The prepayment
assumption used by the issuer in pricing this certificate is ___% [PSA, CPR].
The yield to maturity was based upon fractional monthly compounding taking into
account the initial short accrual period.]
X-0-0
Xxxxxxx X-0
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is 6.05% 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 1998-5 Portion of the Class A-2
Principal Balance as of
the Cut-Off Date evidenced by
this Certificate:
Class A-2 Remittance Rate: 6.05% $
-----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-2 Principal Balance as of the Cut-Off Date:
$
------------------------
----------------
Registered Owner Certificate No.__
A-2-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
X-0-0
Xxxxxxx X-0
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is 6.20% 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 1998-5 Portion of the Class A-3
Principal Balance as of the
Cut-Off Date evidenced by
this Certificate:
Class A-3 Remittance Rate: 6.20% $
-----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-3 Principal Balance as of the Cut-Off Date:
$
------------------------
---------------
Registered Owner Certificate No.__
A-3-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-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 issue
date (the "Issue Date") of this Certificate is December 23, 1998. 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 1998-5 Portion of the Class A-4
Principal Balance as of
the Cut-Off Date evidenced by
this Certificate:
Class A-4 Remittance Rate: 6.00% $
----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-4 Principal Balance as of the Cut-Off Date:
$
-------------------------
----------------
Registered Owner Certificate No.__
A-4-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-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 issue
date (the "Issue Date") of this Certificate is December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is [___%] 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 1998-5 Portion of the Class A-5
Principal Balance as of
the Cut-Off Date evidenced by
this Certificate:
Class A-5 Remittance Rate: [___%] $
-----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-5 Principal Balance as of the Cut-Off Date:
$
-----------------------
----------------
Registered Owner Certificate No.__
A-5-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
X-0-0
Xxxxxxx X-0
CUSIP ____________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-6
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is a variable rate as described below.
[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 1998-5 Portion of the Class A-6
Principal Balance as of the
Cut-Off Date evidenced by this
Certificate: $
Class A-6 Remittance Rate: Initially 5.90%,
and for any Distribution Date after the First
Distribution Date will equal a per annum rate
of LIBOR + 0.85%, subject to a maximum rate
of 9.00% and a minimum rate of 0.85%.
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-6 Principal Balance as of the Cut-Off Date:
$
-----------------------
----------------
Registered Owner Certificate No.___
A-6-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-7
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is a variable rate as described below.
[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 1998-5 Portion of the Class A-7
Principal Balance as of the
Cut-Off Date evidenced by this
Certificate: $
Class A-7 Remittance Rate: Initially 9.30%,
and for any Distribution Date after the First
Distribution Date will equal a per annum rate
equal to 24.45% - (3.0 x LIBOR), subject to
a maximum rate of 24.45% and a minimum
rate of 0.00%.
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 2029
Last Scheduled Distribution Date: January 25, 2029
Class A-7 Principal Balance as of the Cut-Off Date:
$
-------------------------
----------------
Registered Owner Certificate No.__
A-7-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued
discount ("OID") of $_________________ per $1,000 of original certificate
[notional] principal balance, an initial class coupon rate of ____% per annum,
an annualized monthly compounded yield to maturity of ___%, an adjusted issue
price as a percentage of original certificate [notional] principal balance of
___% and OID allocable to the initial short accrual period of $___________ per
$1,000 of original certificate [notional] principal balance. The prepayment
assumption used by the issuer in pricing this certificate is ___% [PSA, CPR].
The yield to maturity was based upon fractional monthly compounding taking into
account the initial short accrual period.]
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-8
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is 6.75% 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 1998-5 Portion of the Class A-8
Principal Balance as of
the Cut-Off Date evidenced by
this Certificate:
Class A-8 Remittance Rate: 6.75% $
----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-8 Principal Balance as of the Cut-Off Date:
$
-----------------------
----------------
Registered Owner Certificate No.__
A-8-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued
discount ("OID") of $_________________ per $1,000 of original certificate
[notional] principal balance, an initial class coupon rate of ____% per annum,
an annualized monthly compounded yield to maturity of ___%, an adjusted issue
price as a percentage of original certificate [notional] principal balance of
___% and OID allocable to the initial short accrual period of $___________ per
$1,000 of original certificate [notional] principal balance. The prepayment
assumption used by the issuer in pricing this certificate is ___% [PSA, CPR].
The yield to maturity was based upon fractional monthly compounding taking into
account the initial short accrual period.]
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-9
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is 6.75% 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 1998-5 Portion of the Class A-9
Notional Amount as of the
Cut-Off Date evidenced by this
Certificate:
Class A-9 Remittance Rate: 6.75% applied $_____________________________
to the Class A-9 Notional Amount
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-9 Notional Amount as of the Cut-Off Date:
$
---------------------
----------------
Registered Owner Certificate No.__
A-9-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued
discount ("OID") of $_________________ per $1,000 of original certificate
[notional] principal balance, an initial class coupon rate of ____% per annum,
an annualized monthly compounded yield to maturity of ___%, an adjusted issue
price as a percentage of original certificate [notional] principal balance of
___% and OID allocable to the initial short accrual period of $___________ per
$1,000 of original certificate [notional] principal balance. The prepayment
assumption used by the issuer in pricing this certificate is ___% [PSA, CPR].
The yield to maturity was based upon fractional monthly compounding taking into
account the initial short accrual period.]
A-9-2
Exhibit A-10
CUSIP _____________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-10
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is 6.75% 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 1998-5 Portion of the Class
A-10 Notional Amount as of the
Cut-Off Date evidenced by this
Certificate:
Class A-10 Remittance Rate: 6.75% applied $____________________________
to the Class A-10 Notional Amount
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: December 25, 2013
Class A-10 Notional Amount as of the Cut-Off Date:
$
----------------------
----------------
Registered Owner Certificate No.__
A-10-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued
discount ("OID") of $_________________ per $1,000 of original certificate
[notional] principal balance, an initial class coupon rate of ____% per annum,
an annualized monthly compounded yield to maturity of ___%, an adjusted issue
price as a percentage of original certificate [notional] principal balance of
___% and OID allocable to the initial short accrual period of $___________ per
$1,000 of original certificate [notional] principal balance. The prepayment
assumption used by the issuer in pricing this certificate is ___% [PSA, CPR].
The yield to maturity was based upon fractional monthly compounding taking into
account the initial short accrual period.]
A-10-2
Exhibit A-11
CUSIP _____________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-11
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 December 23, 1998. The rate at
which interest is payable as of the Issue Date with respect to this Certificate
is [___%] 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.]
IN THE CASE OF ANY CLASS A-11 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 (i) 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
(ii) 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; PROVIDED THAT IF THE CLASS X- 00 CERTIFICATE IS A BOOK
ENTRY CERTIFICATE, SUCH TRANSFEREE SHALL BE DEEMED BY THE ACCEPTANCE OR
ACQUISITION OF SUCH CERTIFICATE TO HAVE MADE THE REPRESENTATIONS IN
CLAUSES (i) AND (ii) ABOVE.
A-11-1
Series 1998-5 Portion of the Class A-11
Principal Balance as of
the Cut-Off Date evidenced by
this Certificate:
Class A-11 Remittance Rate: [___%] $
-----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class A-11 Principal Balance as of the Cut-Off Date:
$
------------------------
----------------
Registered Owner Certificate No.__
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued
discount ("OID") of $_________________ per $1,000 of original certificate
[notional] principal balance, an initial class coupon rate of ____% per annum,
an annualized monthly compounded yield to maturity of ___%, an adjusted issue
price as a percentage of original certificate [notional] principal balance of
___% and OID allocable to the initial short accrual period of $___________ per
$1,000 of original certificate [notional] principal balance. The prepayment
assumption used by the issuer in pricing this certificate is ___% [PSA, CPR].
The yield to maturity was based upon fractional monthly compounding taking into
account the initial short accrual period.]
A-11-2
Exhibit A-12
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 December 23,
1998.
[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.]
IN THE CASE OF ANY CLASS M 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 (i) 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
(ii) 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; PROVIDED THAT IF THE CLASS M CERTIFICATE IS A BOOK ENTRY
CERTIFICATE, SUCH TRANSFEREE SHALL BE DEEMED BY THE ACCEPTANCE OR
ACQUISITION OF SUCH CERTIFICATE TO HAVE MADE THE REPRESENTATIONS IN
CLAUSES (i) AND (ii) ABOVE.
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.
A-12-1
Series 1998-5 Portion of the Class M
Principal Balance as of the
Cut-Off Date evidenced by this
Certificate:
Class M Remittance Rate: 6.75% $
----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class M Principal Balance as of the Cut-Off Date:
$
-----------------------
----------------
Registered Owner Certificate No.___
A-12-2
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-12-3
Exhibit A-13
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
"Code"). The issue date (the "Issue Date") of this Certificate is December 23,
1998.
[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.]
IN THE CASE OF ANY CLASS B-1 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 (i) 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
(ii) 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; PROVIDED THAT IF THE CLASS B-1 CERTIFICATE IS A BOOK
ENTRY CERTIFICATE, SUCH TRANSFEREE SHALL BE DEEMED BY THE ACCEPTANCE OR
ACQUISITION OF SUCH CERTIFICATE TO HAVE MADE THE REPRESENTATIONS IN
CLAUSES (i) AND (ii) ABOVE.
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.
A-13-1
Series 1998-5 Portion of the Class B-1
Principal Balance as of
the Cut-Off Date evidenced by
this Certificate:
Class B-1 Remittance Rate: 6.75% $
-----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class B-1 Principal Balance as of the Cut-Off Date:
$
-----------------------
----------------
Registered Owner Certificate No.___
A-13-2
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-13-3
Exhibit A-14
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
"Code"). The issue date (the "Issue Date") of this Certificate is December 23,
1998.
[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.]
IN THE CASE OF ANY CLASS B-2 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 (i) 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
(ii) 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; PROVIDED THAT IF THE CLASS B-2 CERTIFICATE IS A BOOK
ENTRY CERTIFICATE, SUCH TRANSFEREE SHALL BE DEEMED BY THE ACCEPTANCE OR
ACQUISITION OF SUCH CERTIFICATE TO HAVE MADE THE REPRESENTATIONS IN
CLAUSES (i) AND (ii) ABOVE;
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 1998-5 Portion of the Class B-2
Principal Balance as of the
Cut-Off Date evidenced by
this Certificate:
A-14-1
Class B-2 Remittance Rate: 6.75% $
---------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class B-2 Principal Balance as of the Cut-Off Date:
$
------------------------
---------------
Registered Owner Certificate No.__
A-14-2
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-14-3
Exhibit A-15
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 December 23,
1998.
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 1998-5 Portion of the Class B-3
Principal Balance as of the
Cut-Off Date evidenced by
this Certificate:
Class B-3 Remittance Rate: 6.75% $
-----------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January 25, 2029
Class B-3 Principal Balance as of the Cut-Off Date:
$
-----------------------
----------------
Registered Owner Certificate No.___
A-15-1
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-15-2
Exhibit A-16
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 December 23,
1998.
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 1998-5 Portion of the Class B-4
Principal Balance as of the
Cut-Off Date evidenced by
this Certificate:
Class B-4 Remittance Rate: 6.75% $
--------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
A-16-1
Last Scheduled Distribution Date: January 25, 2029
Class B-4 Principal Balance as of the Cut-Off Date:
$
------------------------
---------------
Registered Owner Certificate No.__
A-16-2
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-16-3
Exhibit A-17
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 December 23,
1998.
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 1998-5 Portion of the Class B-5 Principal
Balance as of the Cut-Off Date
evidenced by this Certificate:
Class B-5 Remittance Rate: 6.75% $
--------------------------------
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
A-17-1
Last Scheduled Distribution Date: January 25, 2029
Class B-5 Principal Balance as of the Cut-Off Date:
$
----------------------
----------------
Registered Owner Certificate No.___
A-17-2
[OID LEGEND
This certificate was issued on [December 23, 1998] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-17-3
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 FIDUCIARY RESPONSIBILITY
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, THE CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR.
B-1
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 1998-5 Percentage Interest evidenced by
this Class R Certificate in the
distributions to be made with
respect to the Class R
Certificate: ____%
Class R Remittance Rate: 6.75%.
Additionally, the Class R Certificates are
entitled to Excess Liquidation Proceeds
and the Residual Distribution Amount as
defined in the Pooling Agreement.
Cut-Off Date: December 1, 1998
First Distribution Date: January 25, 1999
Last Scheduled Distribution Date: January
25, 2029
Class R Principal Balance as of the
Cut-Off Date:
$
---------------------
----------------
Registered Owner Certificate No.___
B-2
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
SCHEDULE OF MORTGAGE LOANS
A copy of the Loan Schedule may be obtained by contacting the
Xxxxxxxxxx.
X-0
EXHIBIT E
FIELDS OF MORTGAGE 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]
Chase Bank of Texas, National Association, as Trustee
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Corporate Trust Group
[LASALLE NATIONAL BANK, AS CERTIFICATE REGISTRAR
000 XXXXX XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000-0000
ATTN: ABN AMRO SERIES 1998-5]
Re: Purchase of ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates Series 1998-5, 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]
Chase Bank of Texas, National Association
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Corporate Trust Group
AMN AMRO Mortgage Corporation
000 Xxxx Xxxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
[LASALLE NATIONAL BANK, AS CERTIFICATE REGISTRAR
000 XXXXX XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000-0000
ATTN: ABN AMRO SERIES 1998-5]
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 1998-5 (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 December 1, 1998, between ABN AMRO Mortgage
Corporation ("AMAC"), LaSalle Home Mortgage Corporation, as servicer (the
"Servicer") and Chase Bank of Texas, National Association, as trustee (the
"Trustee"), of the ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates, Series 1998-5.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants to
AMAC, 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 to 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 AMAC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from AMAC
concerning the Trust, the purchase by the Purchaser of the Purchased
Certificates and all matters relating thereto that AMAC 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 AMAC 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 AMAC, 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 AMAC 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 AMAC. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee and AMAC 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 AMAC, 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 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
G-2
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 the purchase is being made in reliance upon the availability of the
exemptive relief afforded 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 1998-5
(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 a
"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
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
___________, 199_.
[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 _____________, 19__.
--------------------
Notary Public
G-5
EXHIBIT H
[RESERVED]
H-1
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
[Date]
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, AS TRUSTEE
000 XXXXXX
XXXXXXX, XXXXX 00000
ATTN: CORPORATE TRUST GROUP
[LASALLE NATIONAL BANK, AS CERTIFICATE REGISTRAR
000 XXXXX XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000-0000
ATTN: ABN AMRO SERIES 1998-5]
RE: ABN AMRO MORTGAGE CORPORATION MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 1998-5 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 1998-5, Class R (the "Certificate"), pursuant
to Section 5.1 of the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of December 1, 1998 among ABN AMRO Mortgage
Corporation, as depositor (the "Company"), LaSalle Home Mortgage Corporation, as
servicer (the "Servicer"), and Chase Bank of Texas, National Association, 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.
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.
I-1
5. 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.
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.
Very truly yours,
[Seller]
By:____________________________
Name:______________________
Title:_____________________
I-2
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
J-1
organization 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 the purpose of the Owner relating to any sale of the Class R
Certificate by the Owner will be to impede the assessment or collection of tax.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
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.
J-2
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.
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 _____________________, 19__.
[Name of Owner]
By:________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
J-3
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 _________________ , 19__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the ___ day
of ________________, 19__
J-4
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-named Registered Owner is the registered
owner of certain interests in a trust fund (the "Certificate Trust Fund") whose
assets consist of, among other things, of 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, LaSalle Home Mortgage Corporation, as Servicer (the
"Servicer"), and Chase Bank of Texas, National Association, 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.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
______________________________
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling Agreement.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By:______________________________
Dated:___________________________
K-2
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-3
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-4
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-5
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 interest social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably constitute
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-6
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 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 Securities Act of 1933, as amended (the "1993
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 0000 Xxx.
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 December 1,
1998 between ABN AMRO Mortgage Corporation, as Depositor, LaSalle Home Mortgage
Corporation, as Servicer, and Chase Bank of Texas, National Association, 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 December 23, 1998 relating to the Rule 144A Securities
and has been furnished with all information regarding the Rule 144A Securities
that it has requested from the Seller, the Trustee, the Depositor or the
Servicer.
L-1
(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-1, Class B-2,
Class B-3, Class B-4, or 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 a
"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
Servicer or the Depositor.]
L-2
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.
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 Seller
By:____________________________________ By:_________________________________
Name: Name:
Title: Title:
Taxpayer Identification:_______________ Taxpayer Identification:____________
No.:___________________________________ No.:________________________________
Date:__________________________________ Date:_______________________________
L-3
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 $___________1/ 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.
--------
1/ 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
subdivisions, or any agency or instrumentality of the State or
its political subdivisions, 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 generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included
L-1-2
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
Yes No 144A Securities 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 is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) 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 one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
L-2-1
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
PLANNED PRINCIPAL BALANCES
DISTRIBUTION DATES CLASS A-1 CLASS A-2 CLASS A-3
------------------ --------- --------- ---------
Initial Balance............................ $10,299,000.00 $17,661,000.00 $45,022,000.00
January 25, 1999........................... 10,299,000.00 17,661,000.00 45,022,000.00
February 25, 1999.......................... 10,299,000.00 17,661,000.00 45,022,000.00
March 25, 1999............................. 10,299,000.00 17,661,000.00 45,022,000.00
April 25, 1999............................. 10,299,000.00 17,661,000.00 45,022,000.00
May 25, 1999............................... 10,299,000.00 17,661,000.00 45,022,000.00
June 25, 1999.............................. 10,299,000.00 17,661,000.00 45,022,000.00
July 25, 1999.............................. 10,299,000.00 17,661,000.00 45,022,000.00
August 25, 1999............................ 10,299,000.00 17,661,000.00 45,022,000.00
September 25, 1999......................... 10,299,000.00 17,661,000.00 45,022,000.00
October 25, 1999........................... 10,299,000.00 17,661,000.00 45,022,000.00
November 25, 1999.......................... 10,299,000.00 17,661,000.00 45,022,000.00
December 25, 1999.......................... 10,299,000.00 17,661,000.00 45,022,000.00
January 25, 2000........................... 10,299,000.00 17,661,000.00 45,022,000.00
February 25, 2000.......................... 10,299,000.00 17,661,000.00 45,022,000.00
March 25, 2000............................. 10,299,000.00 17,661,000.00 45,022,000.00
April 25, 2000............................. 10,299,000.00 17,661,000.00 45,022,000.00
May 25, 2000............................... 10,299,000.00 17,661,000.00 45,022,000.00
June 25, 2000.............................. 10,299,000.00 17,661,000.00 45,022,000.00
July 25, 2000.............................. 10,299,000.00 17,661,000.00 45,022,000.00
August 25, 2000............................ 10,299,000.00 17,661,000.00 45,022,000.00
September 25, 2000......................... 10,299,000.00 17,661,000.00 45,022,000.00
October 25, 2000........................... 10,299,000.00 17,661,000.00 45,022,000.00
November 25, 2000.......................... 10,299,000.00 17,661,000.00 45,022,000.00
December 25, 2000.......................... 10,299,000.00 17,661,000.00 45,022,000.00
January 25, 2001........................... 8,771,907.40 17,661,000.00 45,022,000.00
February 25, 2001.......................... 7,210,940.12 17,661,000.00 45,022,000.00
March 25, 2001............................. 5,635,100.07 17,661,000.00 45,022,000.00
April 25, 2001............................. 4,046,494.64 17,661,000.00 45,022,000.00
May 25, 2001............................... 2,452,959.18 17,661,000.00 45,022,000.00
June 25, 2001.............................. 870,023.37 17,661,000.00 45,022,000.00
July 25, 2001.............................. 0.00 16,958,671.24 45,022,000.00
August 25, 2001............................ 0.00 15,396,834.99 45,022,000.00
September 25, 2001......................... 0.00 13,845,447.22 45,022,000.00
October 25, 2001........................... 0.00 12,304,441.02 45,022,000.00
November 25, 2001.......................... 0.00 10,773,749.89 45,022,000.00
December 25, 2001.......................... 0.00 9,253,307.76 45,022,000.00
January 25, 2002........................... 0.00 7,743,049.03 45,022,000.00
February 25, 2002.......................... 0.00 6,242,908.50 45,022,000.00
March 25, 2002............................. 0.00 4,752,821.41 45,022,000.00
April 25, 2002............................. 0.00 $3,272,723.40 45,022,000.00
May 25, 2002............................... 0.00 1,802,550.57 45,022,000.00
June 25, 2002.............................. 0.00 342,239.42 45,022,000.00
July 25, 2002.............................. 0.00 0.00 43,919,726.88
August 25, 2002............................ 0.00 0.00 42,472,950.27
September 25, 2002......................... 0.00 0.00 41,041,847.34
October 25, 2002........................... 0.00 0.00 39,620,356.23
November 25, 2002.......................... 0.00 0.00 38,208,415.52
December 25, 2002.......................... 0.00 0.00 36,805,964.16
January 25, 2003........................... 0.00 0.00 35,412,941.53
February 25, 2003.......................... 0.00 0.00 34,029,287.37
March 25, 2003............................. 0.00 0.00 32,654,941.85
April 25, 2003............................. 0.00 0.00 31,289,845.53
O-1
DISTRIBUTION DATES Class A-1 Class A-2 Class A-3
------------------ --------- --------- ---------
May 25, 2003............................... $0.00 $0.00 $29,933,939.34
June 25, 2003.............................. 0.00 0.00 28,587,164.62
July 25, 2003.............................. 0.00 0.00 27,249,463.09
August 25, 2003............................ 0.00 0.00 25,920,776.85
September 25, 2003......................... 0.00 0.00 24,601,048.38
October 25, 2003........................... 0.00 0.00 23,290,220.55
November 25, 2003.......................... 0.00 0.00 21,988,236.59
December 25, 2003.......................... 0.00 0.00 20,695,040.10
January 25, 2004........................... 0.00 0.00 19,481,406.81
February 25, 2004.......................... 0.00 0.00 18,276,308.01
March 25, 2004............................. 0.00 0.00 17,079,688.61
April 25, 2004............................. 0.00 0.00 15,910,503.34
May 25, 2004............................... 0.00 0.00 14,783,256.45
June 25, 2004.............................. 0.00 0.00 13,696,623.35
July 25, 2004.............................. 0.00 0.00 12,649,319.74
August 25, 2004............................ 0.00 0.00 11,640,100.42
September 25, 2004......................... 0.00 0.00 10,667,758.09
October 25, 2004........................... 0.00 0.00 9,731,122.20
November 25, 2004.......................... 0.00 0.00 8,829,057.90
December 25, 2004.......................... 0.00 0.00 7,960,464.92
January 25, 2005........................... 0.00 0.00 7,208,429.47
February 25, 2005.......................... 0.00 0.00 6,485,906.57
March 25, 2005............................. 0.00 0.00 5,791,923.13
April 25, 2005............................. 0.00 0.00 5,125,536.27
May 25, 2005............................... 0.00 0.00 4,485,832.39
June 25, 2005.............................. 0.00 0.00 $3,871,926.31
July 25, 2005.............................. 0.00 0.00 3,282,960.40
August 25, 2005............................ 0.00 0.00 2,718,103.75
September 25, 2005......................... 0.00 0.00 2,176,551.34
October 25, 2005........................... 0.00 0.00 1,657,523.26
November 25, 2005.......................... 0.00 0.00 1,160,263.98
December 25, 2005.......................... 0.00 0.00 684,041.55
January 25, 2006........................... 0.00 0.00 372,986.83
February 25, 2006.......................... 0.00 0.00 77,022.69
March 25, 2006............................. 0.00 0.00 0.00
O-2
EXHIBIT P
TARGETED PRINCIPAL BALANCES
DISTRIBUTION DATES CLASS A-4 CLASS A-5-2 CLASS A-11-2 CLASS A-6 CLASS A-7
------------------ --------- ----------- ------------ --------- ----- ---
Initial Balance $97,921,000.00 $42,701,923.00 $1,708,077.00 $8,084,625.00 $2,694,875.00
January 25, 1999 96,728,042.34 42,942,121.32 1,717,684.93 8,068,238.53 2,689,412.84
February 25, 1999 95,439,453.28 43,183,670.75 1,727,346.91 8,051,759.89 2,683,919.96
March 25, 1999 94,057,114.25 43,426,578.90 1,737,063.24 8,035,188.55 2,678,396.18
April 25, 1999 92,582,143.59 43,670,853.40 1,746,834.22 8,018,524.00 2,672,841.33
May 25, 1999 91,015,349.98 43,916,501.95 1,756,660.16 8,001,765.71 2,667,255.23
June 25, 1999 89,358,344.84 44,163,532.28 1,766,541.37 7,984,913.16 2,661,637.71
July 25, 1999 87,612,386.01 44,411,952.15 1,776,478.17 7,967,965.81 2,655,988.59
August 25, 1999 85,778,719.55 44,661,769.38 1,786,470.86 7,950,923.13 2,650,307.70
September 25, 1999 83,859,122.38 44,912,991.83 1,796,519.76 7,933,784.59 2,644,594.85
October 25, 1999 81,854,934.54 45,165,627.41 1,806,625.18 7,916,549.64 2,638,849.87
November 25, 1999 79,767,608.89 45,419,684.06 1,816,787.45 7,899,217.75 2,633,072.57
December 25, 1999 77,599,495.07 45,675,169.79 1,827,006.88 7,881,788.36 2,627,262.77
January 25, 2000 75,352,430.36 45,932,092.62 1,837,283.79 7,864,260.93 2,621,420.29
February 25, 2000 73,028,403.34 46,190,460.64 1,847,618.51 7,846,634.91 2,615,544.95
March 25, 2000 70,629,844.66 46,450,281.98 1,858,011.37 7,828,909.75 2,609,636.56
April 25, 2000 68,158,661.61 46,711,564.81 1,868,462.68 7,811,084.88 2,603,694.94
May 25, 2000 65,617,156.37 46,974,317.37 1,878,972.78 7,793,159.74 2,597,719.89
June 25, 2000 63,007,667.00 47,238,547.90 1,889,542.00 7,775,133.78 2,591,711.24
July 25, 2000 60,332,824.44 47,504,264.73 1,900,170.68 7,757,006.43 2,585,668.79
August 25, 2000 57,595,594.82 47,771,476.22 1,910,859.14 7,738,777.11 2,579,592.35
September 25, 2000 54,799,807.14 48,040,190.78 1,921,607.72 7,720,445.25 2,573,481.73
October 25, 2000 51,953,189.37 48,310,416.85 1,932,416.76 7,702,010.27 2,567,336.74
November 25, 2000 49,065,678.25 48,582,162.94 1,943,286.61 7,683,471.59 2,561,157.18
December 25, 2000 46,146,284.83 48,855,437.61 1,954,217.60 7,664,828.63 2,554,942.86
January 25, 2001 44,728,824.35 49,130,249.45 1,965,210.07 7,646,080.81 2,548,693.59
February 25, 2001 43,326,778.47 49,406,607.10 1,976,264.38 7,627,227.53 2,542,409.16
March 25, 2001 41,925,413.18 49,684,519.27 1,987,380.86 7,608,268.20 2,536,089.38
April 25, 2001 40,527,185.28 49,963,994.69 1,998,559.88 7,589,202.23 2,529,734.06
May 25, 2001 39,139,940.26 50,245,042.16 2,009,801.78 7,570,029.01 2,523,342.99
June 25, 2001 37,778,560.03 50,527,670.52 2,021,106.92 7,550,747.94 2,516,915.97
July 25, 2001 36,442,628.43 50,811,888.67 2,032,475.64 7,531,358.41 2,510,452.79
August 25, 2001 35,131,684.53 51,097,705.54 2,043,908.32 7,511,859.82 2,503,953.26
September 25, 2001 33,845,274.04 51,385,130.13 2,055,405.30 7,492,251.55 2,497,417.17
October 25, 2001 32,582,949.17 51,674,171.49 2,066,966.96 7,472,532.98 2,490,844.31
November 25, 2001 31,344,268.54 51,964,838.70 2,078,593.65 7,452,703.49 2,484,234.48
December 25, 2001 30,128,797.11 52,257,140.92 2,090,285.73 7,432,762.47 2,477,587.47
January 25, 2002 28,936,106.06 52,551,087.34 2,102,043.59 7,412,709.27 2,470,903.07
February 25, 2002 27,765,772.74 52,846,687.21 2,113,867.59 7,392,543.27 2,464,181.07
March 25, 2002 26,617,380.54 53,143,949.82 2,125,758.09 7,372,263.84 2,457,421.26
April 25, 2002 25,490,518.87 53,442,884.54 2,137,715.48 7,351,870.34 2,450,623.43
May 25, 2002 24,384,782.97 53,743,500.76 2,149,740.13 7,331,362.13 2,443,787.36
June 25, 2002 23,299,773.94 54,045,807.96 2,161,832.42 7,310,738.56 2,436,912.84
July 25, 2002 22,235,098.57 54,349,815.63 2,173,992.73 7,289,998.98 2,429,999.65
August 25, 2002 21,190,369.30 54,655,533.34 2,186,221.44 7,269,142.74 2,423,047.57
September 25, 2002 20,165,204.14 54,962,970.71 2,198,518.93 7,248,169.18 2,416,056.38
October 25, 2002 19,159,226.59 55,272,137.42 2,210,885.60 7,227,077.65 2,409,025.87
P-1-1
DISTRIBUTION DATES CLASS A-4 CLASS A-5-2 CLASS A-11-2 CLASS A-6 CLASS A-7
------------------ --------- ----------- ------------ --------- ----- ---
November 25, 2002 $18,172,065.53 $55,583,043.20 $2,223,321.83 $7,205,867.47 $2,401,955.81
December 25, 2002 17,203,355.17 55,895,697.82 2,235,828.02 7,184,537.99 2,394,845.98
January 25, 2003 16,252,734.99 56,210,111.12 2,248,404.55 7,163,088.53 2,387,696.16
February 25, 2003 15,319,849.63 56,526,292.99 2,261,051.83 7,141,518.42 2,380,506.12
March 25, 2003 14,404,348.84 56,844,253.39 2,273,770.24 7,119,826.97 2,373,275.64
April 25, 2003 13,505,887.37 57,164,002.31 2,286,560.20 7,098,013.51 2,366,004.49
May 25, 2003 12,624,124.97 57,485,549.83 2,299,422.10 7,076,077.35 2,358,692.44
June 25, 2003 11,758,726.23 57,808,906.05 2,312,356.35 7,054,017.80 2,351,339.26
July 25, 2003 10,909,360.59 58,134,081.14 2,325,363.35 7,031,834.17 2,343,944.72
August 25, 2003 10,075,702.20 58,461,085.35 2,338,443.52 7,009,525.76 2,336,508.58
September 25, 2003 9,257,429.92 58,789,928.95 2,351,597.27 6,987,091.86 2,329,030.61
October 25, 2003 8,454,227.20 59,120,622.30 2,364,825.00 6,964,531.76 2,321,510.58
November 25, 2003 7,665,782.03 59,453,175.80 2,378,127.14 6,941,844.77 2,313,948.25
December 25, 2003 6,891,786.89 59,787,599.92 2,391,504.11 6,919,060.16 2,306,343.38
January 25, 2004 6,097,429.94 60,123,905.17 2,404,956.32 6,896,087.22 2,298,695.73
February 25, 2004 5,316,796.28 60,462,102.13 2,418,484.20 6,873,015.23 2,291,005.07
March 25, 2004 4,549,591.50 60,802,201.46 2,432,088.17 6,849,813.46 2,283,271.15
April 25, 2004 3,776,515.97 61,144,213.84 2,445,768.67 6,826,481.18 2,275,493.72
May 25, 2004 2,982,725.06 61,488,150.04 2,459,526.12 6,803,017.65 2,267,672.54
June 25, 2004 2,169,207.41 61,834,020.89 2,473,630.95 6,779,422.14 2,259,807.37
July 25, 2004 1,336,915.78 62,181,837.26 2,487,273.61 6,755,693.90 2,251,897.96
August 25, 2004 486,768.16 62,531,610.09 2,501,264.52 6,731,832.20 2,243,944.06
September 25, 2004 0.00 62,517,628.20 2,500,705.25 6,707,836.27 2,235,945.42
October 25, 2004 0.00 62,022,078.77 2,480,883.27 6,683,705.36 2,227,901.78
November 25, 2004 0.00 61,513,807.95 2,460,552.44 6,659,438.72 2,219,812.90
December 25, 2004 0.00 60,993,586.34 2,439,743.57 6,635,035.58 2,211,678.52
January 25, 2005 0.00 60,392,103.80 2,415,684.27 6,610,495.17 2,203,498.38
February 25, 2005 0.00 59,781,772.77 2,391,271.03 6,585,816.72 2,195,272.23
March 25, 2005 0.00 59,163,254.18 2,366,530.29 6,560,999.45 2,186,999.81
April 25, 2005 0.00 58,537,183.73 2,341,487.47 6,536,042.59 2,178,680.86
May 25, 2005 0.00 57,904,172.67 2,316,167.03 6,510,945.35 2,170,315.11
June 25, 2005 0.00 57,264,808.64 2,290,592.47 6,485,706.93 2,161,902.30
July 25, 2005 0.00 56,619,656.36 2,264,786.38 6,460,326.55 2,153,442.17
August 25, 2005 0.00 55,969,258.50 2,238,770.46 6,434,803.40 2,144,934.45
September 25, 2005 0.00 55,314,136.32 2,212,565.57 6,409,136.68 2,136,378.88
October 25, 2005 0.00 54,654,790.45 2,186,191.73 6,383,325.59 2,127,775.18
November 25, 2005 0.00 53,991,701.51 2,159,668.17 6,357,369.31 2,119,123.09
December 25, 2005 0.00 53,325,330.82 2,133,013.34 6,331,267.03 2,110,422.33
January 25, 2006 0.00 52,536,761.65 2,101,470.57 6,305,017.92 2,101,672.63
February 25, 2006 0.00 51,749,807.19 2,069,992.39 6,278,621.16 2,092,873.71
March 25, 2006 0.00 50,768,228.05 2,030,729.22 6,252,075.92 2,084,025.30
April 25, 2006 0.00 49,728,258.83 1,989,130.45 6,225,381.36 2,075,127.11
May 25, 2006 0.00 48,703,737.16 1,948,149.58 6,198,536.65 2,066,178.87
June 25, 2006 0.00 47,694,443.51 1,907,777.83 6,171,540.93 2,057,180.30
July 25, 2006 0.00 46,700,161.37 1,868,006.54 6,144,393.36 2,048,131.11
August 25, 2006 0.00 45,720,677.25 1,828,287.17 6,117,093.09 2,039,031.02
September 25, 2006 0.00 44,755,780.63 1,790,231.30 6,089,639.25 2,029,879.74
October 25, 2006 0.00 43,805,263.90 1,752,210.63 6,062,030.99 2,020,676.99
November 25, 2006 0.00 42,868,922.34 1,714,756.97 6,034,267.43 2,011,422.47
December 25, 2006 0.00 41,946,554.06 1,667,862.24 6,006,247.70 2,002,115.89
January 25, 2007 0.00 41,055,581.39 1,642,223.33 5,978,270.92 1,992,756.96
February 25, 2007 0.00 40,177,778.75 1,607,111.22 5,950,036.21 1,983,345.39
March 25, 2007 0.00 39,312,958.78 1,572,518.42 5,921,642.68 1,973,880.88
April 25, 2007 0.00 38,460,936.70 1,538,437.54 5,893,089.44 1,964,363.13
P-1-2
DISTRIBUTION DATES CLASS A-4 CLASS A-5-2 CLASS A-11-2 CLASS A-6 CLASS A-7
------------------ --------- ----------- ------------ --------- ----- ---
May 25, 2007 $0.00 $37,621,530.34 $1,504,861.28 $5,864,375.58 $1,954,791.84
June 25, 2007 0.00 36,794,560.02 1,471,782.47 5,835,500.21 1,945,166.72
July 25, 2007 0.00 35,979,848.61 1,439,194.01 5,806,462.41 1,935,487.45
August 25, 2007 0.00 35,177,221.42 1,407,088.92 5,777,261.28 1,925,753.74
September 25, 2007 0.00 34,386,506.20 1,375,460.31 5,747,895.89 1,915,965.28
October 25, 2007 0.00 33,607,533.09 1,344,301.38 5,718,365.32 1,906,121.76
November 25, 2007 0.00 32,840,134.34 1,313,605.44 5,688,668.64 1,896,222.87
December 25, 2007 0.00 32,084,145.69 1,283,365.88 5,658,804.92 1,886,268.30
January 25, 2008 0.00 31,354,461.65 1,254,178.52 5,628,773.21 1,876,257.73
February 25, 2008 0.00 30,635,427.70 1,225,417.16 5,598,572.58 1,866,190.85
March 25, 2008 0.00 29,926,894.18 1,197,075.82 5,568,202.07 1,856,067.34
April 25, 2008 0.00 29,228,713.42 1,169,148.59 5,537,660.72 1,845,886.89
May 25, 2008 0.00 28,540,739.82 1,141,629.64 5,506,947.58 1,835,649.18
June 25, 2008 0.00 27,862,829.80 1,114,513.24 5,476,061.68 1,825,353.88
July 25, 2008 0.00 27,194,841.72 1,087,793.72 5,445,002.04 1,815,000.67
August 25, 2008 0.00 26,536,635.95 1,061,465.49 5,413,767.69 1,804,589.22
September 25, 2008 0.00 25,888,074.73 1,035,523.04 5,382,357.65 1,794,119.21
October 25, 2008 0.00 25,249,022.23 1,009,960.94 5,350,770.93 1,783,590.30
November 25, 2008 0.00 24,619,344.49 984,773.83 5,319,006.53 1,773,002.17
December 25, 2008 0.00 23,998,909.41 959,956.43 5,287,063.46 1,762,354.48
January 25, 2009 0.00 23,387,586.68 935,503.52 5,254,940.71 1,751,646.90
February 25, 2009 0.00 22,785,247.82 911,409.96 5,222,637.27 1,740,879.09
March 25, 2009 0.00 22,191,766.13 887,670.69 5,190,152.12 1,730,050.71
April 25, 2009 0.00 21,607,016.62 864,280.71 5,157,484.24 1,719,161.42
May 25, 2009 0.00 21,030,876.08 841,235.09 5,124,632.60 1,708,210.87
June 25, 2009 0.00 20,463,222.94 818,528.96 5,091,596.17 1,697,198.73
July 25, 2009 0.00 19,903,937.37 796,157.54 5,058,373.91 1,686,124.64
August 25, 2009 0.00 19,352,901.16 774,116.09 5,024,964.78 1,674,988.26
September 25, 2009 0.00 18,809,997.72 752,399.95 4,991,367.72 1,663,789.24
October 25, 2009 0.00 18,275,112.11 731,004.52 4,957,581.68 1,652,527.23
November 25, 2009 0.00 17,748,130.98 709,925.27 4,923,605.59 1,641,201.87
December 25, 2009 0.00 17,228,942.51 689,157.73 4,889,438.39 1,629,812.80
January 25, 2010 0.00 16,717,436.44 668,697.49 4,855,079.00 1,618,359.67
February 25, 2010 0.00 16,213,504.06 648,540.19 4,820,526.34 1,606,842.11
March 25, 2010 0.00 15,717,038.14 628,681.55 4,785,779.32 1,595,259.77
April 25, 2010 0.00 15,227,932.94 609,117.34 4,750,836.84 1,583,612.28
May 25, 2010 0.00 14,746,084.18 589,843.39 4,715,697.81 1,571,899.27
June 25, 2010 0.00 14,271,389.02 570,855.58 4,680,361.13 1,560,120.38
July 25, 2010 0.00 13,803,746.08 552,149.86 4,644,825.68 1,548,275.23
August 25, 2010 0.00 13,343,055.32 533,722.23 4,609,090.34 1,536,363.45
September 25, 2010 0.00 12,889,218.13 515,568.74 4,573,153.99 1,524,384.67
October 25, 2010 0.00 12,442,137.27 497,685.51 4,537,015.50 1,512,338.50
November 25, 2010 0.00 12,001,716.81 480,068.69 4,500,673.73 1,500,224.58
December 25, 2010 0.00 11,567,862.17 462,714.50 4,464,127.54 1,488,042.52
January 25, 2011 0.00 11,140,480.10 445,619.22 4,427,375.77 1,475,791.93
February 25, 2011 0.00 10,719,478.62 428,779.16 4,390,417.27 1,463,472.43
March 25, 2011 0.00 10,304,767.03 412,190.70 4,353,250.88 1,451,083.63
April 25, 2011 0.00 9,896,255.88 395,850.25 4,315,875.43 1,438,625.15
May 25, 2011 0.00 9,493,856.97 379,754.29 4,278,289.75 1,426,096.59
June 25, 2011 0.00 9,097,483.34 363,899.34 4,240,492.65 1,413,497.55
July 25, 2011 0.00 8,707,049.21 348,281.97 4,202,482.94 1,400,827.65
August 25, 2011 0.00 8,322,469.99 332,898.80 4,164,259.42 1,388,086.48
September 25, 2011 0.00 7,943,662.27 317,746.49 4,125,820.90 1,375,273.64
October 25, 2011 0.00 7,570,543.81 302,821.75 4,087,166.16 1,362,388.73
P-1-3
DISTRIBUTION DATES CLASS A-4 CLASS A-5-2 CLASS A-11-2 CLASS A-6 CLASS A-7
------------------ --------- ----------- ------------ --------- ----- ---
November 25, 2011 $0.00 $7,203,033.52 $288,121.34 $4,048,293.99 $1,349,431.34
December 25, 2011 0.00 6,841,051.39 273,642.05 4,009,203.16 1,336,401.06
January 25, 2012 0.00 6,484,518.57 259,380.74 3,969,892.44 1,323,297.49
February 25, 2012 0.00 6,133,357.27 245,334.29 3,930,360.60 1,310,120.21
March 25, 2012 0.00 5,787,490.81 231,499.63 3,890,606.39 1,296,868.81
April 25, 2012 0.00 5,446,843.56 217,873.74 3,850,628.57 1,283,542.87
May 25, 2012 0.00 5,111,340.93 204,453.63 3,810,425.87 1,270,141.97
June 25, 2012 0.00 4,780,909.41 191,236.37 3,769,997.03 1,256,665.69
July 25, 2012 0.00 4,455,476.46 178,219.05 3,729,340.78 1,243,113.61
August 25, 2012 0.00 4,134,970.59 165,398.82 3,688,455.84 1,229,485.29
September 25, 2012 0.00 3,819,321.26 152,772.85 3,647,340.92 1,215,780.32
October 25, 2012 0.00 3,508,458.96 140,338.36 3,605,994.73 1,201,998.26
November 25, 2012 0.00 3,202,315.13 128,092.61 3,564,415.97 1,188,138.67
December 25, 2012 0.00 2,900,822.15 116,032.89 3,522,603.33 1,174,201.12
January 25, 2013 0.00 2,604,170.92 104,166.84 3,480,555.49 1,160,185.17
February 25, 2013 0.00 2,312,032.53 92,481.30 3,438,271.13 1,146,090.38
March 25, 2013 0.00 2,024,342.26 80,973.69 3,395,748.92 1,131,916.31
April 25, 2013 0.00 1,741,273.33 69,650.93 3,352,987.52 1,117,662.51
May 25, 2013 0.00 1,462,520.77 58,500.83 3,309,985.59 1,103,328.53
June 25, 2013 0.00 1,188,022.57 47,520.90 3,266,741.78 1,088,913.93
July 25, 2013 0.00 917,959.09 36,718.36 3,223,254.72 1,074,418.24
August 25, 2013 0.00 652,023.48 26,080.94 3,179,523.04 1,059,841.01
September 25, 2013 0.00 390,426.60 15,617.06 3,135,545.37 1,045,181.79
October 25, 2013 0.00 132,833.99 5,313.36 3,091,320.33 1,030,440.11
November 25, 2013 0.00 0.00 0.00 2,956,114.98 985,371.66
December 25, 2013 0.00 0.00 0.00 2,728,758.75 909,586.25
January 25, 2014 0.00 0.00 0.00 2,503,879.40 834,626.47
February 25, 2014 0.00 0.00 0.00 2,281,436.75 760,478.92
March 25, 2014 0.00 0.00 0.00 2,061,391.14 687,130.38
April 25, 2014 0.00 0.00 0.00 1,843,703.46 614,567.82
May 25, 2014 0.00 0.00 0.00 1,628,335.10 542,778.37
June 25, 2014 0.00 0.00 0.00 1,415,413.81 471,804.61
July 25, 2014 0.00 0.00 0.00 1,204,732.70 401,577.57
August 25, 2014 0.00 0.00 0.00 996,254.71 332,084.91
September 25, 2014 0.00 0.00 0.00 789,943.27 263,314.43
October 25, 2014 0.00 0.00 0.00 585,762.30 195,254.11
November 25, 2014 0.00 0.00 0.00 383,676.17 127,892.06
December 25, 2014 0.00 0.00 0.00 183,649.72 61,216.58
January 25, 2015 0.00 0.00 0.00 0.00 0.00
P-1-4
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 AND COLLATERAL FUND AGREEMENT
This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the
"Agreement") is made and entered into as of [DATE], between LaSalle Home
Mortgage Corporation (the "Depositor") and___________________(the "Purchaser").
PRELIMINARY STATEMENT
______________________(the "Owner") is the holder of the
entire interest in ABN AMRO Mortgage Corporation Multi-Class Mortgage
Pass-Through Certificates, Series 1998-5 (the "Certificates"). The Certificates
were issued pursuant to a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") among ABN AMRO Mortgage Corporation, as depositor, LaSalle
Home Mortgage Corporation, as servicer thereunder (the "Servicer"), and Chase
Bank of Texas, National Association, as trustee (the "Trustee").
The Owner intends to resell all of the Certificates directly
to the Purchaser on or promptly after the date hereof.
In connection with such sale, the parties hereto have agreed
that the Depositor, as Servicer, will engage in certain special servicing
procedures relating to foreclosures for benefit of the Purchaser, and that the
Purchaser will deposit funds in a collateral fund to cover any losses
attributable to such procedures as well as all advances and costs in connection
therewith, as set forth herein.
In consideration of the mutual agreements herein contained,
the receipt and sufficiency of which are hereby acknowledged, the Depositor and
the Purchaser agree to the following:
ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York are required
or authorized by law or executive order to be closed.
Collateral Fund: The fund established and maintained pursuant
to Section 3.01 hereof.
Collateral Fund Permitted Investments: Either: (i) obligations
of, or obligations fully guaranteed as to principal and interest by, the United
States, or any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States, (ii) a money market
fund rated in the highest rating category by a nationally recognized rating
agency
R-1
selected by the Depositor, (iii) cash, (iv) mortgage pass-through certificates
issued or guaranteed by GNMA, FNMA or FHLMC, (v) commercial paper (including
both non-interest bearing discount obligations and interest bearing obligations
payable on demand or on a specified date), the issuer of which may be an
affiliate of the Depositor, having at the time of such investment a rating of at
least A-1 by Standard and Poor's Corporation ("S&P") or at least P-1 by Xxxxx'x
Investors Service, Inc. ("Moody's") and (vi) demand and time deposits in,
certificates of deposit of, any depository institution or trust company (which
may be an affiliate of the Depositor) incorporated under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, so long as at the time
of such investment either (x) the long-term debt obligations of such depository
institution or trust company have a rating of at least Aa2 by Moody's or AA by
S&P or (y) the certificate of deposit or other unsecured short-term debt
obligations of such depository institution or trust company have a rating of at
least P-1 by Moody's or A-1 by S&P and, for each of the preceding clauses (i),
(iv), (v) and (vi), the maturity thereof shall be not later than the earlier to
occur of (A) 30 days from the date of the related investment and (B) the next
succeeding Distribution Date.
Commencement of Foreclosure: 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
foreclose, or (ii) in the case of a deed of trust, the posting, 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 and upon the consent
of the Purchaser which will be deemed given unless expressly withheld within two
Business Days of notification, (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.
Current Appraisal: With respect to any Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the related
Mortgaged Property obtained by the Purchaser at its expense from an appraiser
(which shall not be an affiliate of the Purchaser) acceptable to the Depositor
as nearly contemporaneously as practicable to the time of the Purchaser's
election, prepared based on the Depositor's customary requirements for such
appraisals.
Election to Delay Foreclosure: Any election by the Purchaser
to delay the Commencement of Foreclosure, made in accordance with Section
2.02(b).
Election to Foreclose: Any election by the Purchaser to
proceed with the commencement of Foreclosure, made in accordance with Section
2.03(a).
Required Collateral Fund Balance: As of any date of
determination, an amount equal to the aggregate of all amounts previously
required to be deposited in the Collateral Fund pursuant to Section 2.02(d)
(after adjustment for all withdrawals and deposits pursuant to Section 2.02(e))
and Section 2.03(b) (after adjustment for all withdrawals and deposits pursuant
to Section 2.03(c)) and Section 3.02 to be reduced by all withdrawals therefrom
pursuant to Section 2.02(g) and Section 2.03(d).
Section 1.02. Definitions Incorporated by Reference.
All capitalized terms not otherwise defined in this Agreement
shall have the meanings assigned in the Pooling and Servicing Agreement.
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ARTICLE II.
SPECIAL SERVICING PROCEDURES
Section 2.01. Reports and Notices.
(a) In connection with the performance of its duties
under the Pooling and Servicing Agreement relating to the realization upon
defaulted Loans, the Depositor, as Servicer, shall provide to the Purchaser the
following notices and reports:
(b) Within five Business Days after each Distribution
Date (or included in or with the monthly statement to Certificateholders
pursuant to the Pooling and Servicing Agreement), the Depositor shall provide to
the Purchaser a report indicating for the Trust the number of Loans that are (A)
thirty days, (B) sixty days, (C) ninety days or more delinquent or (D) in
foreclosure, and indicating for each such Loan the outstanding principal
balance.
(c) Prior to the Commencement of Foreclosure in
connection with any Loan, the Depositor shall provide the Purchaser with a
notice (sent by telecopier) of such proposed and imminent foreclosure, stating
the loan number and the aggregate amount owing under the Loan.
(d) If requested by the Purchaser, the Depositor
shall make its servicing personnel available (during their normal business
hours) to respond to reasonable inquiries by the Purchaser in connection with
any Loan identified in a report under subsection (a)(i)(B), (a)(i)(C), (a)(i)(D)
or (a)(ii) which has been given to the Purchaser; provided, that (1) the
Depositor shall only be required to provide information that is readily
accessible to its servicing personnel and is non- confidential and (2) the
Depositor shall not be required to provide any written information under this
subsection.
(e) In addition to the foregoing, the Depositor shall
provide to the Purchaser such information as the Purchaser may reasonably
request concerning each Loan that is at least sixty days delinquent and each
Loan which has become real estate owned, through the final liquidation thereof;
provided that the Depositor shall only be required to provide information that
is readily accessible to its servicing personnel and is non-confidential.
(f) With respect to all Loans which are serviced at
any time by the Depositor through a Subservicer, the Depositor shall be entitled
to rely for all purposes hereunder, including for purposes of fulfilling its
reporting obligations under this Section 2.01 on the accuracy and completeness
of any information provided to it by the applicable Subservicer.
Section 2.02. Purchaser's Election to Delay Foreclosure
Proceedings.
(a) The Purchaser directs the Depositor that in the
event that the Depositor does not receive written notice of the Purchaser's
election pursuant to subsection (b) below within 24 hours (exclusive of any
intervening non-Business Days) of transmission of the notice provided by the
Depositor under Section 2.01(a)(ii), subject to extension as set forth in
Section 2.02(b), the Depositor shall proceed with the Commencement of
Foreclosure in respect of such Loan in accordance with its normal foreclosure
policies without further notice to the Purchaser. Any foreclosure that has been
initiated may be discontinued (i) without notice to the Purchaser, if the Loan
has been brought current or if a refinancing or prepayment occurs with respect
to the Loan (including by means of a short payoff approved by the Depositor)
(ii) with notice to the Purchaser if the Depositor has reached the terms of a
forbearance agreement with the borrower. In such latter
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case the Depositor may complete such forbearance agreement unless instructed
otherwise by the Purchaser within one Business Day of notification.
(b) In connection with any Loan with respect to which
a notice under Section 2.01(a)(ii) has been given to the Purchaser, the
Purchaser may elect, for reasonable cause as determined by the Purchaser, to
instruct the Depositor to delay the Commencement of Foreclosure until such term
as the Purchaser determines that the Depositor may proceed with the Commencement
of Foreclosure. Such election must be evidenced by written notice received
within 24 hours (exclusive of any intervening non-Business Days) of transmission
of the notice provided by the Depositor under Section 2.01(a)(ii). Such 24 hour
period shall be extended for no longer than an additional four Business Days
after the receipt of the information if the Purchaser requests additional
information related to such foreclosure; provided, however that the Purchaser
will have at least one Business Day to respond to any requested additional
information. Any such additional information shall (i) not be confidential in
nature and (ii) be obtainable by the Depositor from existing reports,
certificates or statements or otherwise be readily accessible to its servicing
personnel. The Purchaser agrees that it has no right to deal with the mortgagor.
If the Depositor's normal foreclosure policy includes acceptance of a
deed-in-lieu of foreclosure or short payoff, the Purchaser will be notified and
given one Business Day to respond.
(c) With respect to any Loan as to which the
Purchaser has made an Election to Delay Foreclosure, the Purchaser shall obtain
a Current Appraisal as soon as practicable, and shall provide the Depositor with
a copy of such Current Appraisal.
(d) Within two Business Days of making any Election
to Delay Foreclosure, the Purchaser shall remit by wire transfer to the
Depositor, for deposit in the Collateral Fund, an amount, as calculated by the
Depositor, equal to the sum of (i) 125% of the greater of the outstanding
Principal Balance of the Loan and the value shown in the Current Appraisal
referred to in subsection (c) above (or, if such Current Appraisal has not yet
been obtained, the Depositor's estimate thereof, in which case the required
deposit under this subsection shall be adjusted upon obtaining of such Current
Appraisal), and (ii) three months' interest on the Loan at the applicable
Mortgage Rate. If any Election to Delay Foreclosure extends for a period in
excess of three months (such excess period being referred to herein as the
"Excess Period"), the Purchaser shall remit by wire transfer in advance to the
Depositor for deposit in the Collateral Fund the amount, as calculated by the
Depositor, equal to interest on the Loan at the applicable Mortgage Rate for the
Excess Period. The terms of this Agreement shall no longer apply to the
servicing of any Loan upon the failure of the Purchaser to deposit the above
amounts relating to the Loan within two Business Days of the Election to Delay
Foreclosure.
(e) With respect to any Loan as to which the
Purchaser has made an Election to Delay Foreclosure, the Depositor may withdraw
from the Collateral Fund from time to time amounts necessary to reimburse the
Depositor for all Advances and Liquidation Expenses thereafter made by the
Depositor as Servicer in accordance with the Pooling and Servicing Agreement. To
the extent that the amount of any such Liquidation Expense is determined by the
Depositor based on estimated costs, and the actual costs are subsequently
determined to be higher, the Depositor may withdraw the additional amount from
the Collateral Fund. In the event that the Loan is brought current by the
Mortgagor and the foreclosure action is discontinued, the amounts so withdrawn
from the Collateral Fund shall be redeposited therein as and to the extent that
reimbursement therefor from amounts paid by the Mortgagor is not prohibited
pursuant to the Pooling and Servicing Agreement. Except as provided in the
preceding sentence, amounts withdrawn from the Collateral Fund to cover Advances
and Liquidation Expenses shall not be redeposited therein or otherwise
reimbursed to the Purchaser. If and when any such Loan is brought current by the
Mortgagor, all amounts remaining in the Collateral Fund in respect of such
(after
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adjustment for all withdrawals and deposits pursuant to this subsection) shall
be released to the Purchaser.
(f) With respect to any Loan as to which the
Purchaser has made an Election to Delay Foreclosure, the Depositor shall
continue to service the Loan in accordance with its customary procedures (other
than the delay in Commencement of Foreclosure as provided herein). If and when
the Purchaser shall notify the Depositor that it believes that it is appropriate
to do so, the Depositor shall proceed with the Commencement of Foreclosure. In
any event, if the Loan is not brought current by the mortgagor by the time the
loan becomes 6 months delinquent, the Purchaser's election shall no longer be
effective and at the Purchaser's option, either (i) the Purchaser shall purchase
the Loan from the Trust Fund at a purchase price equal to the fair market value
as shown on the Current Appraisal, to be paid by (x) applying any balance in the
Collateral Fund to such purchase price, and (y) to the extent of any deficiency,
by wire transfer of immediately available funds to the Depositor or Trustee; or
(ii) the Depositor shall proceed with the Commencement of Foreclosure.
(g) Upon the occurrence of a liquidation with respect
to any Loan as to which the Purchaser made an Election to Delay Foreclosure and
as to which the Depositor proceeded with the Commencement of Foreclosure in
accordance with subsection (f) above, the Depositor shall calculate the amount,
if any, by which the value shown on the Current Appraisal obtained under
subsection (c) exceeds the actual sales price obtained for the related Mortgaged
Property (net of Liquidation Expenses and accrued interest related to the
extended foreclosure period), and the Depositor shall withdraw the amount of
such excess from the Collateral Fund, shall remit the same to the Trust Fund and
in its capacity as Servicer shall apply such amount as additional Liquidation
Proceeds pursuant to the Pooling and Servicing Agreement. After making such
withdrawal, all amounts remaining in the Collateral Fund in respect of such Loan
(after adjustment for all withdrawals and deposits pursuant to subsection (e))
shall be released to the Purchaser.
Section 2.03. Purchaser's Election to Commence Foreclosure
Proceedings.
(a) In connection with any Loan identified in a
report under Section 2.01(a)(i)(B), the Purchaser may elect, for reasonable
cause as determined by the Purchaser, to instruct the Depositor to proceed with
the Commencement of Foreclosure as soon as practicable. Such election must be
evidenced by written notice received by the Depositor by 5:00 p.m., New York
City time, on the third Business Day following the delivery of such report under
Section 2.01(a)(i).
(b) Within two Business Days of making any Election
to Foreclose, the Purchaser shall remit to the Depositor, for deposit in the
Collateral Fund, an amount, as calculated by the Depositor, equal to 125% of the
current Principal Balance of the Loan and three months' interest on the Loan at
the applicable Mortgage Rate. If and when any such Loan is brought current by
the Mortgagor, all amounts in the Collateral Fund in respect of such Loan shall
be released to the Purchaser. The terms of this Agreement shall no longer apply
to the servicing of any Loan upon the failure of the Purchaser to deposit the
above amounts relating to the Loans within two Business Days at the Election to
Foreclose.
(c) With respect to any Loan as to which the
Purchaser has made an Election to Foreclose, the Depositor shall continue to
service the Loan in accordance with its customary procedures (other than to
proceed with the Commencement of Foreclosure as provided herein). In connection
therewith, the Depositor shall have the same rights to make withdrawals for
Advances and Liquidation Expenses from the Collateral Fund as are provided under
Section 2.02(e), and the Depositor shall make reimbursements thereto to the
limited extent provided under such
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subsection. The Depositor shall not be required to proceed with the Commencement
of Foreclosure if (i) the same is stayed as a result of the Mortgagor's
bankruptcy or is otherwise barred by applicable law, or to the extent that all
legal conditions precedent thereto have not yet been complied with or (ii) the
Depositor believes there is a breach of representation or warranties by the
Depositor, which may result in a repurchase or substitution of such Loan, or
(iii) the Depositor reasonably believes the Mortgaged Property may be
contaminated with or affected by hazardous wastes or hazardous substances (and
the Depositor supplies the Purchaser with information supporting such belief).
The Depositor will repurchase or substitute a Loan pursuant to the preceding
clause (ii) within the time period specified in the Pooling and Servicing
Agreement. Any foreclosure that has been initiated may be discontinued (i)
without notice to the Purchaser if the Loan has been brought current or if a
refinancing or prepayment occurs with respect to the Loan (including by means of
a short payoff approved by the Depositor), or (ii) with notice to the Purchaser
if the Depositor has reached the terms of a forbearance agreement unless
instructed otherwise by the Purchaser within two Business Days of notification.
(d) Upon the occurrence of a liquidation with respect
to any Loan as to which the Purchaser made an Election to Foreclose and as to
which the Depositor proceeded with the Commencement of Foreclosure in accordance
with subsection (c) above, the Depositor shall calculate the amount, if any, by
which the Principal Balance of the Loan at the time of liquidation (plus all
unreimbursed Advances and Liquidation Expenses in connection therewith other
than those paid from the Collateral Fund) exceeds the actual sales price
obtained for the related Mortgaged Property, and the Depositor shall withdraw
the amount of such excess from the Collateral Fund, shall remit the same to the
Trust Fund and in its capacity as Servicer shall apply such amount as additional
Liquidation Proceeds pursuant to the Pooling and Servicing Agreement. After
making such withdrawal, all amounts remaining in the Collateral Fund (after
adjustment for all withdrawals and deposits pursuant to subsection (c)) in
respect of such Loan shall be released to the Purchaser.
Section 2.04. Termination.
(a) With respect to all Loans included in the Trust
Fund, the Purchaser's rights to make any Election to Delay Foreclosure or any
Election to Foreclose and the Depositor's obligations under Section 2.01 shall
terminate (i) at such time as the Certificate Principal Balance of the
Certificates has been reduced to zero, (ii) if the greater of (x) 43% (or such
lower or higher percentages that represents the Depositor's actual historical
loss experience with respect to the Loans in the related pool) of the aggregate
principal balance of all Loans that are in foreclosure or are more than 90 days
delinquent on a contractual basis and REO properties or if the aggregate amount
that the Depositor estimates will be required to be withdrawn from the
Collateral Fund with respect to Loans as to which the Purchaser has made an
Election to Delay Foreclosure or an Election to Foreclose exceeds (z) the
Outstanding Certificate Principal Balance of the Certificates, or (iii) upon any
transfer by the Purchaser of any interest (other than the minority interest
therein, but only if the transferee provides written acknowledgment to the
Depositor of the Purchaser's right hereunder and that such transferee will have
no rights hereunder) in the Certificates (whether or not such transfer is
registered under the Pooling and Servicing Agreement), including any such
transfer in connection with a termination of the Trust Fund. Except as set forth
above, this Agreement and the respective rights, obligations and
responsibilities of the Purchaser and the Depositor hereunder shall terminate
upon the later to occur of (i) the final liquidation of the last Loan as to
which the Purchaser made any Election to Delay Foreclosure or any Election to
Foreclose and the withdrawal of all remaining amounts in the Collateral Fund as
provided herein and (ii) ten (10) Business Day's notice.
(b) Purchaser's rights pursuant to Section 2.02 or
2.03 of this Agreement shall terminate with respect to a Loan as to which the
Purchaser has exercised its rights under
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Section 2.02 or 2.03 hereof, upon Purchaser's failure to deposit any amounts
required pursuant to Section 2.02(d) or 2.03(b).
(c) Neither the Servicer nor any of its directors,
officers, employees or agents shall be under any liability for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person 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. The Servicer and any director, officer,
employee or agent thereof may rely in good faith on any document of any kind
prima facie properly executed and submitted by an Person respecting any matters
arising hereunder.
ARTICLE III.
COLLATERAL FUND; SECURITY INTEREST
Section 3.01. Collateral Fund.
Upon receipt from the Purchaser of the initial amount required
to be deposited in the Collateral Fund pursuant to Article 11, the Depositor
shall establish and maintain with itself as a segregated account on its books
and records an account (the "Collateral Fund"), entitled "LaSalle Home Mortgage
Corporation, as Servicer, for the benefit of registered holders of ABN AMRO
Mortgage Corporation Multi-Class Mortgage Pass-Through Certificates, Series
1998-3." Amounts in the Collateral Fund shall continue to be the property of the
Purchaser, subject to the first priority security interest granted hereunder for
the benefit of the Certificateholders, until withdrawn from the Collateral Fund
pursuant to Section 2.02 or 2.03 hereof.
Upon the termination of this Agreement and the liquidation of
all Loans as to which the Purchaser has made any Election to Delay Foreclosure
or any Election to Foreclose pursuant to Section 2.04 hereof, the Depositor
shall distribute to the Purchaser all amounts remaining in the Collateral Fund
together with any investment earnings thereon.
In no event shall the Purchaser (i) take or cause the Trustee
or the Depositor to take any action that could cause any REMIC established under
the Trust Agreement to fail to qualify as a REMIC or cause the imposition on any
such REMIC of any "prohibited transaction" or "prohibited contribution" taxes or
(ii) cause the Trustee or the Depositor to fail to take any action necessary to
maintain the status of any such REMIC as a REMIC.
Section 3.02. Collateral Fund Permitted Investments.
The Depositor shall, at the written direction of the Purchaser
invest the funds in the Collateral Fund in Collateral Fund Permitted
Investments. Such direction shall not be changed more frequently than quarterly.
In the absence of any direction, the Depositor shall select such investments in
accordance with the definition of Collateral Fund Permitted Investments in its
discretion.
All income and gain realized from any investment as well as
any interest earned on deposits in the Collateral Fund (net of any losses on
such investments) and any payments of principal made in respect of any
Collateral Fund Permitted Investment shall be deposited in the Collateral Fund
upon receipt. All costs and realized losses associated with the purchase and
sale of
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Collateral Fund Permitted Investments shall be borne by the Purchaser and the
amount of net realized losses shall be deposited by the Purchaser in the
Collateral Fund. The Depositor shall periodically (but not more frequently than
monthly) distribute to the Purchaser upon request an amount of cash, to the
extent cash is available therefor in the Collateral Fund, equal to the amount by
which the balance of the Collateral Fund, after giving effect to all other
distributions to be made from the Collateral Fund on such date, exceeds the
Required Collateral Fund Balance. Any amounts so distributed shall be released
from the lien and security interest of this Agreement.
Section 3.03. Grant of Security Interest.
The Purchaser grants to the Depositor and the Trustee for the
benefit of the Certificateholders a security interest in and lien on all of the
Purchaser's right, title and interest, whether now owned or hereafter acquired,
in and to: (1) the Collateral Fund, (2) all amounts deposited in the Collateral
Fund and Collateral Fund Permitted Investments in which such amounts are
invested (and the distributions and proceeds of such investments) and (3) all
cash and non-cash proceeds of any of the foregoing, including proceeds of the
voluntary or involuntary conversion thereof (all of the foregoing collectively,
the "Collateral").
The Purchaser acknowledges the lien on and security interest
in the Collateral for the benefit of the Certificateholders. The Purchaser shall
take all actions requested by the Depositor or the Trustee as may be reasonably
necessary to perfect the security interest created under this Agreement in the
Collateral and cause it to be prior to all other security interests and liens,
including the execution and delivery to the Depositor for filing of appropriate
financing statements in accordance with applicable law. The Depositor shall file
appropriate continuation statements, or appoint an agent on its behalf to file
such statements, in accordance with applicable law.
Section 3.04. Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Fund at
any time are insufficient to cover any withdrawals therefrom that the Depositor
or the Trustee is then entitled to make hereunder, the Purchaser shall be
obligated to pay such amounts to the Depositor or the Trustee immediately upon
demand. Such obligation shall constitute a general corporate obligation of the
Purchaser.
ARTICLE IV.
MISCELLANEOUS PROVISIONS
Section 4.01. Amendment.
This Agreement may be amended from time to time by the
Depositor and the Purchaser by written agreement signed by the Depositor and the
Purchaser.
Section 4.02. 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.
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Section 4.03. Governing Law.
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 4.04. Notices.
All demands, notices and direction hereunder shall be in
writing or by telecopy and shall be deemed effective upon receipt to:
(a) in the case of the Depositor,
LaSalle Home Mortgage Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn:______________________________
Phone:_____________________________
or such other address as may hereafter be furnished in writing by the Depositor,
or
(b) in the case of the Purchaser, with respect to
notices pursuant to Section 2.01,
[Purchaser]
[Address]
Attn:______________________________
Phone:_____________________________
Fax:_______________________________
with respect to all other notices pursuant to
this Agreement,
[Address]
Attn:_______________________________
Phone:______________________________
Fax:________________________________
or such other address as may hereafter be furnished in writing by the Purchaser.
Section 4.05. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever, including
regulatory, 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.
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Section 4.06. Successors and Assigns.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders; provided, however, that the rights under this Agreement
cannot be assigned by the Purchaser without the consent of the Depositor.
Section 4.07. 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 4.08. Confidentiality.
The Purchaser agrees that all information supplied by or on
behalf of the Depositor pursuant to Sections 2.01 or 2.02, including individual
account information, is the property of the Depositor and the Purchaser agrees
to hold such information confidential and not to disclose such information.
IN WITNESS WHEREOF, the Depositor and the Purchaser 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.
LASALLE HOME MORTGAGE CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
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