================================================================================
ABN AMRO MORTGAGE CORPORATION
Depositor
and
ABN AMRO MORTGAGE GROUP, INC.
Servicer
and
JPMORGAN CHASE BANK
Trustee
-------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2002
-------------------------
$531,064,237
Mortgage Pass-Through Certificates
SERIES 2002-1A
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 CONVEYANCE OF TRUST FUND.................................................46
Section 2.2 ACCEPTANCE BY TRUSTEE....................................................49
Section 2.3 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR WITH RESPECT TO THE
LOANS....................................................................51
Section 2.4 AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF CERTIFICATES
AS REMIC REGULAR AND RESIDUAL INTERESTS..................................54
Section 2.5 DESIGNATION OF STARTUP DAY...............................................58
Section 2.6 NO CONTRIBUTIONS.........................................................58
Section 2.7. REPRESENTATIONS AND WARRANTIES OF THE SERVICER...........................58
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.1 SERVICER TO ACT AS SERVICER; ADMINISTRATION OF THE LOANS.................59
Section 3.2 COLLECTION OF CERTAIN LOAN PAYMENTS; CUSTODIAL ACCOUNT FOR P&I...........62
Section 3.3 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT FOR P&I.................64
Section 3.4 TAXES, ASSESSMENTS AND SIMILAR ITEMS; ESCROW ACCOUNTS....................65
Section 3.5 MAINTENANCE OF INSURANCE.................................................66
Section 3.6 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AND SUBSTITUTION
AGREEMENTS ..............................................................68
Section 3.7 REALIZATION UPON DEFAULTED LOANS.........................................68
Section 3.8 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES..........................70
Section 3.9 SERVICING COMPENSATION...................................................71
Section 3.10 REPORTS TO THE TRUSTEE; CUSTODIAL ACCOUNT FOR P&I STATEMENTS.............71
Section 3.11 ANNUAL STATEMENT AS TO COMPLIANCE........................................72
Section 3.12 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT..................72
Section 3.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE LOANS......72
Section 3.14 [RESERVED]...............................................................73
Section 3.15 SALE OF DEFAULTED LOANS AND REO PROPERTIES...............................73
Section 3.16 DELEGATION OF DUTIES.....................................................74
Section 3.17 [RESERVED]...............................................................74
i
Section 3.18 [RESERVED]...............................................................74
Section 3.19 APPOINTMENT OF A SPECIAL SERVICER........................................74
Section 3.20 ALLOCATION OF REALIZED LOSSES............................................75
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
Section 4.1 DISTRIBUTIONS TO CERTIFICATEHOLDERS......................................76
Section 4.2 STATEMENTS TO CERTIFICATEHOLDERS.........................................77
Section 4.3 ADVANCES BY THE SERVICER; DISTRIBUTION REPORTS TO THE TRUSTEE............78
Section 4.4 NONRECOVERABLE ADVANCES..................................................79
Section 4.5 FORECLOSURE REPORTS......................................................80
Section 4.6 ADJUSTMENT OF SERVICING FEES WITH RESPECT TO PAYOFFS.....................80
Section 4.7 PROHIBITED TRANSACTIONS TAXES AND OTHER TAXES............................80
Section 4.8 TAX ADMINISTRATION.......................................................81
Section 4.9 EQUAL STATUS OF SERVICING FEE............................................81
Section 4.10 APPOINTMENT OF PAYING AGENT AND CERTIFICATE ADMINISTRATOR................81
ARTICLE V
THE CERTIFICATES
Section 5.1 THE CERTIFICATES.........................................................82
Section 5.2 CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF PRINCIPAL AND
INTEREST; AUTHORIZED DENOMINATIONS ......................................88
Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES....................88
Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES........................89
Section 5.5 PERSONS DEEMED OWNERS....................................................90
Section 5.6 TEMPORARY CERTIFICATES...................................................90
Section 5.7 BOOK-ENTRY FOR BOOK-ENTRY CERTIFICATES...................................90
Section 5.8 NOTICES TO CLEARING AGENCY...............................................92
Section 5.9 DEFINITIVE CERTIFICATES..................................................92
Section 5.10 [RESERVED]...............................................................92
Section 5.11 [RESERVED]...............................................................92
Section 5.12 TRANSFER RESTRICTIONS....................................................92
Section 5.13 LEGENDING OF CERTIFICATES................................................96
Section 5.14 LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS...............................98
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.1 LIABILITY OF THE DEPOSITOR AND THE SERVICER.............................103
Section 6.2 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER................103
ii
Section 6.3 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS......................103
Section 6.4 SERVICER NOT TO RESIGN..................................................104
ARTICLE VII
DEFAULT
Section 7.1 EVENTS OF DEFAULT.......................................................104
Section 7.2 OTHER REMEDIES OF TRUSTEE...............................................106
Section 7.3 DIRECTIONS BY CERTIFICATEHOLDERS AND DUTIES OF TRUSTEE DURING EVENT OF
DEFAULT ................................................................106
Section 7.4 ACTION UPON CERTAIN FAILURES OF SERVICER AND UPON EVENT OF DEFAULT......106
Section 7.5 APPOINTMENT OF SUCCESSOR SERVICER.......................................107
Section 7.6 NOTIFICATION TO CERTIFICATEHOLDERS......................................108
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 DUTIES OF TRUSTEE.......................................................108
Section 8.2 CERTAIN MATTERS AFFECTING TRUSTEE.......................................110
Section 8.3 TRUSTEE NOT REQUIRED TO MAKE INVESTIGATION..............................111
Section 8.4 TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOANS............................111
Section 8.5 TRUSTEE MAY OWN CERTIFICATES............................................112
Section 8.6 SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES.............................112
Section 8.7 ELIGIBILITY REQUIREMENTS FOR TRUSTEE....................................113
Section 8.8 RESIGNATION AND REMOVAL OF TRUSTEE......................................113
Section 8.9 SUCCESSOR TRUSTEE.......................................................114
Section 8.10 MERGER OR CONSOLIDATION OF TRUSTEE......................................114
Section 8.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE...........................114
Section 8.12 APPOINTMENT OF CUSTODIANS...............................................115
Section 8.13 AUTHENTICATING AGENT....................................................116
Section 8.14 BLOOMBERG...............................................................116
Section 8.15 REPORTS TO SECURITIES AND EXCHANGE COMMISSION...........................117
ARTICLE IX
TERMINATION
Section 9.1 TERMINATION UPON PURCHASE BY THE SERVICER OR LIQUIDATION OF ALL LOANS...117
Section 9.2 TRUSTS IRREVOCABLE......................................................118
Section 9.3 ADDITIONAL TERMINATION REQUIREMENTS.....................................118
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 AMENDMENT...............................................................119
Section 10.2 RECORDATION OF AGREEMENT................................................120
iii
Section 10.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS..............................120
Section 10.4 GOVERNING LAW; JURISDICTION.............................................121
Section 10.5 NOTICES.................................................................121
Section 10.6 SEVERABILITY OF PROVISIONS..............................................122
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EXHIBITS
Exhibit A - Forms of Certificates
Exhibit B - Form of Residual Certificate
Exhibit C - [Reserved]
Exhibit D - Schedule of Loans
Exhibit E - Fields of Loan Information
Exhibit F - Form of Transfer Certificate for Exchange or Transfer From Rule 144A
Global Certificate to Regulation S Global Certificate
Exhibit G - Form of Transfer Certificate for Exchange or Transfer
From Regulation S Global Certificate to Rule 144A Global Certificate
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 - Benefit Plan Affidavit
Exhibit M - Planned Principal Balances
Exhibit N - [Reserved]
Exhibit O - [Reserved]
Exhibit P - [Reserved]
Exhibit Q - Bloomberg Data
Exhibit R - Form of Special Servicing Agreement
v
This Pooling and Servicing Agreement, dated and effective as of May 1,
2002 (this "Agreement"), is executed by and among ABN AMRO Mortgage Corporation,
as depositor (the "Depositor"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer"), and JPMorgan Chase Bank, as trustee (the "Trustee"). Capitalized
terms used in this Agreement and not otherwise defined have the meanings
ascribed to such terms in Article I hereof.
PRELIMINARY STATEMENT
The Depositor at the Closing Date is the owner of the Loans and the
other property being conveyed by it to the Trustee for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from the
Trust Fund as consideration for its transfer to the Trust Fund of the Loans and
certain other assets and will be the owner of the Certificates. The Depositor
has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Trustee of the Loans and the issuance to the Depositor of
the Certificates representing in the aggregate the entire beneficial ownership
of the Trust Fund. All covenants and agreements made by the Depositor, the
Servicer and the Trustee herein with respect to the Loans and the other property
constituting the Trust Fund are for the benefit of the Holders from time to time
of the Certificates. The Depositor and the Servicer are entering into this
Agreement, and the Trustee is accepting the trust created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
The Certificates issued hereunder, other than the Class B-3, Class B-4
and Class B-5 Certificates have been offered for sale pursuant to a Prospectus,
dated March 22, 2002, and a Prospectus Supplement, dated May 22, 2002 of the
Depositor (together, the "Prospectus"). The Class B-3, Class B-4 and Class B-5
Certificates have been offered for sale pursuant to a Private Placement
Memorandum dated May 23, 2002. The Trust Fund created hereunder is intended to
be the "Trust" as described in the Prospectus and the Private Placement
Memorandum and the Certificates are intended to be the "Certificates" described
therein.
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the Loans and other related assets in the Trust Fund
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC I." Component R-1 of the
Class R Certificate will represent the sole class of "residual interests" in
REMIC I for purposes of the REMIC Provisions under federal income tax law. The
REMIC I Regular Interests will consist of (i) one REMIC I Regular Interest for
each Loan that is not a Discount Loan, with a Class Principal Balance equal to
the balance of such Loan, and an interest rate equal to the Pass-Through Rate
for such Loan and (ii) two REMIC I Regular Interests for each Discount Loan,
comprised of (1) a principal-only interest with an initial Class Principal
Balance equal to the Group I Discount Fraction for each Group I Discount Loan
multiplied by the balance of such Group I Discount Loan as of the Closing Date
or Group II Discount Fraction for each Group II Discount Loan multiplied by the
balance of such Group II Discount Loan as of the Closing Date, as applicable,
and a rate equal to 0.00% per annum and (2) a REMIC I Regular Interest with a
Class Principal Balance equal to the balance of such Discount Loan minus the
Class Principal Balance of the related principal-only interest, as applicable,
and a rate equal to the Pass-Through Rate of such
1
Loan multiplied by a fraction, the numerator of which is the balance of such
Loan, and the denominator of which is the Class Principal Balance of such REMIC
I Regular Interest.
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 Pass- Through Rate and initial Class Principal Balance for
each REMIC II Regular Interest which, together with the Class R-2 Component,
constitute the entire beneficial interests in REMIC II.
REMIC II PASS INITIAL UNCERTIFICATED
DESIGNATION THROUGH RATE PRINCIPAL BALANCE
-------------------------------- ---------------------- -----------------------
REMIC II Regular Variable(1) $ 299,965,797.84
Interest I-NON-PO
REMIC II Regular 0.00% $ 3,069,004.00
Interest I-PO
REMIC II Regular Variable(1) $ 224,160,969.60
Interest II-NON-PO
REMIC II Regular 0.00% $ 3,868,466.00
Interest II-PO
-------------------
(1) Calculated at a rate equal to the Adjusted Net WAC as defined
herein.
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC II Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC III". Component R-3 of the Class R Certificate will represent the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designations, the Pass- Through Rate and initial Class Principal Balance for
each REMIC III Regular Interest which, together with the Class R-3 Component,
constitute the entire beneficial interests in REMIC III.
REMIC III
PASS-THROUGH INITIAL UNCERTIFICATED
DESIGNATION RATE PRINCIPAL BALANCE
---------------------- --------------- ---------------------------
REMIC III Regular Variable(1) $ 299,870,339.86
Interest I-ZZZ
REMIC III Regular Variable(1) $ 95,457.98
Interest I-SUB
REMIC III Regular Variable(7) $ 3,069,004.00
Interest I-PO
REMIC III Regular Variable (2) $ N/A(3)
Interest I-IO
REMIC III Regular Variable(4) $ 224,089,130.90
Interest II-ZZZ
REMIC III Regular Variable(4) $ 71,838.70
Interest II-SUB
REMIC III Regular Variable(8) $ 3,868,466.00
Interest II-PO
2
REMIC III Regular Variable (5) $ N/A(6)
Interest II-IO
-------------------
(1) Calculated at a rate equal to (i) with respect to each Interest
Accrual Period up to and including the Interest Accrual Period in February 2007,
5.85% per annum, subject to a maximum rate equal to the Adjusted Net WAC for
Loan Group I for the related Distribution Date and (ii) thereafter, the Net WAC
for Loan Group I for the related Distribution Date.
(2) With respect to any Interest Accrual Period up to and including the
Interest Accrual Period in February 2007, (i) calculated at a rate equal to the
greater of (a) zero and (b) the excess of the Adjusted Net WAC rate for Loan
Group I over 5.85% and (ii) thereafter, zero.
(3) A notional amount equal to the Class Principal Balance of REMIC II
Regular Interest I- NON-PO.
(4) Calculated at a rate equal to (i) with respect to each Interest
Accrual Period up to and including the Interest Accrual Period in February 2005,
5.35% per annum, subject to a maximum rate equal to the Adjusted Net WAC for
Loan Group II for the related Distribution Date and (ii) thereafter, the Net WAC
for Loan Group II for the related Distribution Date.
(5) With respect to any Interest Accrual Period up to and including the
Interest Accrual Period in February 2005, (i) calculated at a rate equal to the
greater of (a) zero and (b) the excess of the Adjusted Net WAC rate for Loan
Group II over 5.35% and (ii) thereafter, zero.
(6) A notional amount equal to the Class Principal Balance of REMIC II
Regular Interest II-NON-PO.
(7) With respect to any Interest Accrual Period (i) up to and including
the Interest Accrual Period in February 2007, 0.00% and (ii) thereafter, the Net
WAC for Loan Group I.
(8) With respect to any Interest Accrual Period (i) up to and including
the Interest Accrual Period in February 2005, 0.00% and (ii) thereafter, the Net
WAC for Loan Group II.
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC III Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC IV". Component R-4 of the Class R Certificate will represent the sole
class of "residual interests" in REMIC IV 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-4 Component, constitute
the entire beneficial interests in REMIC IV. Determined solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests and for each Class of
Certificates shall be (i) with respect to the Class IA and Class IIA
Certificates, the first Distribution Date that is at least two years after the
end of the remaining amortization schedule of the Loan in the related Loan Group
that has, as of the Closing Date, the longest remaining amortization schedule,
irrespective of its
3
scheduled maturity, and (ii) with respect to the Subordinate Certificates and
the Class R Certificate, the first Distribution Date that is at least two years
after the end of the remaining amortization schedule of the Loan in the Mortgage
Pool that has, as of the Closing Date, the longest remaining amortization
schedule, irrespective of its scheduled maturity. The following table sets forth
the designation, Remittance Rate, initial Class Principal Balance, and Last
Scheduled Distribution Date for each Class of Certificates comprising the
beneficial interests in REMIC IV and the Class R Certificate:
INITIAL CLASS
PRINCIPAL
REMITTANCE OR NOTIONAL LAST SCHEDULED
DESIGNATION RATE (1) BALANCE DISTRIBUTION DATE*
----------- ------------- -------------------- -----------------
Class IA-1 Adjustable(6) $ 139,063,000.00 June 25, 2032
Class IA-2 Adjustable(6) $ 151,357,000.00 June 25, 2032
Class IA-3 0.00%(2) $ 3,069,004.00 June 25, 2032
Class IA-4 5.85% $ 7,530,413.28(4) June 25, 2032
Class IIA-1 Adjustable(6) $ 83,004,000.00 June 25, 2032
Class IIA-2 Adjustable(6) $ 37,728,000.00 June 25, 2032
Class IIA-3 Adjustable(6) $ 96,245,000.00 June 25, 2032
Class IIA-4 0.00%(3) $ 3,868,466.00 June 25, 2032
Class IIA-5 5.35% $ 8,457,890.12(5) June 25, 2032
Class M Variable(7) $ 6,637,000.00 June 25, 2032
Class B-1 Variable(7) $ 3,982,000.00 June 25, 2032
Class B-2 Variable(7) $ 2,655,000.00 June 25, 2032
Class B-3 Variable(7) $ 1,327,000.00 June 25, 2032
Class B-4 Variable(7) $ 796,000.00 June 25, 2032
Class B-5 Variable(7) $ 1,332,667.44 June 25, 2032
Class R+(8) Adjustable(6) $ 100.00 June 25, 2032
-----------------------
* The Distribution Date in the month after the maturity date for the latest
maturing Loan. + The Class R Certificate is entitled to receive the Residual
Distribution Amount and Excess
Liquidation Proceeds.
(1) Interest distributed to the Certificates (other than the Principal Only
Certificates prior to the Distribution Date in April 2007 in the case of
the Class IA-3 Certificates and prior to the Distribution Date in April
2005 in the case of the Class IIA-4 Certificates) on each Distribution
Date will have accrued during the preceding calendar month at the
applicable per annum Remittance Rate.
(2) The Class IA-3 Certificates will initially receive principal only in
respect of the Group I Loans with Pass-Through Rates that are less than
5.85% per annum, and will not be entitled to payments of interest.
Beginning with the Interest Accrual Period in March 2007, the Class IA-3
Certificates will receive interest based on a rate equal to the Net WAC
for Loan Group I.
(3) The Class IIA-4 Certificates will initially receive principal only in
respect of the Group II Loans with Pass-Through Rates that are less than
5.35% per annum and will not be entitled
4
to payments of interest. Beginning with the Interest Accrual Period in
March 2005, the Class IIA-4 Certificates will receive interest based on
a rate equal to the Net WAC for Loan Group II.
(4) The Class IA-4 Certificates will accrue interest on the Class IA-4
Notional Amount (as defined herein). After the Distribution Date in
March 2007, the Class IA-4 Certificates will no longer be entitled to
receive distributions of any kind.
(5) The Class IIA-5 Certificates will accrue interest on the Class IIA-5
Notional Amount (as defined herein). After the Distribution Date in
March 2005, the Class IIA-5 Certificates will no longer be entitled to
receive distributions of any kind.
(6) The Class IA-1 Certificates, Class IA-2 Certificates, Class IIA-1
Certificates, Class IIA-2 Certificates, Class IIA-3 Certificates and
Class R Certificate will accrue interest on the Class IA-1 Interest Rate
(as defined herein), Class IA-2 Interest Rate (as defined herein), Class
IIA- 1 Interest Rate (as defined herein), Class IIA-2 Interest Rate (as
defined herein), Class IIA-3 Interest Rate (as defined herein) and Class
R Interest Rate (as defined herein), respectively.
(7) The interest rate on these Classes of Certificates will be an annual
rate equal to the Subordinate Interest Rate (as defined herein). The
initial interest rate on each Class of these Certificates will be
approximately 5.635% per annum.
(8) The Class R Certificate will be comprised of four components, component
R-1, which represents the sole residual interest in REMIC I (as defined
herein), component R-2, which represents the sole residual interest in
REMIC II (as defined herein), component R-3, which represents the sole
residual interest in REMIC III (as defined herein), and component R-4,
which represents the sole residual interest in REMIC IV (as defined
herein).
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W I T N E S S E T H
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article:
ADVANCE: An Advance made by the Servicer pursuant to Section 4.3.
ADJUSTED NET WAC: With respect to any Distribution Date and either Loan
Group, the product of (a) the applicable Net WAC for such Loan Group and (b) a
fraction, the numerator of which is equal to the aggregate Scheduled Principal
Balance of the Loans in the related Loan Group, and the denominator of which is
such aggregate Scheduled Principal Balance minus the Class Principal Balance of
the related Principal Only Certificates. The Adjusted Net WAC for Loan Group I
will equal the Net WAC for such Loan Group after the Interest Accrual Period in
February 2007, and the Adjusted Net WAC for Loan Group II will equal the Net WAC
for such Loan Group after the Interest Accrual Period in February 2005.
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.
AGENT MEMBERS: Members of, or participants in, a Clearing Agency.
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: As of the Closing Date, approximately
3.15% and thereafter, with respect to any Distribution Date, is equal to the
following fraction:
the aggregate of the Class Principal Balances of the Subordinate
Certificates Immediately Prior to Such Distribution Date
----------------------------------------------------------------------------
the aggregate Scheduled Principal Balance of all of the
Loans immediately prior to such Distribution Date.
6
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.
APPLICABLE PROCEDURES: As defined in Section 5.7 thereof.
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 Class IA-3, Class IA-4, Class IIA-4, Class IIA-5 and Subordinate
Certificates and the 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 Class IA-3 and Class IIA-4 Certificates, an initial
Certificate Principal Balance equal to $120,000 each and integral multiples of
$1 in excess thereof. With respect to the Class IA-4 and Class IIA-5
Certificates, an initial Class Notional Amount equal to $500,000 each and
integral multiples of $1 in excess thereof. With respect to the Subordinate
Certificates, an initial Certificate Principal Balance equal to $100,000 each
and integral multiples of $1 in excess thereof, except with respect to the Class
B-5 Certificates which may be issued in a different amount that is not a
multiple of $1. With respect to the Class R Certificate, one Certificate with a
Percentage Interest equal to 100%.
AVAILABLE DISTRIBUTION AMOUNT: As determined separately for each Loan
Group, the sum of the following amounts:
(1) the total amount of all cash received by or on behalf of the
Servicer with respect to such related Loans by the Determination Date
for such Distribution Date and not previously distributed (including
Liquidation Proceeds and Insurance Proceeds), except:
(a) all Prepaid Monthly Payments;
(b) all Curtailments received after the applicable
Prepayment Period (together with any interest payment received
with such prepayments to the extent that
7
it represents the payment of interest accrued on a related Loan
subsequent to the applicable Prepayment Period);
(c) all Payoffs received after the applicable Prepayment
Period (together with any interest payment received with such
Payoffs to the extent that it represents the payment of interest
accrued on such Loan for the period subsequent to the applicable
Prepayment Period);
(d) Insurance Proceeds and Liquidation Proceeds on such
Loans received after the applicable Prepayment Period;
(e) all amounts in the Custodial Account for P & I which
are due and reimbursable to the Servicer pursuant to the terms of
this Agreement;
(f) the Servicing Fee for each such Loan; and
(g) Excess Liquidation Proceeds;
(2) to the extent advanced by the Servicer and not previously
distributed, the amount of any Advance made by the Servicer to the
Trustee with respect to such Distribution Date relating to such related
Loans;
(3) to the extent advanced by the Servicer and not previously
distributed, any amount payable as Compensating Interest by the Servicer
on such Distribution Date relating to such related Loans; and
(4) the total amount, to the extent not previously distributed,
of all cash received by the Distribution Date by the Trustee or the
Servicer, in respect of a Purchase Obligation under Section 2.2 and
Section 2.3 or any permitted repurchase of a Loan.
PROVIDED THAT, on any Distribution Date on or after the date on which the
aggregate Certificate Principal Balances of the Class IA Certificates or the
Class IIA Certificates and the Class R Certificate has been reduced to zero, the
Available Distribution Amount, to the extent attributable to principal (in
excess of that needed to reduce such aggregate Certificate Principal Balances of
the Class IA Certificates or the Class IIA Certificates and Class R Certificate
to zero) for the Loan Group relating to such Certificates that have been paid in
full, shall be reduced by the Class Principal Balance of the remaining Class IA
Certificates or Class IIA Certificates and Class R Certificate, as applicable,
that have not been paid in full and such amount shall be added to the Available
Distribution Amount for the Loan Group relating to such Certificates, PROVIDED
FURTHER THAT on such Distribution Date either (a) the Aggregate Subordinate
Percentage for such Distribution Date is less than 200% times the initial
Aggregate Subordinate Percentage, or (b) the average outstanding Principal
Balance of the Loans in either Loan Group delinquent 60 days or more over the
last six months, as a percentage of the corresponding Group I or Group II
Subordinate Amount, is greater than or equal to 50%.
8
BANKRUPTCY COVERAGE: As of the Cut-Off Date, $120,574 and thereafter,
the initial Bankruptcy Coverage amount less (a) any scheduled or permissible
reduction in the applicable amount of Bankruptcy Coverage pursuant to this
definition and (b) Bankruptcy Losses allocated to the Certificates. The
Bankruptcy Coverage may be reduced upon written confirmation from each Rating
Agency that such reduction will not adversely affect the then current ratings
assigned to the Certificates by each Rating Agency.
BANKRUPTCY LOSS: A loss on a Loan arising out of (i) a reduction in the
scheduled Monthly Payment for such Loan by a court of competent jurisdiction in
a case under the United States Bankruptcy Code, other than any such reduction
that arises out of clause (ii) of this definition of "Bankruptcy Loss,"
including, without limitation, any such reduction that results in a permanent
forgiveness of principal, or (ii) with respect to any Loan, a valuation, by a
court of competent jurisdiction in a case under such Bankruptcy Code, of the
related Mortgaged Property in an amount less than the then outstanding Principal
Balance of such Loan.
BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a DTC Participant or an Indirect DTC
Participant or a Person holding a beneficial interest in any Definitive
Certificate.
BOOK-ENTRY CERTIFICATES: The Class IA Certificates, the Class IIA
Certificates and the Subordinate Certificates, and beneficial ownership and
transfers of which shall be made through book entries as described in Section
5.7.
BUSINESS DAY: Any day other than a Saturday, a Sunday, or a day on which
banking institutions in Chicago, Illinois or New York, New York, are authorized
or obligated by law or executive order to be closed.
CERTIFICATE: Any one of the Certificates issued pursuant to this
Agreement, executed by the Trustee and authenticated by or on behalf of the
Trustee hereunder in substantially one of the forms set forth in Exhibits A and
B hereto. The additional matter appearing in Exhibit K shall be deemed
incorporated into Exhibits A and B as though set forth at the end of Exhibit A
and at the end of Exhibit B, as applicable.
CERTIFICATE ACCOUNT: The separate trust account created and maintained
with the Trustee or any other bank or trust company acceptable to each Rating
Agency which is incorporated or organized under the laws of the United States or
any state thereof, which account shall bear a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of the
Trustee on behalf of the Certificateholders or any other account serving a
similar function acceptable to each Rating Agency. Funds in the Certificate
Account in respect of the Group I Loans and Group II Loans and amounts withdrawn
from the Certificate Account attributable to each of such Loan Groups shall be
accounted for separately. If the Trustee has appointed a Certificate
Administrator pursuant to Section 4.10, funds on deposit in the Certificate
Account may be invested in Eligible Investments and reinvestment earnings
thereon shall be paid to the Certificate Administrator as additional
compensation for the Certificate Administrator's performance of the duties
delegated to it by the Trustee. Funds deposited in the Certificate Account
(exclusive of the Servicing Fee) shall
9
be held in trust for the Certificateholders and for the uses and purposes set
forth in Section 3.2, Section 3.3 and Section 4.1.
CERTIFICATE ADMINISTRATOR: As defined in Section 4.10.
CERTIFICATE ADMINISTRATOR AND TRUSTEE FEE: For each Loan, a fee per
annum equal to 0.0100%, of the outstanding Principal Balance thereof which shall
be paid by the Servicer to the Certificate Administrator and the Trustee.
CERTIFICATE DISTRIBUTION AMOUNT: (I) For any Distribution Date prior to
the Credit Support Depletion Date, the applicable Available Distribution Amount
for the related Group I or Group II Loans shall be distributed to the related
Certificates in the following amounts and priority:
(A) with respect to the Class IA Certificates, the Subordinate
Certificates, to the extent of the Group I Available Distribution
Amount on such Distribution Date:
(i) first, the Group I Discount Fractional Principal Amount, if
any, to the Class IA-3 Certificates;
(ii) second, to the Class IA Certificates so entitled,
concurrently, the sum of the applicable Interest
Distribution Amounts for such Classes of Certificates
remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(iii) third, to the Class IA Certificates then entitled to
interest distributions, concurrently, the sum of the
applicable Interest Distribution Amounts for such Classes of
Certificates for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts;
(iv) fourth, (A) on or prior to the Distribution Date in March
2007, to the Class IA-1 and Class IA-2 Certificates, the
Group I Senior Principal Amount in the following order of
priority:
(a) first, to the Class IA-1 Certificates, to the extent
necessary to reduce its Class Principal Balance to its
Planned Principal Balance set forth in Exhibit M
attached hereto;
(b) second, to the Class IA-2 Certificates, until its Class
Principal Balance has been reduced to zero; and
(c) third, to the Class IA-1 Certificates, without regard
to its Planned Principal Balance, until its Class
Principal Balance has been reduced to zero;
10
(B) after the Distribution Date in March 2007, the Group I
Senior Principal Amount to the Class IA Certificates (other
than the Class IA-4 Certificates), pro rata, according to
their outstanding Class Principal Balances, until their
respective Class Principal Balances have been reduced to
zero;
(v) fifth, to the Class IA-3 Certificates, up to the Group I
Subordinate Principal Amount (determined without regard to
the proviso of such definition) for such Distribution Date,
the Group I Discount Fractional Principal Shortfall amount
payable to the Class IA-3 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;
(vi) sixth, to the Class IA-3 Certificates, up to the Group I
Subordinate Principal Amount (determined without regard to
the proviso of such definition) for such Distribution Date
(less any amounts distributed to the Class IA-3 Certificates
pursuant to clause (I)(A)(v)), the Group I Discount
Fractional Principal Shortfall; provided that any amounts
distributed in respect of the Group I Discount Fractional
Principal Shortfall pursuant to clause (I)(A)(v) or this
clause (I)(A)(vi) of this definition of "Certificate
Distribution Amount" shall not cause a further reduction of
the Class IA-3 Class Principal Balance; and
(vii) seventh, to the Class IIA Certificates, any amounts
distributable in respect of the Group II Undercollateralized
Amount;
(B) with respect to the Senior Certificates, the Class R Certificate
and the Subordinate Certificates, on any Distribution Date prior
to the Credit Support Depletion Date, to the extent of the Group
I 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:
(a) their respective amounts of previously unpaid and then
current Interest Distribution Amounts;
(b) their pro rata share, according to their respective
Class Principal Balances, of the applicable Subordinate
Principal Amount allocable pursuant to the definition
of "Subordinate Principal Amount" herein, until their
Class Principal Balances have been reduced to zero;
(ii) second, to the Class IA Certificates and 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
11
Class Principal Balances of the Class IA Certificates or the
Subordinate Certificates; and
(iii) third, to the Class R Certificate, the Group I Residual
Distribution Amount;
(C) with respect to the Class IIA Certificates, Subordinate
Certificates and Class R Certificate to the extent of the Group
II Available Distribution Amount on such Distribution Date:
(i) first, the Group II Discount Fractional Principal Amount, if
any, to the Class IIA-4 Certificates;
(ii) second, to the Class IIA Certificates and Class R
Certificate so entitled, concurrently, the sum of the
Interest Distribution Amounts for such Classes of
Certificates remaining unpaid from previous Distribution
Dates, pro rata according to their respective shares of such
unpaid amounts;
(iii) third, to the Class IIA Certificates and Class R
Certificate then entitled to interest distributions,
concurrently, the sum of the Interest Distribution Amounts
for such Classes of Certificates for the current
Distribution Date, pro rata according to their respective
Interest Distribution Amounts;
(iv) fourth, (A) on or prior to the Distribution Date in March
2005, the Group II Senior Principal Amount to the Class IIA
Certificates (other than the Class IIA-4 and Class IIA-5
Certificates) and Class R Certificate then entitled to
principal, in the following order of priority:
(a) first, to the Class R Certificate, until their Class
Principal Balance has been reduced to zero;
(b) second, to the Class IIA-1 Certificates and Class IIA-2
Certificates, pro rata, according to their outstanding
Class Principal Balances, until their respective Class
Principal Balances have been reduced to zero;
(c) third, to the Class IIA-3 Certificates, until its Class
Principal Balance has been reduced to zero;
(B) after the Distribution Date in March 2005, the Group II
Senior Principal Amount to the Class IIA Certificates (other
than the Class IIA-5 Certificates) and Class R Certificate
then entitled to principal, concurrently on a pro rata basis
based on the respective aggregate outstanding Class
Principal Balance of such Classes of Certificates in clauses
(a) and (b) below, as follows:
(a) to the Class IIA-1, Class IIA-2 and Class IIA-3
Certificates and Class R Certificate, in the following
order of priority:
12
(i) first, to the Class R Certificate, until its
Class Principal Balance has been reduced to
zero;
(ii) second, to the Class IIA-1 Certificates and
Class IIA-2 Certificates, pro rata, according
to their outstanding Class Principal Balances,
until their respective Class Principal
Balances have been reduced to zero; and
(iii) third, to the Class IIA-3 Certificates, until
its Class Principal Balance has been reduced
to zero; and
(b) to the Class IIA-4 Certificates, until its Class
Principal Balance has been reduced to zero; and
(v) fifth, to the Class IIA-4 Certificates, up to the Group II
Subordinate Principal Amount (determined without regard to
the proviso of such definition) for such Distribution Date,
the Group II Discount Fractional Principal Shortfall amount
payable to the Class IIA-4 Certificates on previous
Distribution Dates pursuant to clause (I)(C)(vi) of this
definition of "Certificate Distribution Amount" and
remaining unpaid from such previous Distribution Dates; and
(vi) sixth, to the Class IIA-4 Certificates, up to the Group II
Subordinate Principal Amount (determined without regard to
the proviso of such definition) for such Distribution Date
(less any amounts distributed to the Class IIA-4
Certificates pursuant to clause (I)(C)(v)), the Group II
Discount Fractional Principal Shortfall; provided that any
amounts distributed in respect of the Group II Discount
Fractional Principal Shortfall pursuant to paragraph
(I)(C)(v) or this paragraph (I)(C)(vi) of this definition of
"Certificate Distribution Amount" shall not cause a further
reduction of the Class IIA-4 Class Principal Balance; and
(vii) seventh, to the Class IA Certificates and Class R
Certificate, any amounts distributable in respect of the
Group I Undercollateralized Amount;
(D) with respect to the Senior Certificates, the Class R Certificate
and the Subordinate Certificates, on any Distribution Date prior
to the Credit Support Depletion Date, to the extent of the Group
II 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:
(a) their respective amounts of previously unpaid and then
current Interest Distribution Amounts;
13
(b) their pro rata share, according to their respective
Class Principal Balances, of the applicable Subordinate
Principal Amount allocable pursuant to the definition
of "Subordinate Principal Amount" herein, until their
Class Principal Balances have been reduced to zero;
(ii) second, to the Class IIA Certificates and 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)(D)(ii) of
this definition of "Certificate Distribution Amount" shall
not cause a further reduction in the Class Principal
Balances of the Class IIA Certificates or Subordinate
Certificates; and
(iii) third, to the Class R Certificate, of the Group II Residual
Distribution Amount;
(II) For any Distribution Date on or after the Credit Support Depletion
Date, the applicable Available Distribution Amount for the related Group I or
Group II Loans shall be distributed to the applicable Certificates in the
following order of priority:
(A) with respect to the Class IA Certificates, to the extent of the
Group I Available Distribution Amount on such Distribution Date:
(i) first, the Group I Discount Fractional Principal Amount, if
any, to the Class IA-3 Certificates;
(ii) second, to the Class IA Certificates, previously unpaid and
then current Interest Distribution Amounts, pro rata,
according to such amount payable to the extent of amounts
available;
(iii) third, to each Class of Class IA Certificates (other than
the Class IA-4 Certificates, and on any Distribution Date on
or prior March 2007, the Class IA-3 Certificates), the Group
I Senior Principal Amount, pro rata, according to their
respective Class Principal Balances;
(iii) fourth, to each Class of Class IA Certificates (other than
the Class IA-4 Certificates), pro rata, according to their
respective Class Principal Balances, the amount of
unreimbursed Realized Losses previously allocated to such
Class; and
(iv) fifth, to the Class R Certificate, the remainder, if any, of
the Group I Available Distribution Amount for such
Distribution Date.
(B) with respect to the Class IIA Certificates and Class R
Certificate, to the extent of the Group II Available Distribution
Amount on such Distribution Date:
14
(i) first, the Group II Discount Fractional Principal Amount, if
any, to the Class IIA-4 Certificates;
(ii) second, to the Class IIA Certificates and Class R
Certificate so entitled, previously unpaid and then current
Interest Distribution Amounts to the extent of amounts
available;
(ii) third, to each Class of Class IIA Certificates (other than
the Class IIA-5 Certificates, and on any Distribution Date
on or prior to March 2005, the Class IIA-4 Certificates) and
Class R Certificate, the Group II Senior Principal Amount,
pro rata, according to their respective Class Principal
Balances;
(iii) fourth, to each Class of Class IIA Certificates (other than
the Class IIA-5 Certificates) and Class R Certificate, pro
rata, according to their respective Class Principal
Balances, the amount of unreimbursed Realized Losses
previously allocated to such Class; and
(iv) fifth, to the Class R Certificate, the remainder, if any, of
the Group II Available Distribution Amount for such
Distribution Date.
CERTIFICATE GROUP: The Class IA Certificates or Class IIA
Certificates and Class R Certificate, as applicable.
CERTIFICATE PRINCIPAL BALANCE: For each Certificate of any Class, the
portion of the related Class Principal Balance, if any, represented by such
Certificate.
CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register maintained
and the registrar appointed, respectively, pursuant to Section 5.3. Initially,
the Certificate Registrar shall be LaSalle Bank National Association.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor, the Certificate Administrator, the Servicer or any
Affiliate thereof shall be deemed not to be outstanding and the Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Percentage Interests necessary to effect any
such consent has been obtained; PROVIDED, that the Trustee, the Certificate
Registrar and the Paying Agent may conclusively rely upon an Officer's
Certificate to determine whether any Person is an Affiliate of the Depositor,
the Certificate Administrator or the Servicer.
CERTIFICATEHOLDERS' REPORT: As defined in Section 4.2(a).
15
CLASS: All Certificates having the same priority and rights to payments
from the applicable Available Distribution Amount, designated as a separate
Class, as set forth in the forms of Certificates attached hereto as Exhibits A
and B.
CLASS A CERTIFICATES: The Class IA Certificates and Class IIA
Certificates, collectively.
CLASS IA CERTIFICATES: The Class IA-1, Class IA-2, Class IA-3 and Class
IA-4 Certificates, collectively, and designated as such on the face thereof in
substantially the forms attached hereto as Exhibits A-1 through A-4,
respectively.
CLASS IA-1 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2007 is 5.85% per
annum, subject to a maximum rate equal to the Adjusted Net WAC for Loan Group I
for the related Distribution Date. Thereafter, the Class IA-1 Interest Rate will
be equal to the Net WAC for Loan Group I for the related Distribution Date.
CLASS IA-2 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2007 is 5.85% per
annum, subject to a maximum rate equal to the Adjusted Net WAC for Loan Group I
for the related Distribution Date. Thereafter, the Class IA-2 Interest Rate will
be equal to the Net WAC for Loan Group I for the related Distribution Date.
CLASS IA-3 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2007 is 0.00% per
annum. Thereafter, the Class IA-3 Interest Rate will be equal to the Net WAC for
Loan Group I for the related Distribution Date.
CLASS IA-4 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2007 is 5.85% per
annum. Thereafter, the Class IA-4 Certificates will not accrue interest and will
not be entitled to any distributions related to subsequent Interest Accrual
Periods.
CLASS IA-4 NOTIONAL AMOUNT: As of the Closing Date, $7,530,413, and
thereafter, with respect to any Distribution Date on or prior to the
Distribution Date in March 2007, shall equal (i)(a) the total Principal Balance,
as of the first day of the month preceding such Distribution Date (after giving
effect to all payments scheduled to be made on such day whether or not
received), of the Group I Loans (b) minus the Class Principal Balance of the
Class IA-3 Certificates, multiplied by (ii) the following fraction:
the excess, if any, of (i) Adjusted Net WAC for Loan
Group I as of the first day of such month over (ii) 5.85%
--------------------------
5.85%
On any Distribution Date after the Distribution Date in March 2007, the Class
IA-4 Notional Amount shall be $0.
16
CLASS IIA CERTIFICATES: The Class IIA-1, Class IIA-2, Class IIA-3, Class
IIA-4 and Class IIA-5 Certificates, collectively, and designated as such on the
face thereof in substantially the forms attached hereto as Exhibits A-5 through
A-9, respectively.
CLASS IIA-1 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2005 is 5.85% per
annum, subject to a maximum rate equal to the Adjusted Net WAC for Loan Group II
for the related Distribution Date plus 0.50% per annum. Thereafter, the Class
IIA-1 Interest Rate will be equal to the Net WAC for Loan Group II for the
related Distribution Date.
CLASS IIA-2 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2005 is 4.25% per
annum, subject to a maximum rate equal to the Adjusted Net WAC for Loan Group II
for the related Distribution Date minus 1.10% per annum. Thereafter, the Class
IIA-2 Interest Rate will be equal to the Net WAC for Loan Group II for the
related Distribution Date.
CLASS IIA-3 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2005 is 5.35% per
annum, subject to a maximum rate equal to the Adjusted Net WAC for Loan Group II
for the related Distribution Date. Thereafter, the Class IIA-3 Interest Rate
will be equal to the Net WAC for Loan Group II for the related Distribution
Date.
CLASS IIA-4 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2005 is 0.00% per
annum. Thereafter, the Class IIA-4 Interest Rate will be equal to the Net WAC
for Loan Group II for the related Distribution Date.
CLASS IIA-5 INTEREST RATE: With respect to each Interest Accrual Period
up to and including the Interest Accrual Period in February 2005 is 5.35% per
annum. Thereafter, the Class IIA-5 Certificates will not accrue interest and
will not be entitled to any distributions related to subsequent Interest Accrual
Periods.
CLASS IIA-5 NOTIONAL AMOUNT: As of the Closing Date, $8,457,890, and
thereafter, with respect to any Distribution Date on or prior to the
Distribution Date in March 2005, shall equal (i)(a) the total Principal Balance,
as of the first day of the month preceding such Distribution Date (after giving
effect to all payments scheduled to be made on such day whether or not
received), of the Group II Loans, minus (b) the Class Principal Balance of the
Class IIA-4 Certificates, multiplied by (ii) the following fraction:
the excess, if any, of (i) Adjusted Net WAC for LOAN
GROUP II AS OF THE FIRST DAY OF SUCH MONTH OVER (II) 5.35%
5.35%.
On any Distribution Date after the Distribution Date in March 2005, the Class
IIA-5 Notional Amount shall be $0.
17
CLASS NOTIONAL AMOUNT: With respect to the Class IA-4 and Class IIA-5
Certificates, the Class IA-4 Notional Amount and Class IIA-5 Notional Amount,
respectively.
CLASS PRINCIPAL BALANCE: For any Class of Certificates (other than the
Interest Only Certificates), the applicable initial Class Principal Balance set
forth in the Preliminary Statement hereto, corresponding to the rights of such
Class in payments of principal due to be passed through to Certificateholders
from principal payments on the Loans, as reduced from time to time by (x)
distributions of principal to Certificateholders of such Class and (y) the
portion of Realized Losses allocated to the Class Principal Balance of such
Class pursuant to Section 3.20 with respect to a given Distribution Date. For
any Distribution Date, the reduction of the Class Principal Balance of any Class
of Certificates pursuant to Section 3.20 shall be deemed effective prior to the
determination and distribution of principal on such Class pursuant to the
definition of "Certificate Distribution Amount". Notwithstanding the foregoing,
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 IA-1
Certificates shall be referred to as the "Class IA-1 Principal Balance", the
Class Principal Balance for the Class IA-2 Certificates shall be referred to as
the "Class IA-2 Principal Balance" and so on. The Class Principal Balance of the
Interest Only Certificates shall be zero.
CLASS R CERTIFICATE: The Certificate designated as "Class R" on the face
thereof in substantially the form attached hereto as Exhibit B, that is composed
of Components X-0, X-0, X-0 and R-4, each of which has been designated as the
sole class of "residual interests" in REMIC I, REMIC II, REMIC III and REMIC IV,
respectively, pursuant to Section 2.1
CLASS R CERTIFICATEHOLDER: The registered Holder of the Class R
Certificate.
CLASS R INTEREST RATE: With respect to any Interest Accrual Period is
equal to the Net WAC for Loan Group II for the related Distribution Date.
CLEARING AGENCY: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
which initially shall be DTC, Clearstream, Luxembourg and Euroclear.
CLEARSTREAM, LUXEMBOURG: Clearstream Banking, a societe anonyme, a
limited liability company organized under the laws of Luxembourg.
CLOSING DATE: May 23, 2002.
CODE: The Internal Revenue Code of 1986, as amended.
COMPENSATING INTEREST: For any Distribution Date, with respect to the
Group I or Group II Loans, as determined separately for each Loan Group,
contained therein, the lesser of (i) the sum of (a) one-twelfth of 0.1875% of
the aggregate outstanding Principal Balance of each Group I or Group II Loan, as
applicable, on such Distribution Date, (b) the aggregate Payoff Earnings with
respect to
18
the applicable Loan Group, and (c) the aggregate Payoff Interest with respect to
the applicable Loan Group, and (ii) the aggregate Uncollected Interest with
respect to the applicable Loan Group.
COMPONENT R-1: The residual interest in REMIC I.
COMPONENT R-2: The residual interest in REMIC II.
COMPONENT R-3: The residual interest in REMIC III.
COMPONENT R-4: The residual interest in REMIC IV.
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, 0xx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Xxxxx Xxxxxxx.
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, or at the direction of, the Servicer and
caused by the Servicer to be established and maintained pursuant to Section
3.2(b) (i) with the corporate trust department of the Trustee or another
financial institution approved by the Servicer such that the rights of such
Servicer, the Trustee and the Certificateholders thereto shall be fully
protected against the claims of any creditors of the Servicer and of any
creditors or depositors of the institution in which such account is maintained,
(ii) within FDIC insured accounts (or other accounts with comparable insurance
coverage acceptable to each Rating Agency) created and maintained, by or at the
direction of the Servicer, and monitored by the Servicer or (iii) in a separate
non-trust account without FDIC or other insurance in an Eligible Institution. In
the event that a Custodial Account for P&I is established pursuant to clause
(ii) of the preceding sentence, amounts held in such Custodial Account for P&I
shall not exceed the level of deposit insurance coverage on such account;
accordingly, more than one Custodial Account for P&I may be established.
CUSTODIAL AGREEMENT: The agreement, if any, among the Servicer, the
Trustee and a Custodian providing for the safekeeping of the Mortgage Files on
behalf of the Certificateholders.
19
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: May 1, 2002.
DATA: As defined in Section 8.14.
DEFAULTED LOAN: As of any Determination Date, any Loan for which any
payment of principal of or interest on such Loan is more than 89 days past due,
determined without giving effect to any grace period permitted by the related
Mortgage or Mortgage Note or any other document in the Mortgage File.
DEFINITIVE CERTIFICATES: As defined in Section 5.7.
DENOMINATION: The amount specified on a Certificate as representing the
aggregate Principal Balance of the Loans as of the Cut-Off Date evidenced by
such Certificate.
DEPOSITOR: ABN AMRO Mortgage Corporation, a Delaware corporation, or its
successor-in- interest.
DEPOSITORY: DTC or any successor thereto.
DEPOSITORY AGREEMENT: The Letter of Representations, dated May 23, 2002
by and among DTC, the Depositor and the Trustee.
DETERMINATION DATE: A day not later than the 10th day (or, if such 10th
day is not a Business Day, the Business Day immediately succeeding such 10th
day) preceding a related Distribution Date in the month in which such
Distribution Date occurs.
DISCOUNT LOAN: A Group I Discount Loan or Group II Discount Loan, as
applicable.
DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code, and, for purposes of Section 5.1 herein, as
defined in Section 5.1(b).
DISTRIBUTION DATE: With respect to distributions on the Certificates,
the 25th day (or, if such 25th day is not a Business Day, the Business Day
immediately succeeding such 25th day) of each month, with the first such date
being June 25, 2002. The "related Due Date" for any Distribution Date is the Due
Date immediately preceding such Distribution Date.
DTC: The Depository Trust Company.
20
DTC PARTICIPANT: A broker, dealer, bank, other financial institution or
other Person for whom DTC effects book-entry transfers and pledges of securities
deposited with DTC.
DUE DATE: The first day of each calendar month, which is the day on
which the Monthly Payment for each Loan is due.
ELIGIBLE ACCOUNT: Any account or accounts held and established by the
Servicer or the Trustee in trust for the Certificateholders at any Eligible
Institution.
ELIGIBLE INSTITUTION: An institution having (i) the highest short-term
debt rating, and one of the two highest long-term debt ratings of each Rating
Agency, (ii) with respect to any Custodial Account for P&I, an unsecured
long-term debt rating of at least one of the two highest unsecured long-term
debt ratings of each Rating Agency, or (iii) the approval of each Rating Agency.
ELIGIBLE INVESTMENTS: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date, regardless of whether
issued by the Depositor, the Servicer, the Trustee or any of their respective
Affiliates and having at the time of purchase, or at such other time as may be
specified, the required ratings, if any, provided for in this definition:
(a) direct obligations of, or guaranteed as to full and timely
payment of principal and interest by, the United States or any agency or
instrumentality thereof, PROVIDED, that such obligations are backed by
the full faith and credit of the United States of America;
(b) direct obligations of, or guaranteed as to timely payment of
principal and interest by, FHLMC, FNMA or the Federal Farm Credit
System, PROVIDED, that any such obligation, at the time of purchase or
contractual commitment providing for the purchase thereof, is qualified
by each Rating Agency as an investment of funds backing securities rated
"Aaa" in the case of Xxxxx'x and "AAA" in the case of S&P (the initial
rating of the Class A Certificates);
(c) demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and
loan association or savings 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
21
available for such securities by each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the rating
or ratings then assigned to any Class of Certificates by any Rating
Agency;
(e) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than one
year after the date of issuance thereof) that is rated by each Rating
Agency in its highest short-term unsecured rating category at the time
of such investment or contractual commitment providing for such
investment, and is issued by a corporation the outstanding senior
long-term debt obligations of which are then rated by each Rating Agency
in one of its two highest long-term unsecured rating categories, or such
lower rating as will not result in the downgrading or withdrawal of the
rating or ratings then assigned to any Class of Certificates by any
Rating Agency but in no event less than the initial rating of the Senior
Certificates;
(f) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in one of the two highest
rating levels available to such issuers by each Rating Agency at the
time of such investment, PROVIDED, that any such agreement must by its
terms provide that it is terminable by the purchaser without penalty in
the event any such rating is at any time lower than such level;
(g) repurchase obligations with respect to any security described
in clause (a) or (b) above entered into with a depository institution or
trust company (acting as principal) meeting the rating standards
described in (c) above;
(h) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any State thereof and rated by each Rating Agency
in one of its two highest long-term unsecured rating categories at the
time of such investment or contractual commitment providing for such
investment; PROVIDED, HOWEVER, that securities issued by any such
corporation will not be Eligible Investments to the extent that
investment therein would cause the outstanding principal amount of
securities issued by such corporation that are then held as 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
22
(k) such other obligations as are acceptable as Eligible
Investments to each Rating Agency;
PROVIDED, HOWEVER, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ESCROW ACCOUNT: As defined in Section 3.4.
ESCROW PAYMENT: Any payment received by the Servicer for the account of
any Mortgagor for application toward the payment of taxes, insurance premiums,
assessments and similar items in respect of the related Mortgaged Property.
EUROCLEAR: Euroclear Clearance System, Societe Cooperative, a Belgium
cooperative cooperation.
EUROCLEAR OPERATOR: Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
EVENT OF DEFAULT: Any event of default as specified in Section 7.1.
EXCESS LIQUIDATION PROCEEDS: With respect to any Distribution Date, the
excess, if any, of aggregate Liquidation Proceeds in the applicable Prepayment
Period over the amount that would have been received if a Payoff had been made
on the last day of such applicable Prepayment Period with respect to each Loan
which became a Liquidated Loan during such applicable Prepayment Period.
EXCESS LOSS: A Special Hazard Loss incurred on a Loan in excess of the
Special Hazard Coverage, a Fraud Loss incurred on a Loan in excess of the Fraud
Coverage and a Bankruptcy Loss incurred on a Loan in excess of the Bankruptcy
Coverage.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
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.
23
FHA: Federal Housing Administration, or any successor thereto.
FHLMC: Xxxxxxx Mac, or any successor thereto.
FNMA: Xxxxxx Xxx, or any successor thereto.
FRAUD COVERAGE: As of the Cut-Off Date approximately $5,310,642 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. The Fraud Coverage may be reduced
upon written confirmation from each Rating Agency that such reduction will not
adversely affect the then current ratings assigned to the Certificates by each
Rating Agency.
FRAUD LOSS: The occurrence of a loss on a Loan arising from any action,
event or state of facts with respect to such Loan which, because it involved or
arose out of any dishonest, fraudulent, criminal, negligent or knowingly
wrongful act, error or omission by the Mortgagor, originator (or assignee
thereof) of such Loan, Lender, or the Servicer, would result in an exclusion
from, denial of, or defense to coverage which otherwise would be provided by an
insurance policy previously issued with respect to such Loan.
GLOBAL CERTIFICATES: Collectively, the Regulation S Global Certificates
and the Rule 144A Global Certificates.
GROUP OF LOANS: means the Group I Loans or the Group II Loans, as the
context requires.
GROUP I DISCOUNT FRACTION: For any Distribution Date occurring on or
prior to the Distribution Date in March 2007 and any Group I Discount Loan, the
following fraction:
5.85% minus the Pass-Through Rate on such
Group I Discount Loan as of the Cut-Off Date
------------------------------
5.85%.
The Group I Discount Fraction for any Distribution Date occurring after the
Distribution Date in March 2007 shall be 0.00%.
GROUP I DISCOUNT FRACTIONAL PRINCIPAL AMOUNT: With respect to the Class
IA-3 Certificates and any Distribution Date occurring on or prior to the
Distribution Date in March 2007, an amount equal to the product of the Group I
Discount Fraction multiplied by the sum of (i) scheduled
24
payments of principal on each Group I 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 Group I Discount Loan
during the Prepayment Period of (a) Curtailments, (b) Insurance Proceeds, (c)
the amount, if any, of the principal portion of the Purchase Price pursuant to a
Purchase Obligation or any repurchase of a Group I Discount Loan permitted
hereunder and (d) Liquidation Proceeds and (iii) the principal portion of
Payoffs received in respect of Group I Discount Loans during the applicable
Prepayment Period. With respect to any Distribution Date occurring after the
Distribution Date in March 2007, the Group I Discount Fractional Principal
Amount for the Class IA-3 Certificates shall be equal to zero.
GROUP I DISCOUNT FRACTIONAL PRINCIPAL SHORTFALL: For any Distribution
Date, an amount equal to the Group I Discount Fraction of any Realized Loss on a
Group I Discount Loan recognized prior to the Distribution Date in March 2007,
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.
GROUP I DISCOUNT LOAN: Any Group I Loan having a Pass-Through Rate as of
the Cut-Off Date of less than 5.85%.
GROUP I LOAN: The Loans designated on the Loan Schedule as Group I
Loans.
GROUP I SENIOR LIQUIDATION AMOUNT: The aggregate, for each Group I Loan
which became a Liquidated Loan during the applicable Prepayment Period, of the
lesser of: (i) the Group I Senior Percentage of the Principal Balance of such
Group I Loan (exclusive of the Group I Discount Fraction, if applicable), and
(ii) the Group I Senior Prepayment Percentage of the Liquidation Principal with
respect to such Group I Loan.
GROUP I SENIOR PERCENTAGE: As of the Closing Date, approximately 96.82%,
and thereafter, with respect to any Distribution Date, the sum of the Class
Principal Balances of the Class IA Certificates (other than the Class IA-3
Certificates, on or prior to the Distribution Date in March 2007) divided by the
aggregate Scheduled Principal Balance of all of the Group I Loans, in each case
immediately prior to such Distribution Date (exclusive of the Group I Discount
Fraction of the Group I Discount Loans on or prior to the Distribution Date in
March 2007).
GROUP I SENIOR PREPAYMENT PERCENTAGE: (i) On any Distribution Date where
the Group I Senior Enhancement Percentage for such Distribution Date is less
than the initial Group I Senior Enhancement Percentage, then both of the Group I
and Group II Senior Prepayment Percentage for such Distribution Date shall equal
100%; (ii) on any Distribution Date before the Distribution Date in June 2005
where, prior to giving effect to any distributions on such Distribution Date,
the Group I Senior Enhancement Percentage for such Distribution Date is greater
than or equal to twice the initial Group I Senior Enhancement Percentage, then
the Group I Senior Prepayment Percentage for such Distribution Date will equal
the Group I Senior Percentage plus 50% of the Group I Subordinate Percentage;
(iii) on any Distribution Date on or after the Distribution Date in June 2005
25
where, prior to giving effect to any distributions on such Distribution Date,
the Group I Senior Enhancement Percentage for such Distribution Date is greater
than or equal to twice the initial Group I Senior Enhancement Percentage, then
the Group I Senior Prepayment Percentage for such Distribution Date will equal
the Group I Senior Percentage; and (iv) on any other Distribution Date in the
month of June 2007 and thereafter, 100%, unless:
(a) the mean aggregate Principal Balance of the Group I 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 Group I
Subordinate Amount as of such Distribution Date, and
(b) cumulative Realized Losses on the Group I Loans allocated to
the Subordinate Certificates are less than or equal to the following
amounts:
PERCENTAGE OF THE GROUP I SUBORDINATE
DISTRIBUTION DATE OCCURRING IN AMOUNT AS OF THE CUT-OFF DATE
------------------------------ -----------------------------
June 2002 through May 2005.......... 20%
June 2005 through May 2008.......... 30%
June 2008 through May 2009.......... 35%
June 2009 through May 2010.......... 40%
June 2010 through May 2011.......... 45%
June 2011 and thereafter............ 50%
(c) the occurrence of both of the events described in clauses
(iv)(a) and (b) of the definition of "Group I Senior Prepayment
Percentage",
in which case, the Group I Senior Prepayment Percentage shall be as
follows:
DISTRIBUTION DATE OCCURRING IN SENIOR PREPAYMENT PERCENTAGE
------------------------------ ----------------------------
June 2002 through May 2007........................... 100%
June 2007 through May 2008........................... GROUP I SENIOR PERCENTAGE + 70% of GROUP I SUBORDINATE PERCENTAGE
June 2008 through May 2009........................... GROUP I SENIOR PERCENTAGE + 60% of GROUP I SUBORDINATE PERCENTAGE
June 2009 through May 2010........................... GROUP I SENIOR PERCENTAGE + 40% of GROUP I SUBORDINATE PERCENTAGE
June 2010 through May 2011........................... GROUP I SENIOR PERCENTAGE + 20% of GROUP I SUBORDINATE PERCENTAGE
June 2011 and thereafter............................. GROUP I SENIOR PERCENTAGE
If on any Distribution Date the allocation to the Class IA Certificates
of Principal Prepayments in the percentage required would reduce the sum of the
Class Principal Balances of the Class IA Certificates and the Subordinate
Certificates below zero, the Group I Senior Prepayment Percentage for such
Distribution Date shall be limited to the percentage necessary to reduce such
sum to zero.
GROUP I SENIOR PRINCIPAL AMOUNT: For any Distribution Date, an amount
equal to the sum of (a) the Group I Senior Percentage of the Principal Payment
Amount for the Group I Loans (exclusive of the Group I Discount Fractional
Principal Amount), (b) the Group I Senior Prepayment
26
Percentage of the Principal Prepayment Amount for the Group I Loans (exclusive
of the Group I Discount Fractional Principal Amount) and (c) the Group I Senior
Liquidation Amount.
GROUP I SUBORDINATE AMOUNT: The excess of the aggregate Scheduled
Principal Balance of the Group I Loans minus the sum of the Certificate
Principal Balances of the Class IA Certificates.
GROUP I SUBORDINATE PERCENTAGE: As of the Closing Date, approximately
3.18%, and thereafter, with respect to any Distribution Date, the excess of 100%
over the applicable Senior Percentage for such date.
GROUP I UNDERCOLLATERALIZED AMOUNT: For any Distribution Date is equal
to the sum of (i) the sum of (A) the amount, if any, by which the aggregate
Certificate Principal Balance of the Class IA Certificates exceeds the aggregate
Scheduled Principal Balance of the Group I Loans, after giving effect to
distributions to be made on such Distribution Date and (B) 1/12 of the amount
calculated in clause (i)(A) above multiplied by the Adjustable Net WAC of the
Group I Loans, and (ii) any amounts payable to the Class IA Certificates
pursuant to clause (i) above of this definition of "Group I Undercollateralized
Amount" on any prior Distribution Dates, plus accrued interest thereon at the
Adjusted Net WAC of the Group I Loans per annum.
GROUP II DISCOUNT FRACTION: For any Distribution Date occurring on or
prior to the Distribution Date in March 2005 and any Group II Discount Loan, the
following fraction:
5.35% minus the Pass-Through Rate on such
Group II Discount Loan as of the Cut-Off Date
------------------------------
5.35%.
The Group II Discount Fraction for any Distribution Date occurring after the
Distribution Date in March 2005 shall be 0.00%.
GROUP II DISCOUNT FRACTIONAL PRINCIPAL AMOUNT: With respect to the Class
IIA-4 Certificates and any Distribution Date occurring on or prior to the
Distribution Date in March 2005, an amount equal to the product of the Group II
Discount Fraction multiplied by the sum of (i) scheduled payments of principal
on each Group II 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 Group II Discount Loan during the Prepayment
Period of (a) Curtailments, (b) Insurance Proceeds, (c) the amount, if any, of
the principal portion of the Purchase Price pursuant to a Purchase Obligation or
any repurchase of a Group II Discount Loan permitted hereunder and (d)
Liquidation Proceeds and (iii) the principal portion of Payoffs received in
respect of Group II Discount Loans during the applicable Prepayment Period. With
respect to any Distribution Date occurring after the Distribution Date in March
2005, the Group II Discount Fractional Principal Amount for the Class IIA-4
Certificates shall be equal to zero.
27
GROUP II DISCOUNT FRACTIONAL PRINCIPAL SHORTFALL: For any Distribution
Date, an amount equal to the Group II Discount Fraction of any Realized Loss on
a Group II Discount Loan recognized prior to the Distribution Date in March
2005, 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.
GROUP II DISCOUNT LOAN: Any Group II Loan having a Pass-Through Rate as
of the Cut-Off Date of less than 5.35%.
GROUP II LOAN: The Loans designated on the Loan Schedule as Group II
Loans.
GROUP II SENIOR LIQUIDATION AMOUNT: The aggregate, for each Group II
Loan which became a Liquidated Loan during the applicable Prepayment Period, of
the lesser of: (i) the Group II Senior Percentage of the Principal Balance of
such Group II Loan (exclusive of the Group II Discount Fraction, if applicable),
and (ii) the Group II Senior Prepayment Percentage of the Liquidation Principal
with respect to such Group II Loan.
GROUP II SENIOR PERCENTAGE: As of the Closing Date, approximately
96.80%, and thereafter, with respect to any Distribution Date, the sum of the
Class Principal Balances of the Class IIA Certificates (other than the Class
IIA-4 Certificates, on or prior to the Distribution Date in March 2005) and the
Class R Certificate divided by the aggregate Scheduled Principal Balance of all
of the Group II Loans, in each case immediately prior to such Distribution Date
(exclusive of the Group II Discount Fraction of the Group II Discount Loans, on
or prior to the Distribution Date in March 2005).
GROUP II SENIOR PREPAYMENT PERCENTAGE: (i) On any Distribution Date
where the Group II Senior Enhancement Percentage for such Distribution Date is
less than the initial Group II Senior Enhancement Percentage, then both of the
Group I and Group II Senior Prepayment Percentage for such Distribution Date
shall equal 100%; (ii) on any Distribution Date before the Distribution Date in
June 2005 where, prior to giving effect to any distributions on such
Distribution Date, the Group II Senior Enhancement Percentage for such
Distribution Date is greater than or equal to twice the initial Group II Senior
Enhancement Percentage, then the Group II Senior Prepayment Percentage for such
Distribution Date will equal the Group II Senior Percentage plus 50% of the
Group II Subordinate Percentage; (iii) on any Distribution Date on or after the
Distribution Date in June 2005 where, prior to giving effect to any
distributions on such Distribution Date, the Group II Senior Enhancement
Percentage for such Distribution Date is greater than or equal to twice the
initial Group II Senior Enhancement Percentage, then the Group II Senior
Prepayment Percentage for such Distribution Date will equal the Group II Senior
Percentage; and (iv) on any other Distribution Date in the month of June 2007
and thereafter, 100%, unless:
(a) the mean aggregate Principal Balance of the Group II 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 Group II
Subordinate Amount as of such Distribution Date, and
28
(b) cumulative Realized Losses on the Group II Loans allocated to
the Subordinate Certificates are less than or equal to the following
amounts:
PERCENTAGE OF THE GROUP II SUBORDINATE
DISTRIBUTION DATE OCCURRING IN AMOUNT AS OF THE CUT-OFF DATE
------------------------------ -----------------------------
June 2002 through May 2005.................................... 20%
June 2005 through May 2008.................................... 30%
June 2008 through May 2009.................................... 35%
June 2009 through May 2010.................................... 40%
June 2010 through May 2011.................................... 45%
June 2011 and thereafter...................................... 50%
(c) the occurrence of both of the events described in clauses
(iv)(a) and (b) of the definition of "Group II Senior Prepayment
Percentage",
in which case, the Group II Senior Prepayment Percentage shall be as
follows:
DISTRIBUTION DATE OCCURRING IN SENIOR PREPAYMENT PERCENTAGE
------------------------------ ----------------------------
June 2002 through May 2007........................... 100%
June 2007 through May 2008........................... GROUP II SENIOR PERCENTAGE + 70% of GROUP II SUBORDINATE
PERCENTAGE
June 2008 through May 2009........................... GROUP II SENIOR PERCENTAGE + 60% of GROUP II SUBORDINATE
PERCENTAGE
June 2009 through May 2010........................... GROUP II SENIOR PERCENTAGE + 40% of GROUP II SUBORDINATE
PERCENTAGE
June 2010 through May 2011........................... GROUP II SENIOR PERCENTAGE + 20% of GROUP II SUBORDINATE
PERCENTAGE
June 2011 and thereafter............................. GROUP II SENIOR PERCENTAGE
If on any Distribution Date the allocation to the Class IIA Certificates
and Class R Certificate of Principal Prepayments in the percentage required
would reduce the sum of the Class Principal Balances of the Class IIA
Certificates, Class R Certificate and the Subordinate Certificates below zero,
the Group II Senior Prepayment Percentage for such Distribution Date shall be
limited to the percentage necessary to reduce such sum to zero.
GROUP II SENIOR PRINCIPAL AMOUNT: For any Distribution Date, an amount
equal to the sum of (a) the Group II Senior Percentage of the Principal Payment
Amount for the Group II Loans (exclusive of the Group II Discount Fractional
Principal Amount), (b) the Group II Senior Prepayment Percentage of the
Principal Prepayment Amount for the Group II Loans (exclusive of the Group II
Discount Fractional Principal Amount), and (c) the Group II Senior Liquidation
Amount.
GROUP II SUBORDINATE AMOUNT: The excess of the aggregate Scheduled
Principal Balance of the Group II Loans minus the sum of Certificate Principal
Balances of the Class IIA Certificates and Class R Certificate.
GROUP II SUBORDINATE PERCENTAGE: As of the Closing Date, approximately
3.20%, and thereafter, with respect to any Distribution Date, the excess of 100%
over the applicable Senior Percentage for such date.
29
GROUP II UNDERCOLLATERALIZED AMOUNT: For any Distribution Date is equal
to the sum of (i) the sum of (A) the amount, if any, by which the aggregate
Certificate Principal Balance of the Class IIA Certificates and the Class R
Certificate exceeds the aggregate Scheduled Principal Balance of the Group II
Loans, after giving effect to distributions to be made on such Distribution Date
and (B) 1/12 of the amount calculated in clause (i)(A) above multiplied by the
Adjusted Net WAC of the Group II Loans, and (ii) any amounts payable to the
Class IIA Certificates and the Class R Certificate pursuant to clause (i) above
of this definition of "Group II Undercollateralized Amount" on any prior
Distribution Dates, plus accrued interest thereon at the Adjusted Net WAC of the
Group II Loans per annum.
INDEPENDENT: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor and the Servicer, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Depositor or the Servicer or any Affiliate of either and (iii)
is not connected with the Depositor or the Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
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.
INITIAL PURCHASER: Xxxxxx Brothers Inc.
INSTALLMENT DUE DATE: The first day of the month in which the related
Distribution Date occurs.
INSURANCE PROCEEDS: Amounts paid or payable by the insurer under any
insurance policy (including any replacement policy permitted under this
Agreement), covering any Loan or Mortgaged Property, including, without
limitation, any flood insurance policy, primary mortgage insurance policy or
hazard insurance policy required pursuant to Section 3.5, any title insurance
policy required pursuant to Section 2.3, and any FHA insurance policy or VA
guaranty.
INTEREST ACCRUAL PERIOD: For all Classes of Certificates, the calendar
month preceding the month in which the Distribution Date occurs.
INTEREST DISTRIBUTION AMOUNT: On any Distribution Date for any Class of
Certificates (other than the Class IA-3 Certificates on or prior to the
Distribution Date in March 2007 and the Class IIA- 4 Certificates on or prior to
the Distribution Date in March 2005), the amount of interest accrued on the
respective Class Principal Balance or Class Notional Amount, as applicable, at
1/12th of the related Remittance Rate for such Class during the applicable
Interest Accrual Period (computed on the basis of a 360-day year of twelve
30-day months), before giving effect to allocations of Realized Losses with
respect to the applicable Loan Group, for the applicable Prepayment Period or
distributions to be made on such Distribution Date, reduced by Uncompensated
Interest Shortfall, with respect to the applicable Loan Group, and the interest
portion of Realized Losses, with respect to the applicable Loan Group, allocated
to such Class pursuant to the definition of "Uncompensated Interest Shortfall"
and Section 3.20. After the Distribution Date in March 2007 and March 2005,
30
the Class IA-3 Certificates and Class IIA-4 Certificates, respectively, shall be
entitled to a portion of the Interest Distribution Amount in the manner set
forth in the previous sentence and under the definition of "Certificate
Distribution Amount."
INTEREST ONLY CERTIFICATES: The Class IA-4 and Class IIA-5 Certificates.
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.
LIQUIDATED LOAN: A Loan as to which the Servicer has determined in
accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust Fund shall
not constitute final liquidation of the related Loan.
LIQUIDATION EXPENSES: Reasonable out of pocket expenses incurred by the
Servicer in connection with the liquidation of any Defaulted Loan or property
acquired in respect thereof, including, without limitation, legal fees and
expenses, any unreimbursed amount expended by the Servicer pursuant to Section
3.7 respecting the related Loan and any unreimbursed expenditures for real
property taxes or for property restoration or preservation relating to the
Mortgaged Property that secured such Loan.
LIQUIDATION PRINCIPAL: The principal portion of Liquidation Proceeds
received with respect to each Loan which became a Liquidated Loan (but not in
excess of the Principal Balance thereof) during the applicable Prepayment
Period, exclusive of the related Discount Fraction of Liquidation Proceeds
received with respect to each Discount Loan, if any.
LIQUIDATION PROCEEDS: Amounts after deduction of amounts reimbursable
under Section 3.7 received and retained in connection with the liquidation of
Defaulted Loans (including the disposition of REO Property), whether through
foreclosure or otherwise, other than Insurance Proceeds.
LOAN GROUP: Loan Group I and Loan Group II, as applicable.
LOAN GROUP I: The group of Loans comprised of Group I Loans.
LOAN GROUP II: The group of Loans comprised of Group II Loans.
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".
31
LOAN SCHEDULE: The schedule, as amended from time to time, of Loans
attached hereto as Exhibit D, which shall set forth as to each Loan the
following, among other things:
(i) the loan number of the Loan and name of the related Mortgagor;
(ii) the street address of the Mortgaged Property including city, state and zip code;
(iii) the Mortgage Interest Rate as of the Cut-Off Date;
(iv) the original term and maturity date of the related Mortgage Note;
(v) the original Principal Balance;
(vi) the first payment date;
(vii) the Monthly Payment in effect as of the Cut-Off Date;
(viii) the date of the last paid installment of interest;
(ix) the unpaid Principal Balance as of the close of business on the Cut-Off Date;
(x) the Loan-to-Value ratio at origination;
(xi) the type of property and the Original Value of the Mortgaged Property;
(xii) whether a primary mortgage insurance policy is in effect as of the Cut-Off Date;
(xiii) the nature of occupancy at origination;
(xiv) the servicing fee;
(xv) the county in which Mortgaged Property is located, if available;
(xvi) the Loan Group;
(xvii) the applicable index, its gross margin, its lifetime minimum
rate (if any), its lifetime maximum rate, its periodic
maximum adjustment, the frequency of its Mortgage Interest
Rate adjustment and its first monthly payment adjustment
date; and
(xviii)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.
32
MONTHLY PAYMENT: The scheduled payment of principal and interest on a
Loan which is due on the related Due Date for such Loan after giving effect to
any reduction in the amount of interest collectible from any Mortgagor pursuant
to the Relief Act.
MOODY'S: Xxxxx'x Investors Service, Inc. provided, that at any time it
is a Rating Agency.
MORTGAGE: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
MORTGAGE FILE: As defined in Section 2.1
MORTGAGE INTEREST RATE: For any Loan, the per annum rate at which
interest accrues on such Loan pursuant to the terms of the related Mortgage Note
without regard to any reduction thereof as a result of the Relief Act.
MORTGAGE NOTE: The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Loan.
MORTGAGE POOL: All of the Loans.
MORTGAGED PROPERTY: With respect to any Loan, the real property,
together with improvements thereto, securing the indebtedness of the Mortgagor
under the related Loan.
MORTGAGOR: The obligor on a Mortgage Note.
NET WAC: With respect to any Distribution Date, (x) in the case of the
Group I Loans or the Group II Loans, the weighted average of the Pass-Through
Rates of the Loans in such Group of Loans, as applicable, as of the day
immediately following the Due Date in the month immediately preceding the month
of the applicable Distribution Date, weighed on the basis of their Scheduled
Principal Balances or (y) in the case of the Loans, the weighted average of the
Pass-Thru Rates of the Loans as of the day immediately following the Due Date in
the month immediately preceding the month of the applicable Distribution Date,
weighted on the basis of their Scheduled Principal Balances.
NONRECOVERABLE ADVANCE: With respect to any Loan, any Advance which the
Servicer shall have determined to be a Nonrecoverable Advance pursuant to
Section 4.4 and which was, or is proposed to be, made by such Servicer.
NON-U.S. PERSON: A Person that is not a U.S. Person.
OFFICER'S CERTIFICATE: With respect to any Person, a certificate signed
by the Chairman of the Board, the President or a Vice-President of such Person
(or, in the case of a Person which is not a corporation, signed by the person or
persons having like responsibilities), and delivered to the Trustee.
33
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.
OTS: The Office of Thrift Supervision, or any successor thereto.
OWNER: A Person who owns a beneficial interest in one or more Global
Certificates.
OWNERSHIP INTEREST: As defined in Section 5.1(b)
PASS-THROUGH ENTITY: As defined in Section 5.1(b)
PASS-THROUGH RATE: For each Loan and for any date of determination, a
per annum rate equal to the Mortgage Interest Rate for such Loan less the
applicable per annum percentage rate of the Servicing Fee. For each Loan, any
calculation of monthly interest at such rate shall be based upon annual interest
at such rate (computed on the basis of a 360-day year of twelve 30-day months)
on the unpaid Principal Balance of the related Loan divided by twelve, and any
calculation of interest at such rate by reason of a Payoff shall be based upon
annual interest at such rate on the outstanding Principal Balance of the related
Loan multiplied by a fraction, the numerator of which is the number of days
elapsed from the Due Date of the last scheduled payment of principal and
interest to, but not including, the date of such Payoff, and the denominator of
which is (a) for Payoffs received on a Due Date, 360, and (b) for all other
Payoffs, 365.
PAYING AGENT: As defined in Section 4.10.
PAYOFF: Any Mortgagor payment of principal on a Loan equal to the entire
outstanding Principal Balance of such Loan, if received in advance of the last
scheduled Due Date for such Loan and accompanied by an amount of interest equal
to accrued unpaid interest on the Loan to the date of such payment-in-full.
PAYOFF EARNINGS: For any Distribution Date with respect to each Loan on
which a Payoff was received by the Servicer during the Prepayment Period, the
aggregate of the interest earned by Servicer from investment of each such Payoff
from the date of receipt of such Payoff until the last day of such Prepayment
Period (net of investment losses).
34
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;
(ii) with respect to the Interest Only Certificates, the portion of
the respective Class Notional Amount evidenced by such Certificate
divided by the respective Class Notional Balance; and
(iii) with respect to the Class R Certificate, the percentage set
forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection with
Sections 5.9, 7.1, 7.3, 8.3 and 10.1, "Percentage Interest" shall mean the
percentage undivided beneficial interest evidenced by such Certificate in the
Trust Fund, which for purposes of such rights only shall equal:
(i) with respect to any Certificate (other than the Interest Only
Certificates), the product of (x) 98.00% and (y) the percentage
calculated by dividing its Certificate Principal Balance by the
Aggregate Certificate Principal Balance; provided, however, that the
product in (x) above shall be increased by one percent (1%) upon each
retirement of an Interest Only Certificate;
(ii) with respect to each Interest Only Certificate, one percent
(1%) of such Certificate Percentage Interest as calculated by paragraph
(a)(ii) of this definition; and
(iii) with respect to the Class R Certificate, zero.
PERMITTED TRANSFEREE: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing, (ii) a foreign government or International Organization, or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any electing large partnership under Section 775
of the Code, (vi) any Person from whom the Trustee or the Certificate Registrar
has not received an affidavit to the
35
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.
PLAN: As defined in Section 5.1(d).
PLANNED PRINCIPAL BALANCE: For any Distribution Date, the amount set
forth in the table attached hereto as Exhibit M for such Distribution Date, for
the Class IA-1 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 CERTIFICATES: The Class IA-3 Certificates and Class IIA-4
Certificates.
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PRINCIPAL PAYMENT: Any payment of principal on a Loan other than a
Principal Prepayment.
PRINCIPAL PAYMENT AMOUNT: On any Distribution Date, the sum, determined
separately for each Loan Group, of (i) the scheduled principal payments on the
Loans due on the related Due Date, (ii) the principal portion of repurchase
proceeds received with respect to any Loan which was repurchased by the
Depositor pursuant to a Purchase Obligation or as permitted by this Agreement
prior to such Distribution Date, and (iii) any other unscheduled payments of
principal which were received with respect to any Loan during the applicable
Prepayment Period, other than Payoffs, Curtailments and Liquidation Principal.
PRINCIPAL PREPAYMENT: Any payment of principal on a Loan which
constitutes a Payoff or a Curtailment.
PRINCIPAL PREPAYMENT AMOUNT: On any Distribution Date, the sum,
determined separately for each Loan Group, of (i) Curtailments received during
the applicable Prepayment Period from such related Loans and (ii) Payoffs
received during the applicable Prepayment Period from the related Loans.
PRO RATA ALLOCATION: The allocation of the principal portion of certain
losses relating to a Loan in a Loan Group to the Senior Certificates related to
that Loan Group (other than the Principal Only certificates and Interest Only
Certificates) and/or to the Subordinate Certificates, as applicable, pro rata
according to their respective Certificate Principal Balances (except if the loss
is recognized with respect to an applicable Discount Loan, in which event the
related Discount Fraction of such loss will be allocated to the Class IA-3
certificates if such loss is recognized prior to March 2007 and to the Class
IIA-4 certificates if such loss is recognized prior to March 2005, and the
remainder of such loss will be allocated as described above in this definition
without regard to this parenthetical) in reduction thereof, and the allocation
of the interest portion of such losses to such Certificates, as applicable
(other than the Principal Only certificates), pro rata according to the amount
of interest accrued but unpaid on each such Class in reduction thereof and then
pro rata according to their outstanding Certificate Principal Balances in
reduction thereof. For purposes of Pro Rata Allocation in part to the
Subordinate Certificates, each Class of Subordinate Certificates will be deemed
to have a Class Principal Balance equal to the following:
Class Principal Balance x Group I Subordinate Amount (for a loss on a
Group I Loan) or of that certificate GROUP II SUBORDINATE AMOUNT (FOR A
LOSS ON A GROUP II LOAN)
Group I Subordinate Amount + Group II Subordinate Amount
PURCHASE OBLIGATION: An obligation of the Depositor to repurchase Loans
under the circumstances and in the manner provided in Section 2.2 or Section
2.3.
PURCHASE PRICE: With respect to any Loan to be purchased pursuant to a
Purchase Obligation, or any Loan to be purchased or repurchased relating to an
REO Property, an amount equal to the sum of the Principal Balance thereof, plus
accrued and unpaid interest thereon, if any, to the last day of the calendar
month in which the date of repurchase occurs at a rate equal to the applicable
Mortgage Interest 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)
37
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 Moody's and S & P; thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Depositor, or their respective successors in
interest.
RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by each Rating Agency.
REALIZED LOSS: For any Distribution Date, with respect to any Loan which
became a Liquidated Loan during the related applicable Prepayment Period, the
sum of (i) the principal balance of such Loan remaining outstanding and the
principal portion of Nonrecoverable Advances actually reimbursed with respect to
such Loan (the principal portion of such Realized Loss), and (ii) the accrued
interest on such Loan remaining unpaid and the interest portion of
Nonrecoverable Advances actually reimbursed with respect to such Loan (the
interest portion of such Realized Loss). For any Distribution Date, with respect
to any Loan which is not a Liquidated Loan, the amount of the Bankruptcy Loss
incurred with respect to such Loan as of the related Due Date will be treated as
a Realized Loss.
RECORD DATE: The last Business Day of the month immediately preceding
the month of the related Distribution Date.
REGULAR INTEREST CERTIFICATES: The Certificates, other than the Class R
Certificate.
REGULATION S: Regulation S under the Securities Act.
REGULATION S GLOBAL CERTIFICATES: The Regulation S Temporary Global
Certificates and the Regulation S Permanent Global Certificates.
REGULATION S PERMANENT GLOBAL CERTIFICATES: As defined in Section 5.1(e)
hereof.
REGULATION S TEMPORARY GLOBAL CERTIFICATES: As defined in Section 5.1(e)
hereof.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date and
Loan, any reduction in the amount of interest collectible on such Loan for the
most recently ended calendar month immediately preceding such Distribution Date
as a result of the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as such term is
defined in the Code.
38
REMIC I: The pool of assets (other than any Escrow Account or Accounts)
consisting of the Trust Fund.
REMIC I REGULAR INTERESTS: The regular interests in REMIC I as described
in Section 2.4 of this Agreement.
REMIC II: The pool of assets consisting of the REMIC I Regular Interests
and all payments of principal or interest on or with respect to the REMIC I
Regular Interests after the Cut-Off Date.
REMIC II REGULAR INTERESTS: The regular interests in REMIC II as
described in Section 2.4 of this Agreement.
REMIC III: The pool of assets consisting of the REMIC II Regular
Interests and all payments of principal or interest on or with respect to the
REMIC II Regular Interests after the Cut-Off Date.
REMIC III REGULAR INTERESTS: The regular interests in REMIC III as
described in Section 2.4 of this Agreement.
REMIC IV: The pool of assets consisting of the REMIC III Regular
Interests and all payments of principal or interest on or with respect to the
REMIC III Regular Interests after the Cut- Off Date.
REMIC IV REGULAR INTERESTS: The regular interests in REMIC IV as
described in Section 2.4 of this Agreement.
REMIC III SUBORDINATED BALANCE RATIO: The ratio between the principal
balances of each of the REMIC III Regular Interests ending with the designation
"SUB," equal to the ratio of: (1) the Group I Subordinate Amount, to the (2)
Group II Subordinate Amount.
REMIC PROVISIONS: Sections 860A through 860G of the Code, related Code
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REMITTANCE RATE: The "Remittance Rate" for the Class IA-1 Certificates
shall be the Class IA-1 Interest Rate. The "Remittance Rate" for the Class IA-2
Certificates shall be the Class IA-2 Interest Rate. The "Remittance Rate" for
the Class IA-3 Certificates shall be the Class IA-3 Interest Rate. The
"Remittance Rate" for the Class IA-4 Certificates shall be the Class IA-4
Interest Rate. The "Remittance Rate" for the Class IIA-1 Certificates shall be
the Class IIA-1 Interest Rate. The "Remittance Rate" for the Class IIA-2
Certificates shall be the Class IIA-2 Interest Rate. The "Remittance Rate" for
the Class IIA-3 Certificates shall be the Class IIA-3 Interest Rate. The
"Remittance Rate" for the Class IIA-4 Certificates shall be the Class IIA-4
Interest Rate. The "Remittance Rate" for the Class IIA-5 Certificates shall be
the Class IIA-5 Interest Rate. The "Remittance Rate" for the Class R
Certificates shall be the Class R Interest Rate. The "Remittance Rate" for the
Subordinate Certificates shall be the Subordinate Interest Rate.
39
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 X-0, X-0, X-0 and R-4 of the Class R Certificate are
hereby each designated the sole Class of "residual interests" in REMIC I, REMIC
II, REMIC III and REMIC IV, respectively, for purposes of Section 860G(a)(2) of
the Code.
RESIDUAL DISTRIBUTION AMOUNT: On any Distribution Date, any portion of
the Group I and Group II Available Distribution Amounts remaining after all
distributions to the Certificates pursuant to the definition of Certificate
Distribution Amount (including the Class R Certificate only to the extent of any
distributions to the Class R Certificate pursuant to clause (I)(C)(iv)(a) of
such definition). Upon termination of the obligations created by this Agreement
and the Trust Fund created hereby, the amounts which remain on deposit in the
Certificate Account after payment to the Certificateholders of the amounts set
forth in Section 9.1 of this Agreement, and subject to the conditions set forth
therein.
RESPONSIBLE OFFICER: When used with respect to the Trustee or any
Seller, the Chairman or Vice-Chairman of the Board of Directors or Trustees, the
Chairman or Vice-Chairman of the 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.
RULE 144: Rule 144 under the Securities Act.
RULE 144A: Rule 144A, promulgated under the Securities Act, as amended.
40
RULE 144A GLOBAL CERTIFICATES: As defined in Section 5.1(e) hereof.
S&P: Standard & Poor's, a division of The McGraw Hill Companies, Inc.,
provided, that at anytime it is a Rating Agency.
SCHEDULED PRINCIPAL BALANCE: With respect to any Loan as of any
Distribution Date, the unpaid principal balance of such Loan as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such schedule by reason of bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period) as of the first day of the month preceding the
month of such Distribution Date, after giving effect to any previously applied
Curtailments, the payment of principal due on such first day of the month and
any reduction of the principal balance of such Loan by a bankruptcy court,
irrespective of any delinquency in payment by the related Mortgagor.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: ABN AMRO Mortgage Group, Inc.
SENIOR CERTIFICATES: The Class A Certificates and the Class R
Certificate, collectively.
SENIOR SUBORDINATE CERTIFICATES: The Class M, Class B-1 and Class B-2
Certificates, collectively.
SERVICER: ABN AMRO Mortgage Group, Inc., a Delaware corporation, or any
successor thereto appointed as provided pursuant to Section 7.5, acting to
service and administer such Loans pursuant to Section 3.1.
SERVICER'S SECTION 3.10 REPORT: A report delivered by the Servicer to
the Trustee or the Certificate Administrator pursuant to Section 3.10.
SERVICING FEE: For each Loan, the fee paid to the Servicer to perform
primary servicing functions with respect to such Loan, equal to the per annum
rate of 0.3750% for each Loan in the Loan Schedule on the outstanding Principal
Balance of such Loan.
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
$8,841,169 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
41
in the immediately preceding month, and (2) the initial Special Hazard Coverage
as of the Cut-Off Date as reduced by the Special Hazard Losses allocated to the
Certificates since the Cut-Off Date. Special Hazard Coverage may be reduced upon
written confirmation from each Rating Agency that such reduction will not
adversely affect the then current ratings assigned to the Certificates by each
Rating Agency.
SPECIAL HAZARD LOSS: The occurrence of any direct physical loss or
damage to a Mortgaged Property not covered by a standard hazard maintenance
policy with extended coverage which is caused by or results from any cause
except: (i) fire, lightning, windstorm, hail, explosion, riot, riot attending a
strike, civil commotion, vandalism, aircraft, vehicles, smoke, sprinkler
leakage, except to the extent of that portion of the loss which was uninsured
because of the application of a co- insurance clause of any insurance policy
covering these perils; (ii) normal wear and tear, gradual deterioration,
inherent vice or inadequate maintenance of all or part thereof; (iii) errors in
design, faulty workmanship or materials, unless the collapse of the property or
a part thereof ensues and then only for the ensuing loss; (iv) nuclear reaction
or nuclear radiation or radioactive contamination, all whether controlled or
uncontrolled and whether such loss be direct or indirect, proximate or remote or
be in whole or in part caused by, contributed to or aggravated by a peril
covered by this definition of Special Hazard Loss; (v) hostile or warlike action
in time of peace or war, including action in hindering, combating or defending
against an actual, impending or expected attack (a) by any government or
sovereign power (DEJURE OR DEFACTO), or by an authority maintaining or using
military, naval or air forces, (b) by military, naval or air forces, or (c) by
an agent of any such government, power, authority or forces; (vi) any weapon of
war employing atomic fission or radioactive force whether in time of peace or
war; (vii) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such occurrence; or (viii) seizure or destruction under quarantine or
customs regulations, or confiscation by order of any government or public
authority.
SUBORDINATE AMOUNT: means the Group I Subordinate Amount or the Group II
Subordinate Amount, as the context requires.
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-8
through A-13, 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 INTEREST RATE: For any Interest Accrual Period and
corresponding Distribution Date will be an annual rate equal to the weighted
average of (A) for the portion of the Subordinate Certificates attributable to
Loan Group I and any Interest Accrual Period (i) up to and including February
2007, an annual rate equal to 5.85% per annum, subject to a maximum rate equal
to the Adjusted Net WAC for Loan Group I for the related Distribution Date, and
(ii) beginning with the Interest Accrual Period in March 2007, an annual rate
equal to the Net WAC on the Group I Loans, and (B) for the portion of the
Subordinate Certificates attributable to Loan Group II and any Interest Accrual
Period (i) up to and including February 2005, an annual rate equal to 5.35% per
annum, subject to a maximum rate equal to the Adjusted Net WAC for Loan Group II
for the related
42
Distribution Date, and (ii) beginning with the Interest Accrual Period in March
2005, an annual rate equal to the Net WAC on the Group II Loans; with the
weighted average of the rates under clauses (A) and (B) above being calculated
in proportion to the Group I Subordinate Amount and the Group II Subordinate
Amount, respectively.
SUBORDINATE LIQUIDATION AMOUNT: For each Loan Group, the excess, if any,
of the aggregate of Liquidation Principal for all Loans which became Liquidated
Loans during the Prepayment Period, over the related Senior Liquidation Amount
for such Distribution Date.
SUBORDINATE PERCENTAGE: The Group I Subordinate Percentage or Group II
Subordinate Percentage, as applicable.
SUBORDINATE PREPAYMENT PERCENTAGE: As of the Closing Date, determined
separately for each Loan Group, 0% for both Loan Group I and Loan Group II, and
thereafter, with respect to any Distribution Date, the excess of 100% over the
applicable Senior Prepayment Percentage.
SUBORDINATE PRINCIPAL AMOUNT: For each Loan Group on any Distribution
Date, will be equal to the sum of:
(1) the applicable Subordinate Percentage of the related Principal
Payment Amount (exclusive of the portion thereof attributable to
the related Discount Fraction Principal Amount);
(2) the applicable Subordinate Principal Prepayment Amount; and
(3) the applicable Subordinate Liquidation Amount;
PROVIDED, HOWEVER, that the Subordinate Principal Amount for any
Distribution Date on or prior to March 2007 with respect to Loan Group
I, and on or prior to March 2005 with respect to Loan Group II, shall be
reduced to the extent of any amounts required to be
distributed to the related Principal Only certificates with respect to
the applicable Discount Fractional Principal Shortfall on such
Distribution Date; and PROVIDED FURTHER, that the
Subordinate Principal Amount for any Distribution Date for either Loan
Group shall be reduced to the extent of any amounts required to be
distributed to the Senior Certificates relating to the other Loan Group
pursuant to the provisions described in the definition of "Certificate
Distribution Amount" herein.
Any reduction in the applicable Subordinate Principal Amount pursuant to the
proviso above shall offset the amount calculated pursuant to clause (1), clause
(3) and clause (2), in such order of priority. On any Distribution Date, the
applicable 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 applicable Subordination Level
for any Class of Subordinate Certificates is less than such percentage as of the
Closing Date, the pro rata portion of the applicable Subordinate Principal
Prepayment Amount otherwise allocable to the Class or Classes junior to such
Class will be distributed to the most senior
43
Class of the Subordinate Certificates for which the Subordination Level is less
than such percentage as of the Closing Date, and to the Classes of Subordinate
Certificates senior thereto, pro rata according to the Class Principal Balances
of such Classes.
SUBORDINATE PRINCIPAL PREPAYMENT AMOUNT: For each Loan Group on any
Distribution Date, the applicable Subordinate Prepayment Percentage of the
related Principal Prepayment Amount (exclusive of the portion thereof
attributable to the Group I or Group II Discount Fractional Principal Amount).
SUBORDINATION LEVEL: On any specified date, with respect to any Class of
Subordinate Certificates, the percentage obtained by dividing: (1) the sum of
the Class Principal Balances of all Classes of Certificates which are
subordinate in right of payment to such Class as of such date before giving
effect to distributions or allocations of Realized Losses on the Loans on such
date; by (2) the sum of the Class Principal Balances of all Classes of
Certificates as of such date before giving effect to distributions or
allocations of Realized Losses on the Loans on such date.
SUBSTITUTE LOAN: As defined in Section 2.2.
TAX MATTERS PERSON: The Holder of the Class R Certificate issued
hereunder or any Permitted Transferee of such Class R Certificateholder shall be
the initial "tax matters person" for REMIC I, REMIC II, REMIC III and REMIC IV
within the meaning of Section 6231(a)(7) of the Code. For tax years commencing
after any transfer of the Class R Certificate, the holder of the greatest
Percentage Interest in the Class R Certificate at year end shall be designated
as the Tax Matters Person with respect to that year. If the Tax Matters Person
becomes a Disqualified Organization, the last preceding Holder of such
Authorized Denomination of the Class R Certificate that is not a Disqualified
Organization shall be Tax Matters Person pursuant to Section 5.1(c). If any
Person is appointed as tax matters person by the Internal Revenue Service
pursuant to the Code, such Person shall be Tax Matters Person.
TRANSFER: As defined in Section 5.1(b).
TRANSFEREE: As defined in Section 5.1(b).
TRANSFEREE AFFIDAVIT AND AGREEMENT: As defined in Section 5.1(c)(i)(B).
TRUST FUND: The corpus of the trust created pursuant to Section 2.1 of
this Agreement. The Trust Fund consists of (i) the Loans and all rights
pertaining thereto; (ii) such assets as from time to time may be held by the
Trustee (except amounts representing the Servicing Fee and amounts on deposit in
Escrow Accounts); (iii) such assets as from time to time may be held by the
Servicer in a Custodial Account for P&I related to the Loans (except amounts
representing 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
44
8 of the Mortgage Loan Purchase Agreement dated as of the Closing Date, between
the Seller and the Depositor.
TRUSTEE: JPMorgan Chase Bank, a New York state banking corporation, or
its successor-in- interest as provided in Section 8.9, or any successor trustee
appointed as herein provided.
UNCOLLECTED INTEREST: With respect to any Distribution Date for any Loan
on which a Payoff was made by a Mortgagor during the related Prepayment Period,
an amount equal to one month's interest at the applicable Pass-Through Rate on
such Loan less the amount of interest actually paid by the Mortgagor with
respect to such Payoff.
UNCOMPENSATED INTEREST SHORTFALL: With respect to a Loan Group or any
Distribution Date, the excess, if any, of (i) the sum of (a) aggregate
Uncollected Interest with respect to the Loans in the related Loan Group and (b)
aggregate Curtailment Shortfall with respect to the Loans in the related Loan
Group and (c) any shortfall in interest collections in the calendar month
immediately preceding such Distribution Date resulting from a Relief Act
Interest Shortfall with respect to the Loans in the related Loan Group over (ii)
Compensating Interest, which excess shall be allocated to each Class of
Certificates pro rata according to the amount of interest accrued thereon in
reduction thereof.
UNDERWRITERS: Xxxxxx Brothers Inc. and ABN AMRO Financial Services, Inc.
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.
XXXXX FARGO: Xxxxx Fargo Bank, National Association.
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.
45
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, to REMIC II without recourse
all the right, title and interest of the Depositor in and to the REMIC I Regular
Interests, to REMIC III without recourse all the right, title and interest of
the Depositor in and to the REMIC II Regular Interests, and to REMIC IV without
recourse all the right, title and interest of the Depositor in and to the REMIC
III Regular Interests, for the benefit respectively of REMIC IV and the
Certificateholders, including all interest and principal received by the
Depositor with respect to the Loans after the Cut-Off Date (and including
without limitation scheduled payments of principal and interest due after the
Cut-Off Date but received by the Depositor on or before the Cut-Off Date, but
not including payments of principal and interest due on the Loans on or before
the Cut-Off Date). The Depositor, at its own expense, shall file or cause to be
filed protective Form UCC-1 financing statements with respect to the Loans in
the State of Illinois or other applicable jurisdiction, listing itself as
"Debtor" under such financing statement and listing the Trustee, for the benefit
of the Certificateholders, as "Secured Party" under such financing statement.
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee for the benefit of the Certificateholders the
following documents or instruments with respect to each Loan so assigned:
(i) The original Mortgage Note (or, if the original Mortgage Note
has been lost or destroyed, a lost note affidavit and indemnity) bearing
all intervening endorsements endorsed, "Pay to the order of JPMorgan
Chase Bank, as Trustee, for the benefit of the Certificateholders of ABN
AMRO Mortgage Corporation Series 2002-1A Attn: Institutional Services,
000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 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 Depositor shall deliver or cause to
be delivered to the Trustee a true and correct copy of such Mortgage,
together with (1) in the case of a delay caused by the public recording
office, an Officer's Certificate signed by a Responsible Officer of the
Seller stating that such original Mortgage has been dispatched to the
46
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 "JPMorgan Chase Bank, as Trustee,"
which assignment shall be in form and substance acceptable for
recording, or a copy certified by the Seller as a true and correct copy
of the original Assignment which has been sent for recordation. Subject
to the foregoing, such assignments may, if permitted by law, be by
blanket assignments for Loans covering Mortgaged Properties situated
within the same county. If the Assignment is in blanket form, a copy of
the Assignment shall be included in the related individual Mortgage
File.
(iii) The originals of any and all instruments that modify the
terms and conditions of the Mortgage Note, including but not limited to
modification, consolidation, extension and assumption agreements
including any adjustable rate mortgage (ARM) rider, if any,
(iv) The originals of all required intervening assignments, if any,
with evidence of recording thereon, and if such assignment was executed
pursuant to a power of attorney, a certified true copy of the power of
attorney certified by the recorder's office, with evidence of recording
thereon, or certified by a title insurance company or escrow company to
be a true copy thereof; PROVIDED, that if such original assignment or
power of attorney cannot be delivered with evidence of recording thereon
on or prior to the Closing Date because of a delay caused by the public
recording office where such original assignment has been delivered for
recordation or because such original Assignment has been lost, the
Depositor shall deliver or cause to be delivered to the Trustee a true
and correct copy of such Assignment, together with (a) in the case of a
delay caused by the public recording office, an Officer's Certificate
signed by a Responsible Officer of the Seller stating that such original
assignment has been dispatched to the appropriate public recording
official for recordation or (b) in the case of an original assignment
that has been lost, a certificate by the appropriate county recording
office where such assignment is recorded or from a title insurance
company or escrow company indicating that such original was lost and the
copy of the original assignment is a true and correct copy; and
(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.
The documents and instruments set forth in clauses (i) - (v) above shall be
called, collectively, the "Mortgage File".
If the Depositor cannot deliver the original Mortgage with evidence of
recording thereon concurrently with the execution and delivery of this Agreement
because of a delay caused by the
47
public recording office where such original Mortgage has been delivered for
recordation, the Depositor shall deliver to the Trustee an Officer's
Certificate, with a photocopy of such Mortgage attached thereto, stating that
such original Mortgage has been delivered to the appropriate public recording
official for recordation. The Depositor shall promptly deliver to the Trustee
such original Mortgage with evidence of recording indicated thereon upon receipt
thereof from the public recording official.
The Depositor shall, at its own expense, promptly record or cause to be
recorded in the appropriate public real property or other records each
Assignment referred to in Section 2.1(ii), unless the Depositor delivers to the
Trustee an Independent opinion of counsel admitted to practice law in the state
in which such Mortgaged Property is located to the effect that such recordation
is not necessary to secure the interest in the related Mortgaged Properties
against any other transferee or creditor of the Depositor, in which case such
Assignments shall be delivered to the Trustee for the benefit of the
Certificateholders in recordable form. If the Depositor cannot deliver the
original Assignment concurrently with the execution and delivery of this
Agreement solely because it is in the process of being prepared and recorded or
because of a delay caused by the public recording office where such original
Assignment has been delivered for recordation, the Depositor shall deliver a
blanket Officer's Certificate covering all such Assignments stating that such
original Assignment is in the process of being prepared and recorded or it has
been delivered to the appropriate public recording official for recordation. Any
such original recorded Assignment shall be delivered to the Trustee within 180
days following the execution of this Agreement.
If the Depositor cannot deliver the original title insurance policy
concurrently with the execution and delivery of this Agreement, the Depositor
shall promptly deliver each such original title insurance policy as soon as such
policy becomes available but in no event later than 120 days following the
execution of this Agreement.
All rights arising out of Loans including, without limitation, all funds
received on or in connection with a Loan shall be held by the Depositor in trust
for the benefit of the Certificateholders. The Depositor shall maintain a
complete set of books and records for each Loan which shall be clearly marked to
reflect the ownership of each Loan by the Certificateholders.
It is the express intent of this Agreement that the conveyance of the
Loans by the Depositor to the Trustee as provided in this Section 2.1 be, and be
construed as, a sale of the Loans by the Depositor to the Trustee and that the
sale of the Certificates to the Certificateholders, if they are sold, be, and be
construed as, a sale of a 100% interest in the Loans and the Trust Fund to such
Certificateholders. It is, further, not the intention of this Agreement that
such conveyance be deemed a pledge of the Loans by the Depositor to the Trustee
to secure a debt or other obligation of the Depositor. However, in the event
that, notwithstanding the intent of this Agreement, the Loans are held to be
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in the Loans, then (a) this Agreement shall
also be deemed to be a security agreement within the meaning of Articles 8 and 9
of the New York Uniform Commercial Code; (b) the conveyance provided for in this
Section 2.1 shall be deemed to be a grant by the Depositor to the Trustee for
the benefit of the Certificateholders of a security interest in all of the
Depositor's right, title and interest in and to the Loans and all amounts
payable to the holders of the Loans in
48
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Certificate Account, whether
in the form of cash, instruments, securities or other property; (c) the
possession by the Trustee or any Custodian of Mortgage Notes and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "in possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
New York Uniform Commercial Code; and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the benefit of the Certificateholders for the purpose of
perfecting such security interest under applicable law (except that nothing in
this clause (d) shall cause any person to be deemed to be an agent of the
Trustee for any purpose other than for perfection of such security interest
unless, and then only to the extent, expressly appointed and authorized by the
Trustee in writing). The Depositor and the Trustee, upon directions from the
Depositor, shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a perfected security interest in Loans, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement.
The Trustee is authorized to appoint LaSalle Bank National Association,
Standard Federal Bank, N.A., ABN AMRO Mortgage Group, Inc. or any bank or trust
company approved by the Depositor as Custodian of the documents or instruments
referred to under (i) through (v) above, and to enter into a Custodial Agreement
for such purpose and any documents delivered thereunder shall be delivered to
the Custodian and any Officer's Certificates delivered with respect thereto
shall be delivered to the Trustee and the Custodian.
Section 2.2 ACCEPTANCE BY TRUSTEE. The Trustee acknowledges, subject to
the provisions of Section 2.1 and to any document exceptions reported pursuant
to the Trustee's reviews as described below, receipt of the Mortgage Notes (or
lost note affidavits and indemnities), the Mortgages, the assignments of the
Mortgages and the Officer's Certificates referred to in Section 2.1 above, and
declares that it holds and will hold such documents and the other documents
constituting a part of the Mortgage Files delivered to it as Trustee in trust,
upon the trusts herein set forth, for the use and benefit of all present and
future Certificateholders. The Trustee acknowledges that, as of the date of the
execution of this Agreement, the Mortgage Files have been delivered to the
Trustee and the Trustee has conducted a preliminary review of the Mortgage
Files. The Trustee further acknowledges that such review included a review of
the Mortgage Notes (or lost note affidavits and indemnities) to determine that
the appropriate Mortgage Notes (or lost note affidavits and indemnities) have
been delivered and endorsed in the manner set forth in Section 2.1(i). In
connection with such review, the Trustee shall have delivered an exceptions
report indicating any discrepancies relating to such review. In addition, the
Trustee agrees, for the benefit of Certificateholders, to review each Mortgage
File within 45 days, or with respect to assignments which must be recorded,
within 180 days, after execution of this Agreement to ascertain that all
required documents set forth in items (i), (ii) and (v) and, to the extent
delivered to the Trustee, items (iii) and (iv) of Section 2.1 have been executed
and received, and that such documents relate to the
49
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) and (iv). The Trustee shall be under no duty or
obligation to inspect, review or make any independent examination of any
documents contained in each Mortgage File beyond the review specifically
required herein. The Trustee makes no representations as to (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in each Mortgage File or any of the Loans identified on the Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Loan. If at the conclusion of such 45-day period or 180-day period
the Trustee finds any document constituting a part of a Mortgage File not to
have been executed or received or to be unrelated to the Loans identified in
said Exhibit D (each such finding, a "material defect"), the Trustee shall
promptly notify the Depositor, which shall have a period of 90 days after the
REMIC has received notice to correct or cure any such material defect; PROVIDED,
HOWEVER, that if the Trustee shall not have received a document by reason of the
fact that such document shall not have been returned by the appropriate
recording office then the Depositor shall have until a date one year later from
the Cut-Off Date to correct or cure such defect. The Depositor hereby covenants
and agrees that, if any such material defect as defined above is not corrected
or cured, the Depositor will, within 90 days of the REMIC having received
notice, either (i) repurchase the related Loan at a price equal to 100% of the
Principal Balance of such Loan (or any property acquired in respect thereof)
plus accrued interest on such Principal Balance at the applicable Mortgage
Interest Rate to the next scheduled Due Date of such Loan or (ii) substitute for
any Loan to which such material defect relates a different mortgage loan (a
"Substitute Loan") maturing no later than and not more than two years earlier
than the Loan being substituted for and having a principal balance equal to or
less than and a Mortgage Interest Rate equal to or greater than the Mortgage
Interest Rate of the Loan being substituted for, a Loan-to- Value Ratio equal to
or less than the Loan-to-Value Ratio of the Loan being substituted for and
otherwise having such characteristics so that the representations and warranties
of the Depositor set forth in Section 2.3 hereof would not have been incorrect
had such Substitute Loan originally been a Loan; PROVIDED, HOWEVER, that if the
Principal Balance of the original Loan exceeds the principal 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 any REMIC or
constitute a prohibited transaction or substitution under the REMIC provisions
of the Code, and, if applicable, within the meaning of the REMIC Provisions of
the particular State, if any, which would impose a tax on the Trust Fund.
Monthly Payments due with respect to Substitute Loans in the month of
substitution are not a part of the Trust Fund and will be retained by the
Servicer. The Depositor shall notify each Rating Agency of any such
substitution. For the month of substitution, distributions to Certificateholders
will include the Monthly Payment due on the Loan being substituted for in such
month. The purchase price for the repurchased Loan or property shall be
deposited by the Depositor in the Certificate Account and in the case of a
Substitute Loan, the Mortgage File relating thereto shall be delivered to the
Trustee or the Custodian. Upon receipt by the Trustee of written notification of
such deposit signed by a Servicing Officer or the new Mortgage File, as the case
may be, and an Officer's Certificate that such repurchase or substitution is in
accordance with this Agreement, the Trustee shall release or cause to be
released to the
50
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 WITH RESPECT
TO THE LOANS. The Depositor hereby represents and warrants to the Trustee as of
the Closing Date with respect to the Loans:
(i) that the information set forth in the Loan Schedule appearing
as an exhibit to this Agreement is true and correct in all material
respects at the date or dates respecting which such information is
furnished as specified therein;
(ii) that as of the date of the transfer of the Loans to the
Trustee, the Depositor is the sole owner and holder of each Loan free
and clear of all liens, pledges, charges or security interests of any
nature and has full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and assign
the same;
(iii) that as of the date of initial issuance of the Certificates,
no payment of principal of or interest on or in respect of any Loan is
30 days or more past due from the Due Date of such Loan;
(iv) that to the best of the Depositor's knowledge, as of the date
of the transfer of the Loans to the Trustee, there is no valid offset,
defense or counterclaim to any Mortgage Note or Mortgage;
(v) that as of the date of the initial issuance of the
Certificates, there is no proceeding pending, or to the best of the
Depositor's knowledge, threatened for the total or partial condemnation
of any of the Mortgaged Property and, to the best of the Depositor's
knowledge the Mortgaged Property is free of material damage and is in
good repair and neither the Mortgaged Property nor any improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation;
(vi) that each Loan complies in all material respects with
applicable state or federal laws, regulations and other requirements,
pertaining to usury, equal credit opportunity and disclosure laws, and
each Loan was not usurious at the time of origination;
51
(vii) that to the best of the Depositor's knowledge, as of the date
of the initial issuance of the Certificates, all insurance premiums
previously due and owing with respect to the Mortgaged Property have
been paid and all taxes and governmental assessments previously due and
owing, and which may become a lien against the Mortgaged Property, with
respect to the Mortgaged Property have been paid;
(viii) that each Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); all
parties to the Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage; and each Mortgage Note and
Mortgage have been duly and properly executed by the Mortgagor;
(ix) that each Mortgage is a valid and enforceable first lien on
the property securing the related Mortgage Note, and that each Loan is
covered by an ALTA mortgagee title insurance policy or other form of
policy or insurance generally acceptable to FNMA or FHLMC, issued by,
and is a valid and binding obligation of, a title insurer acceptable to
FNMA or FHLMC insuring the originator, its successor and assigns, as to
the lien of the Mortgage in the original principal amount of the Loan
subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage acceptable to
mortgage lending institutions in the area in which the Mortgaged
Property is located or specifically referred to in the appraisal
performed in connection with the origination of the related Loan and (c)
such other matters to which like properties are commonly subject which
do not individually, or in the aggregate, materially interfere with the
benefits of the security intended to be provided by the Mortgage;
(x) that as of the initial issuance of the Certificates, neither
the Depositor nor any prior holder of any Mortgage has, except as the
Mortgage File may reflect, modified the Mortgage in any material
respect; satisfied, canceled or subordinated such Mortgage in whole or
part; released such Mortgaged Property in whole or in part from the lien
of the Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction;
(xi) that each Mortgaged Property consists of a fee simple estate
or a condominium form of ownership in real property;
(xii) the condominium projects that include the condominiums that
are the subject of any condominium loan are generally acceptable to FNMA
or FHLMC;
(xiii) no foreclosure action is threatened or has been commenced
(except for the filing of any notice of default) with respect to the
Loan; and except for payment delinquencies not in excess of 30 days, to
the best of the Depositor's knowledge, there is no default, breach,
violation or event of acceleration existing under the Mortgage or the
Mortgage Note and no
52
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;
(xiv) that each Loan was originated on FNMA or FHLMC uniform
instruments for the state in which the Mortgaged Property is located;
(xv) that based upon a representation by each Mortgagor at the time
of origination or assumption of the applicable Loan, 95.10% of the Group
I Loans and 95.71% of the Group II Loans, measured by Principal Balance
were to be secured by primary residences and no more than 4.90% of the
Group I Loans and 4.29% of the Group II Loans, measured by Principal
Balance were to be secured by second homes;
(xvi) 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;
(xvii) that no Loan had a Loan-to-Value Ratio at origination in
excess of 95%;
(xviii)the Loans were not selected in manner to adversely affect
the interests of the Certificateholders and the Depositor knows of no
conditions which reasonably would cause it to expect any Loan to become
delinquent or otherwise lose value;
(xix) 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;
(xx) 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;
(xxi) each Loan that has a Loan-to-Value Ratio in excess of 80% is
covered by a primary mortgage insurance policy; and
(xxii) that no Loan permits negative amortization or the deferral
of accrued interest.
It is understood and agreed that the representations and warranties set
forth in this Section 2.3 shall survive delivery of the respective Mortgage
Files to the Trustee, or to a Custodian, as the case may be. Upon discovery by
the Depositor, Servicer, the Trustee or any Custodian of a breach of any of the
foregoing representations and warranties (referred to herein as a "breach"),
without regard to any limitation set forth in such representation or warranty
concerning the knowledge of the
53
Depositor as to the facts stated therein, which breach materially and adversely
affects the interests of the Certificateholders in the related Loan, the party
discovering such breach shall give prompt written notice to the others and to
each Rating Agency.
Within 90 days of its discovery or its receipt or the Seller's receipt
of notice of breach, the Depositor shall or shall cause the 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, REMIC II, REMIC III or REMIC IV 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.
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, REMIC II, REMIC III and REMIC IV 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 IV shall consist of the Class A Certificates and the Subordinate
Certificates. The "residual interest" (within the meaning of Section 860G(a)(2)
of the Code) in REMIC IV shall consist of Component R-4 of the Class R
Certificate, which component shall have $100 principal balance. The "regular
interests" (within the meaning of Section 860G(a)(1) of the
54
Code) of REMIC III shall consist of the REMIC III Regular Interest I-ZZZ, the
REMIC III Regular Interest II-ZZZ, the REMIC III Regular Interest I-SUB, the
REMIC III Regular Interest II-SUB, the REMIC III Regular Interest I-PO, the
REMIC III Regular Interest II-PO, the REMIC III Regular Interest I-IO and the
REMIC III Regular Interest II-IO. The "residual interest" (within the meaning of
Section 860(G)(a)(2) of the Code) of REMIC III shall consist of Component R-3 of
the Class R Certificate, which component shall not have a principal balance. The
"regular interests" (within the meaning of Section 860G(a)(1) of the Code) of
REMIC II shall consist of the REMIC II Regular Interest I-PO, the REMIC II
Regular Interest II-PO, the REMIC II Regular Interest I-NON-PO and the REMIC II
Regular Interest II-NON-PO. The "residual interest" (within the meaning of
Section 860(G)(a)(2) of the Code) of REMIC II shall consist of Component R-2 of
the Class R Certificate, which component shall not have a principal balance. The
"regular interests" (within the meaning of Section 860G(a)(1) of the Code) of
REMIC I shall consist of one Regular Interest that represent each Group I Loan
and Group II Loan, other than the Group I Discount Loans and the Group II
Discount Loans and two Regular Interests that represent each Group I Discount
Loan and Group II Discount Loan. 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, which component shall not have a principal balance.
(c) All payments with respect to the REMIC II Regular Interest I-PO,
REMIC II Regular Interest I-NON-PO, REMIC III Regular Interest I-PO, the REMIC
III Regular Interest I-SUB, REMIC III Regular Interest I-IO and the REMIC III
Regular Interest I-ZZZ shall be deemed to have been made solely from the Group I
Loans. All payments with respect to the REMIC II Regular Interest II-PO, REMIC
II Regular Interest II-NON-PO, REMIC III Regular Interest II-PO, the REMIC III
Regular Interest II-SUB, the REMIC III Regular Interest II-ZZZ and the REMIC III
Regular Interest II-IO shall be deemed to have been made solely from the Group
II Loans.
(d) Distributions shall be deemed to be made to the REMIC III Regular
Interests FIRST, to the REMIC III Regular Interest I-PO and the REMIC III
Regular Interest II-PO to the extent of the Group I Discount Fractional
Principal Amount and Group II Discount Fractional Principal Amount, SECOND, to
each REMIC III Regular Interest ending with the designation "SUB," so that the
principal balance of each such REMIC III Regular Interest is equal to 1.0% of
the Group I Subordinate Amount or Group II Subordinate Amount, as the case may
be (except that if on any Distribution Date the Subordinate Amount for any Group
of Loans is greater than the Subordinate Amount for such Group of Loans on the
preceding Distribution Date, the least amount of principal shall be distributed
to the REMIC III Regular Interest I-SUB and the REMIC III Regular Interest
II-SUB necessary to maintain the ratio of the principal amount of the REMIC III
Regular Interest I-SUB to the principal amount of the REMIC III Regular Interest
II-SUB being equal to the REMIC III Subordinate Balance Ratio); THIRD, any
remaining principal to the REMIC III Regular Interest II-ZZZ and REMIC III
Regular Interest II-ZZZ. Realized Losses on Group I and Group II Loans shall be
applied after all distributions have been made on each Distribution Date first,
to each REMIC III Regular Interest ending with the designation "SUB,"
respectively, so that the principal balance of each such REMIC III Regular
Interest is equal to 1.0% of the Group I Subordinate Amount or Group II
Subordinate Amount, as the case may be (except that if on any Distribution Date
the Subordinate Amount for any Group of Loans is greater than the Subordinate
Amount for such Group of Loans on the preceding Distribution Date, the least
amount of principal shall be distributed to the REMIC
55
III Regular Interest I-SUB and the REMIC III Regular Interest II-SUB necessary
to maintain the ratio of the principal amount of the REMIC III Regular Interest
I-SUB to the principal amount of the REMIC III Regular Interest II-SUB being
equal to the REMIC III Subordinate Balance Ratio); second, Realized Losses on
Group I Loans and Group II Loans shall be allocated to the REMIC III Regular
Interest I-ZZZ and REMIC III Regular Interest II-ZZZ, respectively.
(e) All payments with respect to each of the Class IA-3 and Class IIA-4
Certificates shall each be considered to have been made solely from the Regular
Interest of REMIC III having the designation I-PO and II-PO, respectively. All
payments with respect to each of the Class IA-4 and Class IIA-5 Certificates
shall each be considered to have been made solely from the Regular Interest of
REMIC III having the designation I-IO and II-IO, respectively. All payments with
respect to each Class IA Certificate, other than the Class IA-3 and Class IA-4
Certificates, shall be considered to have been made solely from the payments of
the REMIC III Regular Interests I-SUB and the REMIC III Regular Interest I-ZZZ.
All payments with respect to each Class IIA Certificate, other than the Class
IIA-4 and Class IIA-5 Certificates, shall be considered to have been made solely
from the payments of the REMIC III Regular Interests II-SUB and the REMIC III
Regular Interest II-ZZZ.
(f) All payments with respect to the Class M, X-0, X-0, X-0, X-0 and B-5
Certificates of REMIC IV shall be considered to have been made solely from the
REMIC III Regular Interest I- SUB, REMIC III Regular Interest II-SUB, REMIC III
Regular Interest I-ZZZ and REMIC III Regular Interest II-ZZZ. The principal
balance of the REMIC III Regular Interest I-SUB is equal to 1.0% of the Group I
Subordinate Amount (subject to adjustment to maintain the REMIC III Subordinate
Balance Ratio). The principal balance of the REMIC III Regular Interest II-SUB
is equal to 1.0% of the Group II Subordinate Amount (subject to adjustment to
maintain the REMIC III Subordinate Balance Ratio). The principal balance of the
REMIC III Regular Interest I-ZZZ is equal to the excess of (x) the aggregate
Scheduled Principal Balance of the Group I Loans over (y) the aggregate
principal balance of REMIC III Regular Interests I-PO and REMIC III Regular
Interests I-SUB. The interest rate on the REMIC III Regular Interests I-SUB and
REMIC III Regular Interests I-ZZZ is equal to (i) on or prior to the
distribution date in March 2007, the lesser of (a) 5.85% and (b) the Adjusted
Net WAC of the Group I Loans and (ii) thereafter, the Net WAC of the Group I
Loans. The principal balance of the REMIC III Regular Interests II-ZZZ is equal
to the excess of (x) the aggregate Scheduled Principal Balance of the Group II
Loans over (y) the aggregate principal balance of REMIC III Regular Interests
II-PO and REMIC III Regular Interests II-SUB. The interest rate on the REMIC III
Regular Interests II-SUB and REMIC III Regular Interests II- ZZZ is equal to (i)
on or prior to the distribution date in March 2005, the lesser of (a) 5.35% and
(b) the Adjusted Net WAC of the Group II Loans and (ii) thereafter, the Net WAC
of the Group II Loans. Up to and including the Interest Accrual Period in
February 2007, REMIC III Regular Interest I-PO will not accrue interest,
thereafter, REMIC III Regular Interest I-PO will accrue interest at a rate equal
to the Net WAC of the Group I Loans. Up to and including the Interest Accrual
Period in February 2005, REMIC III Regular Interest II-PO will not accrue
interest, thereafter, REMIC III Regular Interest II-PO will accrue interest at a
rate equal to the Net WAC of the Group II Loans. The interest rate on the Class
M, X-0, X-0, X-0, X-0 and B-5 Certificates is equal to the weighted average of
the interest rates of the REMIC III Regular Interest I-SUB and the REMIC III
Regular Interest II-SUB (weighted on the basis of the principal balance of each
such Regular Interest).
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(g) All payments with respect to the REMIC III Regular Interest I-PO and
REMIC III Regular Interests II-PO shall be considered to have been made solely
from the REMIC II Regular Interest I-PO and REMIC II Regular Interests II-PO,
respectively. The principal balance of the REMIC II Regular Interest I-PO is
equal to the sum of the Group I Discount Fraction for each Group I Discount Loan
multiplied by the balance for each Group I Discount Loan. The principal balance
of the REMIC II Regular Interest II-PO is equal to the sum of the Group II
Discount Fraction for each Group II Discount Loan multiplied by the balance for
each Group II Discount Loan. REMIC II Regular Interests I-PO and REMIC II
Regular Interest II-PO will not accrue interest. All payments with respect to
the REMIC III Regular Interest I-IO shall be considered to have been made solely
from the REMIC II Regular Interest I-NON-PO at a per annum rate, not less than
zero, equal to the excess of (i) the Adjusted Net WAC of the Group I Loans over
(ii) 5.85%. All payments with respect to the REMIC III Regular Interest II-IO
shall be considered to have been made solely from the REMIC II Regular Interest
II-NON-PO at a per annum rate, not less than zero, equal to the excess of (i)
the Adjusted Net WAC of the Group II Loans over (ii) 5.35%. All payments with
respect to the REMIC III Regular Interest I-SUB and REMIC III Regular Interests
I-ZZZ shall be considered to have been made solely from REMIC II Regular
Interest I-NON-PO. The interest rate on the REMIC II Regular Interests I-NON-PO
is equal to the Adjusted Net WAC of the Group I Loans. All payments with respect
to the REMIC III Regular Interest II-SUB and REMIC III Regular Interests II-ZZZ
shall be considered to have been made solely from REMIC II Regular Interest
II-NON-PO. The interest rate on the REMIC II Regular Interests II-NON-PO is
equal to the Adjusted Net WAC of the Group II Loans. The principal balance of
the REMIC II Regular Interest I-NON-PO is equal to the sum of the excess of (i)
the balance of the Group I Loans over (ii)the Class Principal Balance of the
REMIC II Regular Interest I-PO. The principal balance of the REMIC II Regular
Interest II- NON-PO is equal to the sum of the excess of (i) the balance of the
Group II Loans over (ii)the Class Principal Balance of the REMIC II Regular
Interest II-PO.
(h) All payments with respect to the REMIC II Regular Interest I-PO and
REMIC II Regular Interests II-PO shall be considered to have been made solely
from the REMIC I Regular Interests representing the Group I Discount Fraction
for each Group I Discount Loan and the Group II Discount Fraction for each Group
II Discount Loan, respectively. All payments with respect to the REMIC II
Regular Interests I-NON-PO shall be considered to have been made solely from the
REMIC I Regular Interests representing the Group I Loans, other than the REMIC I
Regular Interest representing the Group I Discount Fraction for each Group I
Discount Loan multiplied by the balance of the Group I Discount Loans. All
payments with respect to the REMIC II Regular Interests II-NON-PO shall be
considered to have been made solely from the REMIC I Regular Interests
representing the Group II Loans, other than the REMIC I Regular Interest
representing the Group II Discount Fraction for each Group II Discount Loan
multiplied by the balance of the Group II Discount Loans. Each Group I Discount
Loan and each Group II Discount Loan will be represented by two REMIC I Regular
Interests. Each Loan, other than a Group I Discount Loan or Group II Discount
Loan, will be represented by one REMIC I Regular Interest. The REMIC I Regular
Interests which represent the Group I Discount Fraction of each Group I Discount
Loan and Group II Discount Fraction of each Group II Discount Loan will not
accrue interest. The REMIC I Regular Interests which represent the Group I
Loans, other than the Group I Discount Loans, will accrue interest at a rate
equal to the Pass-Through Rate of each such Group I Loan. The REMIC I Regular
Interests which represent the excess of the Group I Discount Loan balance over
the Group I Discount
57
Fraction for each such Group I Discount Loan will accrue interest at a rate
equal to the Pass-Through Rate for such Loan multiplied by a fraction, the
numerator of which is the principal balance of such Loan and the denominator of
which is equal to the balance of such REMIC I Regular Interest. The REMIC I
Regular Interests which represent the Group II Loans, other than the Group II
Discount Loans, will accrue interest at a rate equal to the Pass-Through Rate of
each such Group II Loan. The REMIC I Regular Interests which represent the
excess of the Group II Discount Loan balance over the Group II Discount Fraction
for each such Group II Discount Loan will accrue interest at a rate equal to the
Pass-Through Rate for such Loan multiplied by a fraction, the numerator of which
is the principal balance of such Loan and the denominator of which is equal to
the balance of such REMIC I Regular Interest.
Section 2.5 DESIGNATION OF STARTUP DAY. The Closing Date is hereby
designated as the "startup day" of each of REMIC I, REMIC II, REMIC III and
REMIC IV 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 any of
REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify as a REMIC at any
time that any Class A or Subordinate Certificates are outstanding or subject the
Trust Fund to any tax on contributions to the REMIC under Section 860G(d) of the
Code.
Section 2.7. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer hereby represents, warrants and covenants to the Trustee for the
benefit of Certificateholders that, as of the date of execution of this
Agreement:
(a) the Servicer is a corporation duly formed and validly
existing under the laws of the State of Delaware;
(b) the execution and delivery of this Agreement by the Servicer
and its performance of and compliance with the terms of this Agreement
will not violate the Servicer's corporate charter or by-laws or
constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of,
any material contract, agreement or other instrument to which the
Servicer is a party or which may be applicable to the Servicer or any of
its assets;
(c) this Agreement, assuming due authorization, execution and
delivery by the Trustee and the Depositor, constitutes a valid, legal
and binding obligation of the Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
58
(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 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
59
(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 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, REMIC II,
REMIC III and REMIC IV 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, REMIC II, REMIC III and REMIC IV, 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
60
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, REMIC II Regular
Interests, REMIC III REMIC Regular Interests, or REMIC IV Certificates are
outstanding so as to maintain the status of each of REMIC I, REMIC II, REMIC III
and REMIC IV 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 any of REMIC I, REMIC II, REMIC III or REMIC
IV.
(c) The Servicer may enter into sub-servicing agreements with third
parties with respect to any of its respective obligations hereunder, PROVIDED,
that (1) any such agreement shall be consistent with the provisions of this
Agreement and (2) no sub-servicer retained by the Servicer shall grant any
modification, waiver or amendment to any Loan without the approval of the
Servicer. Any such sub-servicing agreement may permit the sub-servicer to
delegate its duties to agents or subcontractors so long as the related
agreements or arrangements with such agents or subcontractors are consistent
with the provisions of this Section 3.1(c).
Any sub-servicing agreement entered into by the Servicer with a Person
other than the Depositor shall provide that it may be assumed or terminated by
the Trustee if the Trustee has assumed the duties of the Servicer, without cost
or obligation to the assuming or terminating party or the Trust Fund, upon the
assumption by such party of the obligations of the Servicer pursuant to Section
7.5.
Any sub-servicing agreement, and any other transactions or services
relating to the Loans involving a sub-servicer, including (if applicable) the
Depositor in its capacity as sub-servicer under a sub-servicing agreement and
not in its capacity as a party to this Agreement, shall be deemed to be between
the Servicer and such sub-servicer (including the Depositor) alone, and the
Trustee and the Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to the
sub-servicer, except as set forth in Section 3.1(d).
In the event that the Trustee assumes the servicing obligations of the
Servicer, upon request of the Trustee, the Servicer shall at its own expense
deliver to the Trustee all documents and records relating to any sub-servicing
agreement and the Loans then being serviced thereunder and an accounting of
amounts collected and held by it, if any, and will otherwise use its best
efforts to effect the orderly and efficient transfer of any sub-servicing
agreement to the Trustee.
(d) Costs incurred by the Servicer in effectuating the timely payment of
taxes and assessments on the Mortgaged Property securing a Mortgage Note shall
be recoverable by the Servicer pursuant to Section 3.3. The Servicer shall
ensure all such taxes and assessments are timely paid.
The Servicer, as initial servicer, shall pay all of its costs and proven
damages incurred with respect to or arising out of any allegation of impropriety
in its servicing of the Loans. Further, the
61
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.
Section 3.2 COLLECTION OF CERTAIN LOAN PAYMENTS; CUSTODIAL ACCOUNT
FOR P&I.
(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Loans, and shall, to the extent
such procedures shall be consistent with this Agreement, follow such collection
procedures as it follows with respect to conventional mortgage loans it services
for itself and any of its Affiliates; PROVIDED, HOWEVER, that the Servicer
agrees not to permit any modification with respect to any Loan that would change
the manner in which the Mortgage Interest Rate is computed, forgive any
principal or interest or change the term of such Loan. Consistent with the
foregoing, the Servicer may in its discretion (i) waive any assumption fee, late
payment charge or other charge in connection with a Loan, and (ii) arrange a
schedule, running for no more than 180 days after the scheduled Due Date, for
payment of any installment on any Mortgage Note or after the due date of any
other payment due under the related Mortgage Note for the liquidation of
delinquent items, PROVIDED, that the Servicer shall continue to be obligated to
make Advances in accordance with Section 4.3 during the continuance of such
period. With respect to any Loans which provide for the right of the holder
thereof to call for early repayment thereof at times specified therein, neither
the Trustee nor the Servicer shall exercise any such right, except that the
Trustee shall exercise such right at the written direction of the Servicer set
forth in an Officer's Certificate in connection with a default under the related
Note. Notwithstanding anything herein to the contrary, neither the Servicer nor
any other party may take any action that would cause a "significant
modification" of any Loan within the meaning of the REMIC Provisions that would
cause REMIC I, REMIC II, REMIC III or REMIC IV 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
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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 Mortgage or released to the Mortgagor in
accordance with the Servicer's normal servicing procedures, and all
amounts deposited by the Servicer with respect to the failure to
maintain flood or fire and hazard insurance policies, pursuant to
Section 3.5;
(v) All repurchase proceeds from the repurchase of a Loan
pursuant to a Purchase Obligation;
(vi) any amounts required to be deposited pursuant to Section
3.2(c) in connection with net losses realized on Eligible Investments
with respect to funds held in the Custodial Account for P&I;
(vii) all income and gain realized from any investment of the
funds in the Custodial Account for P&I in Eligible Investments;
(viii) all net income from the renting of REO Property pursuant
to Section 3.7(c); and
(ix) All other amounts required to be deposited in the Custodial
Account for P&I pursuant to this Agreement.
(c) The Servicer may invest the funds in the Custodial Account for P&I
in Eligible Investments which shall mature not later than the second Business
Day preceding the next Distribution Date unless the Custodial Account for P&I is
maintained with the Trustee in which case they may mature one Business Day prior
to the Distribution Date. The Eligible Investments may not be sold or disposed
of prior to their maturity. All such Eligible Investments shall be made in the
name of the Servicer (in its capacity as such) or its nominee. All income and
gain realized from any such investment shall be for the benefit of the Servicer,
and shall be payable to the Servicer. The amount of any losses incurred in
respect of any such investments shall be deposited in the Custodial Account for
P&I by the Servicer, out of its own funds immediately as realized without right
to reimbursement therefor.
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(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 Certificates by each Rating Agency. If the
Servicer deposits in the Custodial Account for P&I any amount not required to be
deposited therein, it may at any time withdraw such amount from the Custodial
Account for P&I pursuant to Section 3.3(i) of this Agreement.
Certain of the Loans may provide for payment by the Mortgagor of amounts
to be used for payment of taxes, assessments, hazard or other insurance premiums
or comparable items for the account of the Mortgagor. The Servicer may deal with
these amounts in accordance with its normal servicing procedures.
Section 3.3 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT FOR P&I.
The Servicer may, from time to time, make withdrawals from the Custodial Account
for P&I for the following purposes:
(a) to reimburse itself for Advances made by it pursuant to Section
3.4 or 4.3, the Servicer's right to reimburse itself pursuant to this
subclause (a) being limited to (i) amounts received on or in respect of
particular Loans (including, for this purpose, Liquidation Proceeds and
Insurance Proceeds which represent late recoveries of payments of
principal and/or interest respecting which any such Advance was made and
any net income received from the renting of REO Property pursuant to
Section 3.7(c)) and (ii) amounts in the Custodial Account for P&I held
for future distribution or withdrawal, such amounts referred to in
clause (ii) of this subclause (a) to be replaced by the Servicer to the
extent that funds in the Custodial Account for P&I on a future
Withdrawal Date are less than the payment required to be made to the
Certificate Account therefrom as of such future Distribution Date;
(b) (i) to reimburse itself from Liquidation Proceeds for
Liquidation Expenses, (ii) for amounts expended by it pursuant to
Section 3.7 in good faith in connection with the restoration of damaged
property and (iii) to the extent that Liquidation Proceeds after such
reimbursement are in excess of the Principal Balance of the related Loan
together with accrued and unpaid interest thereon at the applicable
Pass-Through Rate to the date of such liquidation, net of any related
Advances which were unreimbursed prior to the receipt of such
Liquidation Proceeds, to pay to itself any unpaid Servicing Fees, and
any assumption fees, late payment charges or other Mortgage charges on
the related Loan;
(c) to pay to itself from any Mortgagor payment as to interest or
other recovery with respect to a particular Loan, to the extent
permitted by this Agreement, that portion of any
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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;
(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 Servicer pursuant to Section 9.1 all amounts
received thereon and not distributed as of the date on which the related
Principal Balance is determined;
(f) to reimburse itself for any Nonrecoverable Advances;
(g) to disburse to the Trustee or its designee in order that the
Trustee or its designee may make payments to Certificateholders in the
amounts and in the manner provided for in Section 4.1;
(h) to pay itself any net interest or other income earned and
received on or investment income received with respect to funds in the
Custodial Account for P & I; and
(i) to make payments to itself or others pursuant to any provision
of this Agreement and to remove any amounts not required to be deposited
therein and to clear and terminate the Custodial Account for P&I
pursuant to Section 9.1.
Since in connection with withdrawals pursuant to subclauses (a), (b),
(c) and (e) the Servicer's entitlement thereto is limited to collections or
other recoveries on the related Loan, the Servicer shall keep and maintain a
separate accounting for each Loan for the purpose of justifying any withdrawal
from the Custodial Account for P&I pursuant to such subclauses.
The Servicer shall make the withdrawal referred to in subclause (g)
above and shall deposit the amount so withdrawn into the Certificate Account
prior to 4:00 P.M. New York City time on each related Withdrawal Date.
Section 3.4 TAXES, ASSESSMENTS AND SIMILAR ITEMS; ESCROW ACCOUNTS.
(a) The Servicer shall establish and maintain one or more accounts
(each, an "Escrow Account") into which all Escrow Payments shall be deposited
and in which all Escrow Payments shall be retained. Escrow Accounts shall be
Eligible Accounts, and funds in the Escrow Account may be invested in Eligible
Investments. The Servicer shall notify the Trustee in writing of the location
and account number of each Escrow Account it establishes and shall notify the
Trustee prior to any subsequent change thereof. Withdrawals of amounts from an
Escrow Account may be made only to: (i) effect payment of taxes, assessments,
insurance premiums and comparable items; (ii) refund to Mortgagors any sums that
are determined to be overages; (iii) reimbursement to the Servicer for any cost
incurred in paying taxes, insurance premiums and assessments or comparable
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items; (iv) pay interest, if required and as described below, to Mortgagors on
balances in the Escrow Account; (v) withdraw interest or other income which may
lawfully be retained by the Trust Fund, for deposit into the Certificate
Account; or (vi) clear and terminate the Escrow Account at the termination of
this Agreement in accordance with Section 9.1. Unless otherwise required by
applicable law, any interest earned on funds in Escrow Accounts shall be
remitted to the related Mortgagors if required by the related Mortgage Note or
otherwise to the Servicer as additional servicing compensation.
(b) With respect to each Loan, the Servicer shall maintain accurate
records with respect to each related Mortgaged Property reflecting the status of
taxes, assessments and other similar items that are or may become a lien on the
related Mortgaged Property and the status of insurance premiums payable with
respect thereto. The Servicer shall require that payments for taxes,
assessments, insurance premiums and other similar items be made by the Mortgagor
at the time they first become due. If a Mortgagor fails to make any such payment
on a timely basis, the Servicer shall advance the amount of any shortfall unless
the Servicer determines in its good faith judgment that such advance would not
be ultimately recoverable from future payments and collections on the related
Loan (including without limitation Insurance Proceeds and Liquidation Proceeds),
or otherwise. The Servicer shall be entitled to reimbursement of advances it
makes pursuant to the preceding sentence, together with interest thereon at the
Federal Funds Rate, from amounts received on or in respect of the related Loan
respecting which such advance was made or if such advance has become
nonrecoverable, in either case to the extent permitted by Section 3.3 of this
Agreement. No costs incurred by the Servicer in effecting the payment of taxes
and assessments on the Mortgaged Properties shall, for the purpose of
calculating distributions to Certificateholders, be added to the amount owing
under the related Loans, notwithstanding that the terms of such Loans so permit.
Section 3.5 MAINTENANCE OF INSURANCE. The Servicer shall also cause to
be maintained for each Loan fire and hazard insurance with extended coverage as
is customary in the area where the Mortgaged Property is located in an amount
which is at least equal to the lesser of (i) the Principal Balance of such Loan
or (ii) the replacement value costs of improvements securing such Loan. The
Servicer shall cause to be maintained fire and hazard insurance with extended
coverage on each REO Property in an amount which is at least equal to the
greater of (i) an amount not less than is necessary to avoid the application of
any co-insurance clause contained in the related fire and hazard insurance
policy or (ii) the replacement cost of the improvements which are a part of such
property. The Servicer shall also cause to be maintained for each Loan with a
Loan-to-Value Ratio greater than 80% a primary mortgage insurance policy which
will cover at least 75% of the original fair market value of the related
Mortgaged Property until such time as the principal balance of such Loan is
reduced to 80% of the current fair market value or otherwise in accordance with
applicable law. The Servicer on behalf of the Trustee as Mortgagee shall
maintain or cause the related Mortgagor to maintain for each Loan such other
insurance on the related Mortgaged Property as may be required by the terms of
the related Mortgage Note. If the Mortgaged Property is in an area identified in
the Federal Register by the Flood Emergency Management Agency as having special
flood hazards the Servicer will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the least of (i) the full insurable value,
(ii) the maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973,
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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 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,
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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 will enforce any due-on-sale clause
contained in the related Mortgage Note or Mortgage, to the extent permitted
under applicable law and governmental regulations, but only to the extent that
such enforcement will not adversely affect or jeopardize coverage under any
related insurance policy or result in legal action by the Mortgagor. Subject to
the foregoing, the Servicer is authorized to take or enter into an assumption or
substitution agreement from or with the Person to whom such property has been or
is about to be conveyed. The Servicer is also authorized to release the original
Mortgagor from liability upon the Loan and substitute the new Mortgagor as
obligor thereon. In connection with such assumption or substitution, the
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual and as it applies to mortgage loans
owned solely by it or any of its Affiliates. The Servicer shall notify the
Trustee that any such assumption or substitution agreement has been completed by
forwarding to the Trustee the original copy of such assumption or substitution
agreement, which copy shall be added by the Trustee to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
In connection with any such assumption or substitution agreement, the interest
rate of the related Mortgage Note shall not be changed. Any fee collected by the
Servicer for entering into an assumption or substitution of liability agreement
will be retained by the Servicer as servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the Mortgaged Property or any assumption of a Loan by operation of
law which the Servicer in good faith determines it may be restricted by law from
preventing, for any reason whatsoever.
Section 3.7 REALIZATION UPON DEFAULTED LOANS.
(a) Consistent with the servicing standard set forth in Section 3.1 and
with a view to the best economic interest of the Trust Fund, the Servicer shall
foreclose upon or otherwise comparably convert (which may include acquisition of
an REO Property) the Mortgaged Properties securing such of the Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.2. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities. The
foregoing is subject to the proviso that the Servicer shall not be required to
expend its own funds in connection with any foreclosure or to restore any
damaged property unless it shall determine (i) that such foreclosure and/or
restoration expenses will increase the Liquidation Proceeds to
Certificateholders after reimbursement to itself for such expenses and (ii) that
such expenses will be recoverable to it through Liquidation Proceeds (respecting
which it shall have priority for
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purposes of withdrawal from the Custodial Account for P&I pursuant to Section
3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be
distributed to the Class R Certificateholder, but only to the extent that such
gain is not necessary to make distributions to the Certificateholders of the
other Classes of Certificates. The Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; PROVIDED, HOWEVER,
that it shall be entitled to reimbursement thereof (as well as any Servicing
Fees and other amounts due it, if any), to the extent, but only to the extent,
that withdrawals from the Custodial Account for P&I with respect thereto are
permitted under Section 3.3. Within 30 days after receipt of Liquidation
Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the
Trustee a statement of accounting for the related Liquidated Loan, including
without limitation (i) the Loan number, (ii) the date the Loan was acquired in
foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan,
(iii) the gross sales price and the related selling and other expenses, (iv)
accrued interest calculated from the foreclosure date to the liquidation date,
and (v) such other information as the Trustee may reasonably specify.
(b) Prior to any such foreclosure, the Servicer may, at its option,
repurchase any Loan which is 90 days or more delinquent and which the Servicer
determines in good faith would otherwise become subject to foreclosure
proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of
foreclosure at a price equal to the outstanding Principal Balance of the Loan
plus accrued interest at the applicable Pass-Through Rate to the next Due Date.
Any such repurchase shall be deemed a Principal Prepayment for purposes of this
Agreement and all amounts in respect thereof shall be deposited into the
Custodial Account for P&I pursuant to Section 3.2(b).
(c) The Trust Fund shall not acquire any real property (or personal
property incident to such real property) except in connection with a default or
imminent default of a Loan. Based on a report prepared by an Independent Person
who regularly conducts environmental audits that the Mortgaged Property for
which foreclosure proceedings are contemplated is in compliance with applicable
environmental laws, and there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous materials,
wastes, or petroleum based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or that it would be in the best economic interest of
the Trust Fund to acquire title to such Mortgaged Property and further to take
such actions as would be necessary and appropriate to effect such compliance
and/or respond to such circumstances, the Servicer will not conduct such
foreclosure proceedings. If the Servicer otherwise becomes aware, under its
customary servicing procedures, of an environmental hazard with respect to a
Loan for which foreclosure proceedings are contemplated, the Servicer will not
conduct such foreclosure proceedings unless it determines in good faith that the
liability associated with the environmental hazard will be less than the
Liquidation Proceeds to be realized from the sale of the related Mortgaged
Property. In the event that the Trust Fund acquires any real property (or
personal property incident to such real property) in connection with a default
or imminent default of a Loan, such REO Property shall be disposed of by the
Trust Fund within three years after its acquisition by the Trust Fund unless the
Trustee shall have received from the Servicer an Opinion of Counsel to the
effect that the holding by the Trust Fund of such REO Property subsequent to
three years after its acquisition will not cause any of REMIC I, REMIC II, REMIC
III or REMIC IV to fail to qualify as a REMIC under the REMIC Provisions at any
time that any REMIC I Regular Interests or
69
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, REMIC II, REMIC III and REMIC IV 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).
(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 any of REMIC I, REMIC II, REMIC III or REMIC IV 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
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Custodial Account for P&I pursuant to Section 3.2 have been or will be so
deposited) and shall by such Officer's Certificate request delivery to it of the
Mortgage File. Upon receipt of such Officer's Certificate and request, the
Trustee shall promptly release or cause to be released the related Mortgage File
to the Servicer. Upon the Trustee's receipt of any release or reconveyance
documents or instruments relating to the Loan paid in full, the Trustee shall,
not later than the 5th succeeding Business Day, execute and return such
documents and instruments to the Servicer. From time to time and as appropriate
for the servicing or foreclosure of any Loan, the Trustee shall, upon written
request of the Servicer and delivery to the Trustee of a trust receipt signed by
a Servicing Officer, release or cause to be released the related Mortgage File
to the Servicer and shall execute such documents furnished to it as shall be
necessary to the prosecution of any such proceedings. Such trust receipt shall
obligate the Servicer to return each and every document previously requested
from the Mortgage File to the Trustee when the need therefor by the Servicer no
longer exists unless the Loan shall be liquidated, in which case, upon receipt
of a certificate of a Servicing Officer similar to that hereinabove specified,
the trust receipt shall be released by the Trustee to the Servicer by delivery
to a Servicing Officer and the Trustee shall have no further responsibility with
respect to such Mortgage Files.
Section 3.9 SERVICING COMPENSATION. The Servicer shall be entitled to
retain or, if not retained, to withdraw from the Certificate Account as
servicing compensation its Servicing Fee out of each payment on account of
interest on each Loan, subject to adjustment as provided in Section 4.6. The
Servicer shall also be entitled to payment of unpaid Servicing Fees with respect
to a delinquent Loan out of Liquidation Proceeds with respect to such Loan, to
the extent permitted by Section 3.3(b). Servicing compensation in the form of
assumption fees, late payment charges or otherwise shall be retained by the
Servicer and need not be deposited in the Custodial Account for P&I. The
Servicer shall also be entitled to additional servicing compensation out of
Liquidation Proceeds to the extent provided in Section 3.3(b). The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including maintenance of the blanket hazard
insurance policy and the blanket fidelity bond and errors and omissions policy
required by Section 3.5) and shall not be entitled to reimbursement therefor
except as specifically provided in Sections 3.1, 3.3, 3.5 and 3.7.
On each Distribution Date, the Servicer shall pay to the Certificate
Administrator and the Trustee the Certificate Administration and Trustee Fee out
of the Servicing Fee retained by the Servicer on such Distribution Date. Such
amounts shall be compensation for the activities of the Certificate
Administrator and the Trustee hereunder. The Certificate Administrator and the
Trustee shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor,
except as specifically provided herein.
Section 3.10 REPORTS TO THE TRUSTEE; CUSTODIAL ACCOUNT FOR P&I
STATEMENTS. On or before each Determination Date, the Servicer shall deliver or
cause to be delivered to the Trustee or its designee a statement in electronic
or written form as may be agreed upon by the Servicer and the Trustee containing
the information described in Section 4.2 and such other information as may be
necessary for the Trustee to distribute the amounts to be distributed to the
Certificateholders by the Trustee (the "Servicer's Section 3.10 Report"). Not
later than 25 days after each Distribution Date, the Servicer shall forward or
cause to be forwarded to the Trustee a statement, certified by a
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Servicing Officer, setting forth the status of the Custodial Account for P&I as
of the close of business on the related Distribution Date, stating that all
distributions from the Custodial Account for P&I required to be made by this
Agreement have been made for the period covered by such statement (or if any
required distribution has not been made, specifying the nature and status
thereof) and showing, for the period covered by such statement, the aggregate of
deposits into and withdrawals from the Custodial Account for P&I for each
category of deposit specified in Section 3.2 and each category of withdrawal
specified in Section 3.3. Such statement shall also include information as to
the aggregate Principal Balance of all of the Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided to any Certificateholder upon request by the
Servicer, or by the Trustee so long as the Trustee has received the report as
stipulated above at the Servicer's expense if the Servicer shall fail to provide
such copies.
Section 3.11 ANNUAL STATEMENT AS TO COMPLIANCE. The Servicer will
deliver to the Trustee, on or before March 15 of each year, beginning March 15,
2003, an Officer's Certificate stating as to each signer thereof, that (i) a
review of the activities of the Servicer during the preceding calendar year and
of performance under this Agreement has been made under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of such statement shall be provided to each
Rating Agency and to any Certificateholder upon request by the Servicer, or by
the Trustee at the Servicer's expense.
Section 3.12 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT. On
or before March 15 of each year, beginning March 15, 2003, the Servicer, at its
expense, shall cause a firm of independent public accountants who are members of
the American Institute of Certified Public Accountants to furnish a statement to
the Trustee and each Rating Agency to the effect that such firm has examined
certain documents and records relating to the servicing of the Loans and that,
either (a) on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for FHLMC, such firm is
of the opinion that such servicing has been conducted in compliance with the
manner of servicing set forth in agreements substantially similar to this
Agreement except for (i) such exceptions as such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such
statement or, (b) that their examination conducted substantially in compliance
with the uniform single audit program for mortgage bankers disclosed no
exceptions or errors in records relating to mortgage loans serviced for others
that in their opinion are material and that Paragraph 4 of that program requires
them to 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
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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 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 Purchase 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
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an Independent appraiser or other expert in real estate matters retained by the
Trustee the expense of which shall be an expense of the Trust Fund. In
determining whether any bid constitutes a fair price for any Defaulted Loan or
any REO Property, the Servicer or the Trustee (or, if applicable, such
appraiser) shall take into account, and any appraiser or other expert in real
estate matters shall be instructed to take into account, as applicable, among
other factors, the period and amount of any delinquency on the affected
Defaulted Loan, the physical condition of the related Mortgaged Property or such
REO Property, the state of the local economy and the Trust Fund's obligation to
dispose of any REO Property within the time period specified in Section 3.7(c).
(c) The Servicer shall act on behalf of the Trust Fund in negotiating
and taking any other action necessary or appropriate in connection with the sale
of any Defaulted Loan or REO Property, including the collection of all amounts
payable in connection therewith. Any sale of a Defaulted Loan or any REO
Property shall be without recourse to, or representation or warranty by, the
Trustee, the Depositor, the Servicer or the Trust Fund (except that any contract
of sale and assignment and conveyance documents may contain customary warranties
of title, so long as the only recourse for breach thereof is to the Trust Fund),
and, if consummated in accordance with the terms of this Agreement, neither the
Servicer, the Depositor nor the Trustee shall have any liability to the Trust
Fund or any Certificateholder with respect to the purchase price therefor
accepted by the Servicer or the Trustee.
(d) The proceeds of any sale after deduction of the expenses of such
sale incurred in connection therewith shall be promptly deposited in the
Custodial Account for P&I in accordance with Section 3.2(b).
Section 3.16 DELEGATION OF DUTIES. In the ordinary course of business,
the Servicer or the Trustee may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the applicable terms
of this Agreement. In case of such delegation, the Servicer or the Trustee shall
supervise, administer, monitor and oversee the activities of such Person
hereunder to insure that such Person performs such duties in accordance herewith
and shall be responsible for the acts and omissions of such Person to the same
extent as it is responsible for its own actions or omissions hereunder. Any such
delegations shall not relieve the Servicer or the Trustee of its liability and
responsibility with respect to such duties, 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 Subordinate
Certificates or a holder of a class of securities representing interests in such
Class of Subordinate Certificates, such agreement to be (i) substantially in the
form of Exhibit R hereto or (ii) subject to each Rating Agency's acknowledgment
that the ratings of the Certificates in effect immediately prior to the entering
into of such agreement would not be qualified, downgraded or withdrawn and the
Certificates would not be placed on credit
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review status (except for possible upgrading) as a result of such agreement. Any
such agreement may contain provisions whereby such holder may instruct the
Servicer to commence or delay foreclosure proceedings with respect to delinquent
Loans and may contain provisions for the deposit of cash by the holder that
would be available for distribution to Certificateholders if Liquidation
Proceeds are less than they otherwise may have been had the Servicer acted in
accordance with its normal procedures.
Section 3.20 ALLOCATION OF REALIZED LOSSES. Prior to each Distribution
Date, the Servicer shall determine the amount of Realized Losses, if any, 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 Excess Losses, 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, for losses on Group I Loans, to the Class
IA Certificates, by Pro Rata Allocation, and for losses on Group II Loans, to
the Class IIA Certificates and Class R Certificate, until the Certificate
Principal Balances thereof have been reduced to zero; 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,
for losses on Group I Loans, to the Class IA Certificates and Class R
Certificate, by Pro Rata Allocation, and for losses on Group II Loans to the
Class IIA Certificates, until the aggregate of the Certificate Principal
Balances thereof have been reduced to zero; PROVIDED, HOWEVER, that prior to the
Credit Support Depletion Date if the loss is recognized (a) with respect to a
Group I Discount Loan prior to March 2007, the Group I Discount Fraction of such
loss shall be allocated to the Class IA-3 Certificates and the remainder of such
loss will be allocated as described in clause (i) above, and (b) with respect to
a Group II Discount Loan prior to March 2005, the Group II Discount Fraction of
such loss shall be allocated to the Class IIA-4 Certificates and the remainder
of such loss will be allocated as described in clause (ii) above.
Excess Losses shall be allocated among the Senior Certificates and the
Subordinate Certificates by Pro Rata Allocation.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement (without
regard to this paragraph), if the Aggregate Certificate Principal Balance of all
outstanding Classes of Certificates exceeds the aggregate principal balance of
the Loans in both loan groups, 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 (i) first, to the
Subordinate Certificates in reverse order of seniority until each of their Class
Principal Balances has been reduced to zero, and (ii) second, to the Senior
Certificates, other than the Interest Only Certificates, pro rata according to
their Certificate Principal Balances, in reduction thereof.
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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 each Loan Group for such Distribution Date and shall distribute to
each Certificateholder, from the amount so withdrawn and to the extent of the
Available Distribution Amount for each Loan Group, such Certificateholder's
share (based on the aggregate Percentage Interests represented by the
Certificates of the applicable Class held by such Certificateholder) of the
amounts and in the order of priority as set forth in the definition of
"Certificate Distribution Amount" and (ii) distribute Excess Liquidation
Proceeds to the Class R Certificateholder, by wire transfer in immediately
available funds for the account of the Certificateholder or by any other means
of payment acceptable to each Certificateholder of record on the immediately
preceding Record Date (other than as provided in Section 9.1 respecting the
final distribution), as specified by each such Certificateholder and at the
address of such Holder appearing in the Certificate Register; PROVIDED, that if
the Trustee has appointed a Certificate Administrator, such distributions in (i)
and (ii) above shall be made in accordance with written statements received from
the Certificate Administrator pursuant to Section 4.2.
(c) All reductions in the Certificate Principal Balance of a Certificate
effected by distributions of principal or allocations of Realized Losses with
respect to Loans made on any Distribution Date shall be binding upon all Holders
of such Certificate and of any Certificate issued upon the registration of
transfer or exchange therefor or in lieu thereof, whether or not such
distribution is noted on such Certificate. The final distribution of principal
of each Certificate (and the final distribution with respect to the Class R
Certificate upon termination of the Trust Fund) shall be payable in the manner
provided above only upon presentation and surrender thereof on or after the
Distribution Date therefor at the office or agency of the Trustee or Certificate
Administrator, if any, specified in the notice delivered pursuant to Section
4.1(d) or Section 9.1.
(d) Whenever, on the basis of Curtailments, Payoffs and Monthly Payments
on the Loans and Insurance Proceeds and Liquidation Proceeds received and
expected to be received during the applicable Prepayment Period, the Trustee
believes, or the Certificate Administrator, if any, has notified the Trustee
that it believes, that the entire remaining unpaid Class Principal Balance of
any Class of Certificates will become distributable on the next Distribution
Date, the Trustee or the Certificate Administrator, if any, shall, no later than
the Determination Date of the month of such Distribution Date, mail or cause to
be mailed to each Person in whose name a Certificate to be so retired is
registered at the close of business on the Record Date, to the Underwriters and
to each Rating Agency a notice to the effect that:
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(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution will
be payable on such Distribution Date, but only upon presentation and
surrender of such Certificate at the office or agency of the Certificate
Registrar maintained for such purpose (the address of which shall be set
forth in such notice), and (B) no interest shall accrue on such
Certificate after such Distribution Date.
Section 4.2 STATEMENTS TO CERTIFICATEHOLDERS. (a) Not later than each
Determination Date, the Servicer shall forward to the Trustee or the Certificate
Administrator, if any, the Servicer's Section 3.10 Report setting forth certain
information with respect to the Loans. With each distribution from the
Certificate Account on a Distribution Date, the Trustee or the Certificate
Administrator, if any, shall, based on the information set forth in the
Servicer's Section 3.10 Report, prepare and forward or make available through
the Trustee's or the Certificate Administrator's, as the case may be, internet
website (which initially will be the Certificate Administrator's internet
website located at xxx.xxxxxxxx.xxx) to each Certificateholder[, as well as to
Aurora Loan Services at 0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000, Attention: Xxxx Xxxxxxxxxx (or if electronically to
"xxxxxxxxxxx@xxxxxxxxxx.xxx")], 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 in lieu of foreclosure or other exercise of
rights respecting the Trustee's security interest in the Loans;
(iii) The aggregate Principal Balance of the Loans as of the
close of business on the last day of the related Prepayment Period;
(iv) The amount of the Servicing Fee retained or withdrawn by the
Servicer from the Certificate Account and the amount of any Excess
Liquidation Proceeds received by the Servicer during the related
Prepayment Period;
(v) The amount of Special Hazard Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
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(vi) The amount of Bankruptcy Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(vii) The amount of Fraud Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(viii) The amount of Realized Losses incurred in respect of each
Loan Group allocable to the related Certificates on the related
Distribution Date and the cumulative amount of Realized Losses
incurred in respect of each Loan Group allocated to such Certificates
since the Cut-Off Date;
(ix) The amount of interest accrued but not paid on the each
Class of Certificates entitled to interest since (a) the prior
Distribution Date and (b) the Cut-Off Date;
(x) The amount of funds advanced by the Servicer on the related
Withdrawal Date; and
(xi) The total amount of Payoffs and Curtailments received during
the related Prepayment Period.
Upon written request by any Certificateholder, the Trustee or the
Certificate Administrator (if so appointed by the Trustee), as soon as
reasonably practicable, shall provide the requesting Certificateholder with such
information as is necessary and appropriate, in Trustee's or the Certificate
Administrator's sole discretion, for purposes of satisfying applicable reporting
requirements under Rule 144A of the Securities Act.
(b) Upon written request to the Trustee or Certificate Administrator (if
so appointed by the Trustee) by any Certificateholder who is a Holder thereof at
the time of making such request (an "Eligible Certificateholder"), the Trustee
or the Certificate Administrator, if applicable, shall provide in electronic
format loan by loan data with respect to the payment experience of the Loans
containing at least the fields of information listed on Exhibit E hereto (based
on information provided by the Servicer). In addition, upon the written request
of any Eligible Certificateholder, the Trustee or the Certificate Administrator
shall provide similar loan by loan data with respect to any prior monthly
remittance report to the Certificateholders pursuant to this Agreement (as and
when such information becomes available). The expense of providing any tape or
disk pursuant to this subsection shall be an expense of the Eligible
Certificateholder.
Section 4.3 ADVANCES BY THE SERVICER; DISTRIBUTION REPORTS TO THE
TRUSTEE. To the extent described below, the Servicer is obligated to advance its
own funds to the Certificate Account to cover any shortfall between (i) payments
scheduled to be received in respect of Loans serviced by such Servicer, and (ii)
the amounts actually deposited in the Certificate Account on account of such
payments. The Servicer's obligation to make any Advance or Advances described in
this Section 4.3 is effective only to the extent that such Advance is, in the
good faith judgment of the Servicer, reimbursable from Insurance Proceeds or
Liquidation Proceeds of the related Loans or recoverable as late Monthly
Payments with respect to the related Loans or otherwise.
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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 shall be entitled to reimbursement for any Advance as
provided in Section 3.3 of this Agreement.
In the event that the Trustee has appointed a Certificate Administrator,
prior to 5:00 P.M. New York City time on the Withdrawal Date, the Certificate
Administrator shall provide the Trustee with a statement regarding the amount of
principal and interest, the Residual Distribution Amount and the Excess
Liquidation Proceeds to be distributed to each Class of Certificates on such
Distribution Date (such amounts to be determined in accordance with the
definition of "Certificate Distribution Amount", Section 4.1 hereof and other
related definitions set forth in Article I hereof).
Section 4.4 NONRECOVERABLE ADVANCES. Any Advance previously made by the
Servicer with respect to a Loan that the Servicer shall determine in its good
faith judgment not to be ultimately recoverable from Insurance Proceeds or
Liquidation Proceeds or otherwise with respect to such Loan or recoverable as
late Monthly Payments with respect to such Loan shall be a Nonrecoverable
Advance. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any advance would constitute a Nonrecoverable Advance, shall be
evidenced by an Officer's Certificate of the Servicer delivered to the Trustee
on the Determination Date and detailing the reasons for such determination.
Notwithstanding any other provision of this Agreement, any insurance policy
relating to the Loans, or any other agreement relating to the Loans to which the
Depositor or the Servicer is a party, (a) the Servicer shall not be obligated
to, and shall not, make any advance that, after reasonable inquiry and in its
sole discretion, it determines would be a
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Nonrecoverable Advance, and (b) the Servicer shall be entitled to reimbursement
for any Nonrecoverable Advance as provided in Section 3.3 of this Agreement.
Section 4.5 FORECLOSURE REPORTS. Each year beginning in 2003 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 2003, 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.
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 or, if the
tax relates to REMIC III, Component R-3 of the Class R Certificate, or, if the
tax relates to REMIC IV, Component R-4 of the Class R Certificate) on a pro rata
basis, then against amounts otherwise
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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 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
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administrator (the "Certificate Administrator"), as the case may be, in order to
delegate to such Eligible Institution any of its duties under this Agreement to
administer the issuance, transfer and exchange of the Certificates, administer
payments to Certificateholders or prepare information related to the
Certificates; PROVIDED, that the Trustee shall remain primarily responsible for
any duties so delegated; PROVIDED, FURTHER, that the Trustee shall receive no
additional compensation in connection with such appointment and delegation.
Initially, LaSalle Bank National Association will be the Certificate
Administrator and Paying Agent. If LaSalle Bank National Association ceases to
serve as Certificate Administrator or Paying Agent, the Trustee shall send
written notice to all Certificateholders (i) indicating that LaSalle Bank
National Association is no longer in such capacity and (ii) setting forth its
replacement, if any, appointed pursuant to this Section 4.10.
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 Trust Fund by
authorized officers of the Trustee. Certificates bearing the manual or facsimile
signatures of individuals who were at the time of execution the proper officers
of the Trustee shall bind the Trust Fund, notwithstanding that such individuals
or any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Trustee or any Authenticating Agent by manual signature, and
such certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The following definitions apply for purposes of this Section 5.1:
"Disqualified Organization" means any Person which is not a Permitted
Transferee, but does not include any "Pass-Through Entity" which owns or holds a
Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary; "Pass-Through Entity"
means any regulated investment company, real estate investment trust, common
trust fund, partnership, trust or estate, and any organization to which Section
1381 of the Code applies; "Ownership Interest" means, with respect to any
Residual Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the Holder
thereof and any other interest therein whether direct or indirect, legal or
beneficial, as owner or as pledgee; "Transfer" means any direct or indirect
transfer or sale of, or directly or indirectly
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transferring or selling, any Ownership Interest in a Residual Certificate; and
"Transferee" means any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
(c) Restrictions on Transfers of the Residual Certificate to
Disqualified Organizations are set forth in this Section 5.1(c).
(i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the Trustee, the
Certificate Administrator or the Paying Agent under clause (iii)(A)
below to deliver payments to a Person other than such Person and to
negotiate the terms of any 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.
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(D) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate agrees by holding or acquiring such
Ownership Interest (i) to require a Transferee Affidavit and
Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest and to provide a certificate to the
Trustee or the Certificate Registrar if not the same Person as the
Trustee in the form attached hereto as Exhibit J; (ii) to obtain
the express written consent of the Depositor prior to any transfer
of such Ownership Interest, which consent may be withheld in the
Depositor's sole discretion; and (iii) to provide a certificate to
the Trustee or the Certificate Registrar if not the same Person as
the Trustee in the form attached hereto as Exhibit I.
(ii) The Trustee or the Certificate Registrar if not the same
Person as the Trustee shall register the Transfer of any Residual
Certificate only if it shall have received the Transferee Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the
form attached hereto as Exhibit J and all of such other documents as
shall have been reasonably required by the Trustee or the Certificate
Registrar if not the same Person as the Trustee as a condition to such
registration.
(iii) (A) If any Disqualified Organization shall become a Holder of
a Residual Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
such Transfer of such Residual Certificate. If any Non-U.S. Person shall
become a Holder of a Residual Certificate, then the last preceding
Holder which is a U.S. Person shall be restored, to the extent permitted
by law, to all rights and obligations as Holder thereof retroactive to
the date of registration of the Transfer to such Non-U.S. Person of such
Residual Certificate. If a transfer of a Residual Certificate is
disregarded pursuant to the provisions of Treasury Regulations Section
1.860E-1 or Section 1.860G-3, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. The Trustee,
the Certificate Administrator, the Certificate Registrar and the Paying
Agent shall be under no liability to any Person for any registration of
Transfer of a Residual Certificate that is in fact not permitted by this
Section 5.1(c) or for making any payments due on such Certificate to the
Holder thereof or for taking any other action with respect to such
Holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of the
Residual Certificate in violation of the restrictions in this Section
5.1(c) and to the extent that the retroactive restoration of the rights
of the Holder of such Residual Certificate as described in clause
(iii)(A) above shall be invalid, illegal or unenforceable, then the
Depositor shall have the right, without notice to the Holder or any
prior Holder of such Residual Certificate, to sell such Residual
Certificate to a purchaser selected by the Depositor on such terms as
the Depositor may choose. Such purported Transferee shall promptly
endorse and deliver the Residual Certificate in accordance with the
instructions of the Depositor. Such purchaser may be the Depositor
itself or any affiliate of the Depositor. The proceeds of such sale, net
of the commissions (which may include commissions payable to the
Depositor or its
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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:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE
PROVIDES A TRANSFEREE AFFIDAVIT AND AGREEMENT TO THE
DEPOSITOR, THE TRUSTEE AND THE CERTIFICATE REGISTRAR THAT
(1) SUCH TRANSFEREE IS NOT EITHER (A) THE UNITED STATES, ANY
STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING,
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(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) (i) No purchase or transfer of a Senior Certificate or a Senior
Subordinate Certificate or any interest therein shall be made by or to any
"employee benefit plan" subject to ERISA or any "plan" described by Section
4975(e)(1) of the Code, or any entity deemed to hold plan assets of any of the
foregoing by reason of a plan's investment in such entity (each, a "Plan")
unless (A) in the case of any such Class of Certificates (other than the Class R
Certificate), such Plan qualifies as an accredited investor as defined in Rule
501(a)(1) of Regulation D under the Securities Act and either (1) at the time of
such transfer, the Certificates are rated in one of the top four rating
categories by at least one Rating Agency, or (2) the purchaser is an insurance
company general account that is eligible for, and satisfies all of the
requirements of, Sections I and III of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60") and (B) in the case of a Class R Certificate, the Trustee
receives an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor and the Servicer to the effect that
the purchase or holding of such Class R Certificate is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA, or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor or the Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section
86
4975 of the Code) in addition to those undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Trustee, the Depositor or the
Servicer. Each Person who acquires a Senior Certificate or a Senior Subordinate
Certificate shall be deemed to certify that it meets the foregoing conditions,
and that it will not transfer such Certificate in violation of the foregoing.
(ii) No purchase or transfer of a Junior Subordinate Certificate
shall be made by or to a Plan unless such purchaser or transferee is an
"insurance company general account" (within the meaning of PTCE 95-60)
and is eligible for, and satisfies all of the requirements for exemptive
relief under Sections I and III of PTCE 95-60. Each Person who acquires
a Junior Subordinate Certificate or any interest therein shall be deemed
to certify and shall be required by the Certificate Registrar to provide
an Officer's Certificate (substantially in the form set forth in Exhibit
L hereto) signed by a Responsible Officer of such Person, which
Officer's Certificate shall not be an expense of the Trustee, the
Certificate Administrator, if any, the Certificate Registrar or the
Depositor) that it meets the foregoing conditions, and that it will not
transfer such Certificate in violation of the foregoing.
(e) GLOBAL CERTIFICATES. Each class of Junior Subordinate Certificates
offered and sold to QIBs in reliance on Rule 144A shall be issued initially in
the form of one or more Global Certificates (the "Rule 144A Global
Certificates"), which shall be deposited on behalf of the purchasers of the
Book-Entry Certificates represented thereby with the Trustee, as custodian for
the Depository, and registered in the name of the Depository or a nominee of the
Depository, duly executed and authenticated by the Trustee (or any duly
appointed Authenticating Agent). The aggregate principal amount of the Rule 144A
Global Certificates may from time to time be increased or decreased by
adjustments made on the records of the Certificate Registrar and the Depository
or its nominee as hereinafter provided.
Each class of the Junior Subordinate Certificates offered and sold in
reliance on Regulation S shall be issued initially, and during the "40 day
distribution compliance period" described below remain, in the form of temporary
Global Certificates (the "Regulation S Temporary Global Certificates"), which
shall be deposited on behalf of the purchasers of the Book-Entry Certificates
represented thereby with the Trustee, as custodian for the Depository, and
registered in the name of the Depository or the nominee of the Depository for
the investors' respective accounts at the Euroclear Operator or Clearstream,
Luxembourg, duly executed and authenticated by the Trustee (or any duly
appointed Authentication Agent) as hereinafter provided.
The "40 day distribution compliance period" (as defined in Regulation S)
shall be terminated upon the later of (i) 40 days after the Closing Date and
(ii) receipt by the Trustee of a written certificate from the Depository,
together with copies of certificates from the Euroclear Operator and
Clearstream, Luxembourg, certifying that they have received certification of
non-United States beneficial ownership of 100% of the aggregate principal amount
of the Regulation S Temporary Global Certificates (except to the extent of any
beneficial owners thereof who will take delivery of a beneficial ownership
interest in a Rule 144A Global Certificate, all as contemplated by Section
5.12(a)(ii)). Following the termination of the 40 day distribution compliance
period, beneficial interests in the Regulation S Temporary Global Certificates
shall be exchanged for beneficial interests in permanent Global Certificates
(the "Regulation S Permanent Global
87
Certificates"), which will be deposited with the Trustee, as custodian, and
registered in the name of a nominee of the Depository. Simultaneously with the
authentication of the Regulation S Permanent Global Certificates, the Trustee
shall cancel the Regulation S Temporary Global Certificates. The aggregate
principal amount of the Regulation S Temporary Global Certificates and the
Regulation S Permanent Global Certificates may from time to time be increased or
decreased by adjustments made on the records of the Certificate Registrar and
the Depository or its nominee, as the case may be, in connection with transfers
of interest as hereinafter provided.
Each Global Certificate shall represent such of the outstanding
Book-Entry Certificates as shall be specified therein and each shall provide
that it shall represent the aggregate amount of outstanding Book-Entry
Certificates from time to time endorsed thereon and that the aggregate amount of
outstanding Book-Entry Certificates represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Certificate to reflect the amount of any increase or
decrease in the amount of outstanding Book-Entry Certificates represented
thereby shall be made by the Trustee, or by the custodian at the direction of
the Trustee, in accordance with instructions given by the holder thereof as
required by Section 5.12.
Except as set forth in Section 5.12, the Global Certificates may be
transferred, in whole and not in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee.
(f) None of the Trustee, the Certificate Administrator, the Certificate
Registrar or the Paying Agent shall have any liability to the Trust Fund arising
from a registration or transfer of a Certificate in reliance upon a
certification, Officer's Certificate, affidavit, ruling or Opinion of Counsel
described in this Section 5.1.
Section 5.2 CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF PRINCIPAL
AND INTEREST; AUTHORIZED DENOMINATIONS. The aggregate principal amount of
Certificates that may be authenticated and delivered under this Agreement is
limited to the aggregate Principal Balance of the Loans as of the Cut-Off Date,
as specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 5.3. Such
aggregate principal amount shall be allocated among one or more Classes having
designations, types of interests, initial per annum Remittance Rates, initial
Class Principal Balances and last scheduled Distribution Dates as specified in
the Preliminary Statement to this Agreement. The aggregate Percentage Interest
of each Class of Certificates of which the Class Principal Balance equals zero
as of the Cut-Off Date that may be authenticated and delivered under this
Agreement is limited to 100%. Certificates shall be issued in Authorized
Denominations.
Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. The
Trustee shall cause to be maintained at one of its offices or at its designated
Certificate Registrar, a Certificate Register in which there shall be recorded
the name and address of each Certificateholder. Subject to such reasonable rules
and regulations as the Trustee may prescribe, the Certificate Register shall be
amended from time to time by the Trustee or its agent to reflect notice of any
changes received
88
by the Trustee or its agent pursuant to Section 10.5. The Trustee hereby
appoints LaSalle Bank National Association as the initial Certificate Registrar.
The Trustee may appoint an Eligible Institution to act as its agent in order to
delegate to such Eligible Institution its duties as Certificate Registrar under
this Agreement.
Upon surrender for registration of transfer of any Certificate to the
Trustee at the office of First Trust of New York, National Association, 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.
All Certificates surrendered for exchange or transfer shall be canceled
by the Trustee or any Authenticating Agent.
Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i)
any mutilated Certificate is surrendered to the Trustee or any Authenticating
Agent, or (ii) the Trustee or any Authenticating Agent receives evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
there is delivered to the Trustee or any Authenticating Agent such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or any Authenticating Agent that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Trustee or any Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Percentage Interest. Upon the
issuance of any new Certificate under this Section 5.4, the Trustee or any
Authenticating Agent may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee or any
Authenticating Agent) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.4 shall constitute complete and indefeasible evidence
of ownership in the Trust Fund, as if originally issued, whether or not the lost
or stolen Certificate shall be found at any time.
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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.
Section 5.7 BOOK-ENTRY FOR BOOK-ENTRY CERTIFICATES. (a) 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. Additionally,
the Trustee (or any duly appointed Authenticating Agent) shall execute,
authenticate and deliver the Rule 144A Global Certificates and the Regulation S
Permanent Global Certificates which (i) shall be registered in the name of the
Depository or the nominee of the Depository and (ii) shall be delivered by the
Trustee (or its designated Certificate Registrar) to the Depository or pursuant
to the Depository's instructions or held by the Trustee as custodian for the
Depository. The Trustee (or any Authenticating Agent) shall execute,
authenticate and deliver the Regulation S Temporary Global Certificates in
accordance with Section 5.1(e). 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:
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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 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.
(b) The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Clearstream, Luxembourg shall
be applicable to interests in the Regulation S Temporary Global Certificates and
the Regulation S Permanent Global Certificates that are held by the Agent
Members through Euroclear or Clearstream, Luxembourg. The procedures described
in
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this paragraph, to the extent relating to actions to be taken with respect to
any Global Certificate shall be the "Applicable Procedures" for such actions.
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. Except as provided in this Section
5.9 and in Section 5.12(d), owners of beneficial interests in Global
Certificates will not be entitled to receive 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 [RESERVED].
Section 5.11 [RESERVED].
Section 5.12 TRANSFER RESTRICTIONS.
(a) TRANSFER AND EXCHANGE OF GLOBAL CERTIFICATES. The transfer and
exchange of Global Certificates or beneficial interests therein shall be
effected through the Depository, in accordance
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with this Pooling and Servicing Agreement and the procedures of the Depository
therefor, which shall include restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Beneficial interests
in a Global Certificate may be transferred to persons who take delivery thereof
in the form of a beneficial interest in the same Global Certificate in
accordance with the transfer restrictions set forth in the legend referred to in
Section 5.13. Transfers of beneficial interests in the Global Certificates to
persons required or permitted to take delivery thereof in the form of an
interest in another Global Certificate shall be permitted as follows:
(i) RULE 144A GLOBAL CERTIFICATE TO REGULATION S GLOBAL
CERTIFICATE. If, at any time, an Owner of a beneficial interest in a
Rule 144A Global Certificate deposited with the Depository (or the
Trustee as custodian for the Depository) wishes to transfer its interest
in such Rule 144A Global Certificate to a person who is required or
permitted to take delivery thereof in the form of a beneficial interest
in a Regulation S Global Certificate, such Owner shall, subject to
compliance with the procedures described in the next sentence of this
Section 5.12(a)(i), exchange or cause the exchange of such beneficial
interest for an equivalent beneficial interest in a Regulation S Global
Certificate. Upon receipt by the Trustee of (1) instructions given in
accordance with the Applicable Procedures from an Agent Member directing
the Trustee to credit or cause to be credited a beneficial interest in
the Regulation S Global Certificate in an amount equal to the beneficial
interest in the Rule 144A Global Certificate to be exchanged, (2) a
written order given in accordance with the Applicable Procedures
containing information regarding the participant account of the
Depository and the Euroclear Operator or Clearstream, Luxembourg account
to be credited with such increase, and (3) a certificate in the form of
Exhibit F given by the transferring Owner stating that the transfer of
such interest has been made in compliance with the transfer restrictions
applicable to the Global Certificates and pursuant to and in accordance
with Rule 903 or Rule 904 of Regulation S, then the Trustee, as
Certificate Registrar, shall instruct the Depository to reduce or cause
to be reduced the outstanding principal amount of the applicable Rule
144A Global Certificate and to increase or cause to be increased the
outstanding principal amount of the applicable Regulation S Global
Certificate by the outstanding principal amount of the beneficial
interest in the Rule 144A Global Certificate to be exchanged, to credit
or cause to be credited to the account of the person specified in such
instructions a beneficial interest in the Regulation S Global
Certificate equal to the reduction in the outstanding principal amount
of the Rule 144A Global Certificate, and to debit, or cause to be
debited, from the account of the person making such exchange or transfer
the beneficial interest in the Rule 144A Global Certificate that is
being exchanged or transferred.
(ii) REGULATION S GLOBAL CERTIFICATE TO RULE 144A GLOBAL
CERTIFICATE. If, at any time an Owner of a beneficial interest in a
Regulation S Global Certificate deposited with the Depository or with
the Trustee, as custodian for the Depository, wishes to transfer its
interest in such Regulation S Global Certificate to a person who is
required or permitted to take delivery thereof in the form of a
beneficial interest in a Rule 144A Global Certificate, such Owner shall,
subject to the Applicable Procedures, exchange or cause the exchange of
such beneficial interest for an equivalent beneficial interest in a Rule
144A Global Certificate as provided in this Section 5.12(a)(ii). Upon
receipt by the Trustee of (1) instructions from the
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Euroclear Operator or Clearstream, Luxembourg, if applicable, and the
Depository directing the Trustee, as Certificate Registrar, to credit or
cause to be credited a beneficial interest in the Rule 144A Global
Certificate equal to the beneficial interest in the Regulation S Global
Certificate to be exchanged and containing information regarding the
participant account with the Depository to be credited with such
increase, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the participant account of
the Depository and (3) if such transfer is being effected prior to the
expiration of the "40-day distribution compliance period" (as defined by
Regulation S), a certificate in the form of Exhibit G attached hereto
given by the Owner of such beneficial interest, then the Trustee, as
Certificate Registrar, shall instruct the Depository to reduce or cause
to be reduced the outstanding principal amount of such Regulation S
Global Certificate and to increase or cause to be increased the
outstanding principal amount of the applicable Rule 144A Global
Certificate by the outstanding principal amount of the beneficial
interest in the Regulation S Global Certificate to be exchanged, and the
Trustee, as Certificate Registrar, shall instruct the Depository,
concurrently with such reduction, to credit or cause to be credited to
the account of the person specified in such instructions a beneficial
interest in the applicable Rule 144A Global Certificate equal to the
reduction in the outstanding principal amount of such Regulation S
Global Certificate and to debit or cause to be debited from the account
of the person making such transfer the beneficial interest in the
Regulation S Global Certificate that is being transferred.
(b) TRANSFER AND EXCHANGE FROM DEFINITIVE CERTIFICATES TO DEFINITIVE
CERTIFICATES. If Definitive Certificates are presented by a Certificateholder to
the Trustee (or its designated Certificate Registrar) with a request to register
the transfer of Definitive Certificates in the form of other Definitive
Certificates, the Trustee (or its designated Certificate Registrar) shall
register the transfer or make the exchange as requested; PROVIDED, HOWEVER, that
the Certificateholder shall (x) satisfy the requirements of Section 5.3 and (y)
make the representations, acknowledgments and agreements listed in Section 5.14.
(c) TRANSFER AND EXCHANGE OF A DEFINITIVE CERTIFICATE FOR A BOOK-ENTRY
CERTIFICATE IN A RULE 144A GLOBAL CERTIFICATE OR A REGULATION S GLOBAL
CERTIFICATE. The transfer and exchange of a Definitive Certificate for a
beneficial interest in a Rule 144A Global Certificate or Regulation S Global
Certificate shall be effected in accordance with this Pooling and Servicing
Agreement and the procedures of the Depository therefor, which shall include
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. If, at any time a holder of a Definitive
Certificate wishes to transfer its interest in such Certificate to a person who
is required or permitted to take delivery thereof in the form of a beneficial
interest in a Rule 144A Global Certificate or Regulation S Global Certificate,
such Certificateholder shall, subject to the Applicable Procedures, exchange or
cause the exchange of such Definitive Certificate for an equivalent beneficial
interest in a Rule 144A Global Certificate or Regulation S Global Certificate as
provided in this Section. Upon receipt by the Trustee of (1) the Definitive
Certificates for registration of transfer or exchange duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Trustee duly executed by such Certificateholder or by his attorney, duly
authorized in writing, (2) the instructions from the Depository, directing the
Trustee, as Certificate Registrar, to credit or cause to be credited a
beneficial interest in the Rule 144A Global Certificate or
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Regulation S Global Certificate equal to the Definitive Certificate to be
exchanged, such instructions to contain information regarding the participant
account with the Depository to be credited with such increase, and (3) a written
order given in accordance with the Applicable Procedures containing information
regarding the participant account of the Depository, then the Trustee, as
Certificate Registrar, shall instruct the Depository to increase or cause to be
increased the outstanding principal amount of the applicable Rule 144A Global
Certificate or Regulation S Global Certificate by the outstanding principal
amount of the Definitive Certificate to be exchanged, and the Trustee, as
Certificate Registrar, shall instruct the Depository, concurrently with such
increase, to credit or cause to be credited to the account of the person
specified in such instructions a beneficial interest in the applicable Rule 144A
Global Certificate or Regulation S Global Certificate equal to the outstanding
principal amount of such Definitive Certificate being transferred.
Each transferee of any Definitive Certificate pursuant to this Section
shall be deemed to have made the representations and warranties listed in
Section 5.14 hereof.
(d) Transfer of a Book-Entry Certificate in a Rule 144A Global
Certificate or Regulation S Permanent Global Certificate for a Definitive
Certificate. Any person having a beneficial interest in a Rule 144A Global
Certificate or Regulation S Permanent Global Certificate may upon the
satisfaction of the requirements of Section 5.9 and subject to the Applicable
Procedures, exchange such beneficial interest for a Definitive Certificate. Upon
receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depository (or the Euroclear Operator or
Clearstream, Luxembourg, if applicable), from the Depository or its nominee on
behalf of any Person having a beneficial interest in a Rule 144A Global
Certificate or Regulation S Permanent Global Certificate, then the Trustee or
the custodian, at the direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the Depository and the
custodian, cause the outstanding principal amount of Rule 144A Global
Certificates or Regulation S Permanent Global Certificates, as applicable, to be
reduced accordingly and, following such reduction, the Trustee (or any duly
appointed Authenticating Agent) shall authenticate and deliver to the transferee
a Definitive Certificate in the appropriate principal amount.
Definitive Certificates issued in exchange for a Book-Entry Certificate
in a Rule 144A Global Certificate or Regulation S Permanent Global Certificate,
as applicable, pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee (or
its designated Certificate Registrar). The Trustee (or its designated
Certificate Registrar) shall deliver such Definitive Certificates to the persons
in whose names such Certificates are so registered. Following any such issuance
of Definitive Certificates, the Trustee (or its designated Certificate
Registrar) shall instruct the Depository to reduce or cause to be reduced the
outstanding principal amount of the applicable Global Certificate to reflect the
transfer.
(e) Restrictions on Transfer and Exchange of Global Certificates.
Notwithstanding any other provision of this Pooling and Servicing Agreement, a
Global Certificate may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee to
a successor Clearing Agency or a nominee of such successor Clearing Agency.
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Section 5.13 LEGENDING OF CERTIFICATES. (a) (i) each Global Certificate
and Definitive Certificate will bear a legend in substantially the following
form:
"THIS CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN AND IS NOT
EXPECTED TO BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED
STATES PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE OWNER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB")
AND IS ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND
NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT
FOR OTHERS, (WHICH OTHERS ARE ALSO QIBS) TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (B) IT HAS ACQUIRED THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IS OTHERWISE ACQUIRING THIS
CERTIFICATE IN A TRANSACTION EXEMPT FROM THE SECURITIES ACT,
IN WHICH CASE (A) HAS CERTIFIED TO THE TRUSTEE (OR ANY
CERTIFICATE REGISTRAR APPOINTED BY IT) IN WRITING THE FACTS
SURROUNDING SUCH TRANSFER, IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE (OR ANY SUCH CERTIFICATE
REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR AND (B) HAS
DELIVERED A WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND
THE DEPOSITOR TO THE EFFECT THAT ITS ACQUISITION WILL NOT
VIOLATE THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
CERTIFICATE EXCEPT (A) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN
AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR RULE 904 UNDER THE SECURITIES ACT, (C) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR (E) SUCH SALE, PLEDGE OR OTHER
TRANSFER IS OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE
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REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN WHICH
CASE (A) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED
BY IT) SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR
AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE, THE
SELLER, THE DEPOSITOR AND THE INITIAL PURCHASER IN WRITING
THE FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION
SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE
(OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE
DEPOSITOR, AND (B) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
APPOINTED BY IT) SHALL REQUIRE A WRITTEN OPINION OF COUNSEL
(WHICH SHALL NOT BE AT THE EXPENSE OF THE TRUSTEE)
SATISFACTORY TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
APPOINTED BY IT) AND THE DEPOSITOR TO THE EFFECT THAT SUCH
TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CERTIFICATE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND,
(4) ACKNOWLEDGES THAT ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF
THE IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB
INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE
TREATED AS THE OWNER OF THIS CERTIFICATE FOR ALL PURPOSES.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE POOLING AND SERVICING AGREEMENT UNDER
WHICH THIS CERTIFICATE WAS ISSUED CONTAINS A PROVISION REQUIRING
THE TRUSTEE (OR CERTIFICATE REGISTRAR APPOINTED BY THE TRUSTEE) TO
REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF
THE FOREGOING."
(ii) each Global Certificate will bear a legend in substantially
the following form:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE, AS DEFINED HEREIN, OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED
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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."
(iii) each Regulation S Temporary Global Certificate will bear a
legend in substantially the following form:
"THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE IS A "TEMPORARY
GLOBAL CERTIFICATE" FOR PURPOSES OF REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
WHICH IS EXCHANGEABLE FOR A PERMANENT GLOBAL CERTIFICATE SUBJECT TO
THE TERMS AND CONDITIONS SET FORTH HEREIN."
(iv) each Regulation S Permanent Global Certificate will bear a
legend in substantially the following form:
"THIS REGULATION S PERMANENT GLOBAL CERTIFICATE IS A GLOBAL
CERTIFICATE WHICH IS EXCHANGEABLE FOR INTERESTS IN OTHER GLOBAL
CERTIFICATES AND DEFINITIVE CERTIFICATES SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT (AS DEFINED HEREIN)."
(b) The Initial Purchaser shall not be required to deliver, and neither
the Trustee nor the Certificate Registrar shall demand therefrom, any of the
certifications described in Section 5.12 in connection with the initial issuance
of the Certificates and the delivery thereof by the Trustee (or its designated
Certificate Registrar) on the Closing Date.
Section 5.14 LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS.
(a) Each Owner of a Junior Subordinate Certificate, by its acceptance of
any beneficial interest therein, will be deemed to have acknowledged,
represented to and agreed with the Depositor, the Initial Purchaser and the
Trustee as follows:
(i) It understands and acknowledges that the Junior Subordinate
Certificates are being offered in transactions not involving a public
offering in the United States within the meaning of the Securities Act,
have not been registered under the Securities Act or any other
applicable securities laws, and may not be offered, sold or otherwise
transferred except in compliance with the registration requirements of
the Securities Act or any other applicable securities law, pursuant to
an exemption therefrom or in a transaction not subject thereto, and in
compliance with the applicable requirements of the Pooling and Servicing
Agreement.
(ii) It acknowledges that none of the Servicer, the Depositor, the
Trustee, the Certificate Registrar or the Initial Purchaser nor any
person representing the Servicer, the
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Depositor, the Trustee, the Certificate Registrar or the Initial
Purchaser has made any representation to it with respect to the
Servicer, the Depositor, any affiliate thereof, the Trust or the
offering or sale of any Junior Subordinate Certificates, other than the
information contained in the Private Placement Memorandum, which Private
Placement Memorandum has been delivered to it and upon which it is
solely relying in making its investment decision with respect to the
Junior Subordinate Certificates; accordingly, it acknowledges that no
representation or warranty is made by the Servicer, the Depositor, the
Trustee, the Certificate Registrar or the Initial Purchaser, or any
affiliate thereof, as to the accuracy or completeness of such materials;
and it has had access to such financial and other information concerning
the Servicer, the Depositor, any affiliate thereof, the Trust and the
Junior Subordinate Certificates as it has deemed necessary in connection
with its decision to purchase any of the Junior Subordinate
Certificates, including an opportunity to ask questions of and request
information from the Servicer, the Depositor, the Trustee and the
Initial Purchaser. It acknowledges that the delivery of the Private
Placement Memorandum at any time does not imply that information therein
is correct as of any time subsequent to its date.
(iii) It (A)(i) is a QIB, (ii) is aware that the sale to it is
being made in reliance on Rule 144A and (iii) is acquiring such
Certificates for its own account or for the account of a QIB, (B) is not
a U.S. person and is purchasing such Certificates in an offshore
transaction pursuant to Regulation S, or (C) is otherwise acquiring such
Certificates in a transaction exempt from the Securities Act, in which
case, (a) it has certified to the Trustee (or any Certificate Registrar
appointed by it) in writing the facts surrounding such transfer, in form
and substance satisfactory to the Trustee (or any such Certificate
Registrar appointed by it) and the Depositor and (b) it has delivered a
written opinion of counsel satisfactory to the Trustee (or any
Certificate Registrar appointed by it) and the Depositor to the effect
that its acquisition will not violate the Securities Act.
(iv) No sale, pledge or other transfer of any Certificate may be
made by any person except:
(A) in the United States, to a person whom the seller
reasonably believes after due inquiry is a QIB acting for
its own account (and not for the account of others) or as a
fiduciary or agent for others (which others are QIBs to whom
notice is given that the sale, pledge or other transfer is
made) in a transaction meeting the requirements of Rule 144A
of the Securities Act ("Rule 144A");
(B) in an offshore transaction complying with Rule 903 or
Rule 904 of Regulation S under the Securities Act
("Regulation S");
(C) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 under the Securities Act
(if available);
(D) pursuant to an effective registration statement under
the Securities Act; or
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(E) in reliance on another exemption from the
registration requirements of the Securities Act and subject
to the receipt by the Trustee (or certificate registrar
appointed by the Trustee) and the Depositor of (A) a
certification of the prospective transferor and the
prospective transferee certifying in writing the facts
surrounding such transfer, in form satisfactory to the
Trustee (or any Certificate Registrar appointed by the
Trustee) and the Depositor and (B) a written opinion of
counsel, satisfactory to the Trustee (or any Certificate
Registrar appointed by the Trustee) and the Depositor, to
the effect that such transfer will not violate the
Securities Act;
and, in each case, in accordance with the requirements (including, without
limitation, any certification required to be delivered) of this Agreement and
all applicable United States state securities laws. The purchaser will, and each
subsequent holder is required to, notify any subsequent purchaser from it of the
resale restrictions set forth in the preceding sentence.
(v) The Certificates will bear the following legends, unless the
Depositor determines otherwise in accordance with applicable law:
"THIS CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN AND IS NOT
EXPECTED TO BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED
STATES PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE OWNER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB")
AND IS ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND
NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT
FOR OTHERS, (WHICH OTHERS ARE ALSO QIBS) TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (B) IT HAS ACQUIRED THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IS OTHERWISE ACQUIRING THIS
CERTIFICATE IN A TRANSACTION EXEMPT FROM THE SECURITIES ACT,
IN WHICH CASE, (A) HAS CERTIFIED TO THE TRUSTEE (OR ANY
CERTIFICATE REGISTRAR APPOINTED BY IT) IN WRITING THE FACTS
SURROUNDING SUCH TRANSFER, IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE (OR ANY SUCH CERTIFICATE
REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR AND (B) HAS
DELIVERED A WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND
THE DEPOSITOR TO THE
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EFFECT THAT ITS ACQUISITION WILL NOT VIOLATE THE
SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
CERTIFICATE EXCEPT (A) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN
AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR RULE 904 UNDER THE SECURITIES ACT, (C) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR (E) SUCH SALE, PLEDGE OR OTHER
TRANSFER IS OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN WHICH
CASE (A) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED
BY IT) SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR
AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE, THE
SELLER, THE DEPOSITOR AND THE INITIAL PURCHASER IN WRITING
THE FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION
SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE
(OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE
DEPOSITOR, AND (B) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
APPOINTED BY IT) SHALL REQUIRE A WRITTEN OPINION OF COUNSEL
(WHICH SHALL NOT BE AT THE EXPENSE OF THE TRUSTEE)
SATISFACTORY TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
APPOINTED BY IT) AND THE DEPOSITOR TO THE EFFECT THAT SUCH
TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CERTIFICATE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND,
(4) ACKNOWLEDGES THAT ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF
THE IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB
INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE
TREATED AS THE OWNER OF THIS CERTIFICATE FOR ALL PURPOSES.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE POOLING AND
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SERVICING AGREEMENT UNDER WHICH THIS CERTIFICATE WAS ISSUED
CONTAINS A PROVISION REQUIRING THE TRUSTEE (OR CERTIFICATE
REGISTRAR APPOINTED BY THE TRUSTEE) TO REFUSE TO REGISTER ANY
TRANSFER OF THIS OFFERED CERTIFICATE IN VIOLATION OF THE
FOREGOING."
(B) Each Global Certificate will bear a legend in substantially the
following form:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE, AS DEFINED HEREIN, OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN."
(C) each Regulation S Temporary Global Certificate will bear a
legend in substantially the following form:
"THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE IS A "TEMPORARY
GLOBAL CERTIFICATE" FOR PURPOSES OF REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
WHICH IS EXCHANGEABLE FOR A PERMANENT GLOBAL CERTIFICATE SUBJECT TO
THE TERMS AND CONDITIONS SET FORTH HEREIN."
(D) each Regulation S Permanent Global Certificate will bear a
legend in substantially the following form:
"THIS REGULATION S PERMANENT GLOBAL CERTIFICATE IS A GLOBAL
CERTIFICATE WHICH IS EXCHANGEABLE FOR INTERESTS IN OTHER GLOBAL
CERTIFICATES AND DEFINITIVE CERTIFICATES SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT (AS DEFINED HEREIN)."
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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, that the Servicer may in its discretion undertake any such action which
it may deem necessary or desirable
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in respect of this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Servicer shall be
entitled to be reimbursed therefor out of the Custodial Account for P&I as
provided by Section 3.3.
Section 6.4 SERVICER NOT TO RESIGN. The Servicer shall not resign from
the obligations and duties hereby imposed on it, except upon determination that
its duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it, the other activities of the Servicer so causing such a conflict being
of a type and nature carried on by the Servicer at the date of this Agreement.
Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. The
Servicer shall notify each Rating Agency of any such resignation. No such
resignation shall become effective until a successor servicer shall have assumed
the Servicer's responsibilities and obligations in accordance with Section 7.5
hereof.
Notwithstanding the limitations stated above, the Servicer may transfer
its obligations, duties and rights hereunder without the consent of the
Certificateholders, PROVIDED, that (i) the Servicer obtains the prior written
consent of each Rating Agency, (ii) the transferee is a FNMA- or FHLMC- approved
servicer having a net worth of not less than $15,000,000, (iii) the successor
servicer assumes all of the Servicer's responsibilities and obligations in
accordance with Section 7.5 hereof, and (iv) the then-current rating of the
Class A Certificates will not be reduced as a result of such transfer, and (v)
the successor servicer has, in the reasonable opinion of the Trustee, the
qualifications, resources and experience to properly carry out, observe and
perform the duties, obligations and responsibilities of Servicer hereunder;
PROVIDED, that the foregoing clause (v) is intended solely for the benefit of
(and may be exercised or waived at the sole discretion of) the Trustee, to
enable the Trustee to assure itself that any successor Servicer has such
acceptable qualifications, resources and experience, and such clause (v) is not
intended to be for the benefit of, and shall not be relied upon or enforced by,
any Certificateholder, and PROVIDED, FURTHER, that any consent to such transfer
will not be unreasonably withheld by the Trustee.
ARTICLE VII
DEFAULT
Section 7.1 EVENTS OF DEFAULT. In case one or more of the following
Events of Default by the Servicer shall occur and be continuing, that is to say:
(i) any failure by the Servicer to distribute or cause to be
distributed to the Trustee or its delegate on the Withdrawal Date any
payment required to be made to the Trustee under the terms of this
Agreement;
(ii) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements
on the part of the Servicer in the
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Certificates or in this Agreement which continues unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Certificates evidencing, in aggregate, not less than 25% of
the Trust Fund or 51% of the aggregate Percentage Interests of any Class
of Certificates;
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days;
(iv) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator or liquidating committee in any insolvency,
readjustment of debt marshaling of assets and liabilities, voluntary
liquidation or similar proceedings of or relating to the Servicer or of
or relating to all or substantially all of its property;
(v) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(vi) any failure of the Servicer to make any Advance required to be
made from its own funds pursuant to Section 4.3 which continues
unremedied for a period of one Business Day after the date upon which
such Advance was to have been made;
then, if an Event of Default described in clauses (i)-(v) of this Section 7.1
shall occur, and in each and every such case, subject to applicable law, so long
as an Event of Default shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing, in aggregate, not less than 25% of the Trust
Fund or 51% of the aggregate Percentage Interests of any Class of Certificates
by notice in writing to the Servicer (and to the Trustee if given by the
Certificateholders) may terminate all of the rights and obligations of the
Servicer under this Agreement, but without prejudice to any rights it may have
to reimbursement of expenses, Advances and other advances of its own funds as
Servicer to the extent permitted by this Agreement, other than the Depositor's
(or its successors') obligation to repurchase any Loans pursuant to Section 2.2
or 2.3 shall survive any such termination. If an Event of Default described in
clause (vi) hereof shall occur, the Trustee shall, by notice in writing to the
Servicer, which shall be telecopied to the Servicer, immediately terminate all
of the rights and obligations of the Servicer, under this Agreement and in and
to the Loans and the proceeds thereof. On or after the receipt by the Servicer
of such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Certificates or the Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section
7.1 (subject to the provisions of Section 7.5); and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
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appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Loans and related
documents or otherwise at the expense of the Servicer. The Servicer agrees to
cooperate with the Trustee in effecting the termination of the Servicer's
responsibilities and rights hereunder and shall promptly provide the Trustee all
documents and records whether in written or electronic form reasonably requested
by it to enable it to assume the Servicer's functions hereunder and shall
promptly also transfer to the Trustee of this Agreement all amounts which then
have been or should have been deposited in the Custodial Account for P&I by the
Servicer or which are thereafter received with respect to the Loans as well as
any escrowed funds held by it or in connection with its servicing activities
hereunder. The Servicer and the Trustee shall give each Rating Agency notice of
any Event of Default.
Section 7.2 OTHER REMEDIES OF TRUSTEE. During the continuance of any
Event of Default, so long as such Event of Default shall not have been remedied,
the Trustee, in addition to the rights specified in Section 7.1, shall have the
right, in its own name as trustee of an express trust, to take all actions now
or hereafter existing at law, in equity or by statute to enforce its rights and
remedies, and to protect the interests, and enforce the rights and remedies, of
the Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filing of proofs of claim
and debt in connection therewith). Except as otherwise expressly provided in
this Agreement, no remedy provided for by this Agreement shall be exclusive of
any other remedy, and each and every remedy shall be cumulative and in addition
to any other remedy and no delay or omission to exercise any right or remedy
shall impair any such right or remedy or shall be deemed to be a waiver of any
Event of Default.
Section 7.3 DIRECTIONS BY CERTIFICATEHOLDERS AND DUTIES OF TRUSTEE
DURING EVENT OF DEFAULT. During the continuance of any Event of Default, Holders
of Certificates evidencing, in aggregate, not less than 25% of the Trust Fund or
51% of the aggregate Percentage Interests of any Class of Certificates may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement; PROVIDED, HOWEVER, that the Trustee shall be under
no obligation to pursue any such remedy, or to exercise any of the trusts or
powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of the Servicer or any successor
servicer from its rights and duties as servicer hereunder) at the request, order
or direction of any of the Certificateholders, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby; and,
PROVIDED, FURTHER, that, subject to the provisions of Section 8.1, the Trustee
shall have the right to decline to follow any such direction if the Trustee, in
accordance with an Opinion of Counsel, determines that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good faith determines
that the action or proceeding so directed would involve it in personal liability
or be unjustly prejudicial to the non-assenting Certificateholders or if the
Trustee has received contrary directions pursuant to this Section 7.3.
Section 7.4 ACTION UPON CERTAIN FAILURES OF SERVICER AND UPON EVENT OF
DEFAULT. In the event that the Trustee shall have knowledge of any failure of
the Servicer specified in Section 7.1(i) or (ii) which would become an Event of
Default upon the Servicer's failure to remedy the same after
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notice, the Trustee shall give notice thereof to the Servicer. In the event that
the Trustee shall have knowledge of an Event of Default, the Trustee shall give
prompt written notice thereof to the Certificateholders and to each Rating
Agency. For all purposes of this Agreement, in the absence of actual knowledge
by a Responsible Officer of the Trustee, the Trustee shall not be deemed to have
knowledge of any failure of the Servicer as specified in Section 7.1(i) and (ii)
or any Event of Default unless notified thereof in writing by the Servicer or by
a Certificateholder.
Section 7.5 APPOINTMENT OF SUCCESSOR SERVICER.
(a) When the Servicer receives a notice of termination pursuant to
Section 7.1 or the Trustee receives the resignation of the Servicer evidenced by
an Opinion of Counsel pursuant to Section 6.4, the Trustee shall become the
successor in all respects to the Servicer in its capacity as Servicer under this
Agreement and the transactions set forth or provided for herein, PROVIDED,
HOWEVER, that the Trustee's obligation to make any Advances shall be no greater
than set forth in Section 4.3 of this Agreement, and the Trustee shall have all
the rights and powers and be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and in its capacity as such successor shall have the same limitation of
liability herein granted to the Servicer and PROVIDED, FURTHER, that the Trustee
shall not be required to make an Advance from its own funds if such Advance
would be prohibited by law. As compensation therefor, the Trustee shall be
entitled to receive monthly an amount not to exceed the Servicing Fee as agreed
by the Trustee and the Servicer, together with such other servicing compensation
in the form of assumption fees, late charges, prepayment fees or otherwise
provided in Section 3.9. If the agreed amount is less than the Servicing Fee,
the excess shall be paid to the Class R Certificateholder. If the Trustee and
the Servicer shall not agree on the amount of such compensation, the Trustee
shall solicit bids for a successor servicer as described in Section 7.5(b),
PROVIDED, HOWEVER, if no successor servicer is obtained through the bidding
process, the Trustee may act as such, or may pursuant to Section 7.5(b) appoint
a successor servicer to act as such, for the Servicing Fee together with such
other servicing compensation as provided in Section 3.9. In no event shall the
Trustee's assumption of or succession to the obligations of the Servicer make
the Trustee liable for any actions or omissions of the Servicer in its capacity
as Servicer.
(b) Notwithstanding the above, the Trustee may and shall, if it is
unable (or unwilling due to disagreement on compensation as provided in Section
7.5 (a)) to act as Servicer, appoint, or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution,
bank or mortgage servicing institution which is an approved FNMA or FHLMC
servicer having a net worth of not less than $15,000,000 and meeting such other
standards as are set forth in Section 6.4 hereof for a successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder (except the repurchase obligations set
forth in Sections 2.2 and 2.3 hereof, which shall remain obligations of the
Depositor); PROVIDED, HOWEVER, that until such appointment and assumption, the
Trustee will continue to perform the servicing obligations pursuant to this
Agreement (and until such time shall be entitled to receive the Servicing Fees
pursuant to Section 3.9); PROVIDED, FURTHER, that prior to the appointment of
any successor servicer, the Rating Agencies confirm that the appointment of such
successor servicer would not result in the downgrade of the Rating assigned to
any Class of Certificates. The compensation of any successor servicer so
appointed shall be equal to the Servicing Fees specified
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in Section 3.9 together with such other compensation as is provided in said
Section 3.9. In the event the Trustee is required to solicit bids as provided
above, the Trustee shall solicit, by public announcement, bids from housing and
home finance institutions, banks and mortgage servicing institutions acceptable
to the Trustee and meeting the qualifications set forth above in this Section
7.5(b) for the purchase of the servicing functions. Such public announcement
shall specify that the successor servicer shall be entitled to the full amount
of the Servicing Fee on the aggregate unpaid principal balance of the Loans as
servicing compensation for servicing the Loans, together with the other
servicing compensation in the form of assumption fees, late payment charges,
prepayment fees or otherwise as provided in Section 3.9. Within 45 days after
any such public announcement, the Trustee shall negotiate and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
(except the repurchase obligations set forth in Sections 2.2 and 2.3 hereof,
which shall remain obligations of the Depositor) to the qualified party
submitting the highest qualifying bid. The Trustee shall deduct all costs and
expenses of any public announcement and of any sale, transfer and assignment of
the servicing rights and responsibilities hereunder from any sum received by the
Trustee from the successor to the Servicer in respect of such sale, transfer and
assignment. After such deductions, the remainder of such sum shall be paid by
the Trustee to the Class R Certificateholder at the time of such sale, transfer
and assignment to the Servicer's successor.
(c) The Servicer agrees to cooperate with the Trustee and any successor
servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Trustee or
such successor servicer, as applicable, all documents and records reasonably
requested by it to enable it to assume the Servicer's functions hereunder and
shall promptly also transfer to the Trustee or such successor servicer, as
applicable, all amounts which then have been or should have been deposited in
the Custodial Account for P&I by the Servicer or which are thereafter received
with respect to the Loans. Neither the Trustee nor any other successor servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof caused by
the failure of the Servicer to deliver, or any delay in delivering, cash,
documents or records to it.
Section 7.6 NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination of
the Servicer or appointment of a successor to the Servicer, in each case as
provided herein, the Trustee shall as soon as practicable give written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register and each Rating Agency.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 DUTIES OF TRUSTEE. The Trustee, prior to the occurrence of
an Event of Default and after the curing of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has
occurred (which has not been cured), the Trustee, subject to the provisions of
Sections 7.1, 7.3, 7.4 and 7.5, shall exercise such of the rights and powers
vested in it by this Agreement, and
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use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty.
Subject to Sections 8.2(i), 8.3 and 8.4, the Trustee, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Trustee which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement; PROVIDED,
HOWEVER, that the Trustee shall not be responsible for the accuracy or content
of any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by any party hereunder. If any such instrument is
found not to conform to the requirements of this Agreement in a material manner,
the Trustee shall take action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's reasonable
satisfaction, the Trustee will provide notice thereof to the Certificateholders
and each Rating Agency.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct or in the event the Trustee is acting as successor
servicer pursuant to Section 7.5, to the standard imposed on the Servicer
pursuant to Section 6.3 of this Agreement; PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with this Agreement or at the direction of Certificateholders
holding Certificates which have an aggregate Certificate Principal
Balance aggregating not less than 25% of the aggregate Certificate
Principal Balance of all Certificates relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising or omitting to exercise any trust or power
conferred upon the Trustee, under this Agreement;
(iii) The Trustee shall not be liable in its individual capacity
for any error of judgment made in good faith by any Responsible Officer,
unless it shall be proved that the Trustee or such Responsible Officer
was negligent in ascertaining the pertinent facts;
(iv) The Trustee shall not be liable for any act or omission of the
Depositor or the Servicer (except for its own acts or omissions as
Servicer hereunder) or for any but its own acts or omissions;
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(v) The Trustee shall not be deemed to take notice or be deemed to
have knowledge of any matter, including without limitation any default
or Event of Default, unless written notice thereof, referring to the
Certificates, the Depositor, the Trust Fund or this Agreement is
received by a Responsible Officer of the Trustee at its Corporate Trust
Office; and
(vi) Subject to the other provisions of this Agreement and without
limiting the generality of this Section 8.1, the Trustee shall have no
duty (A) to see to any recording, filing, or depositing of this
Agreement or any agreement referred to herein or any financing statement
or continuation statement evidencing a security interest, or to see to
the maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to see any
insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of
any kind owing with respect to, assessed or levied against, any part of
the Trust Fund other than from funds available in the Certificate
Account, and (D) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee pursuant to this
Agreement believed by the Trustee to be genuine and to have been signed
or presented by the proper party or parties.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties as Trustee hereunder or in the exercise
of any of its rights or powers if there is reasonable ground for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
Section 8.2 CERTAIN MATTERS AFFECTING TRUSTEE. Except as otherwise
provided in Section 8.1:
(i) Before acting or refraining from acting the Trustee may request
or require an Officer's Certificate; the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, opinion of counsel, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) The Trustee may consult with counsel, and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
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(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 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
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financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement.
Neither the Trustee nor any of the directors, officers, employees or
agents of the Trustee shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment while
an Event of Default exists; PROVIDED, HOWEVER, that this provision shall not
protect the Trustee or any such person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties. The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Depositor and held harmless
against any loss, liability or expense, including reasonable attorneys' fees,
incurred in connection with or related to the Trustee's performance of its
powers and duties under this Agreement (including, without limitation,
performance under Section 8.1 hereof), or any action relating to this Agreement
or the Certificates, or the performance of the Trustee's duties hereunder, other
than any loss, liability or expense incurred by any such Person by reason of
willful misfeasance, bad faith or negligence in the performance of duties. Any
such losses, liabilities and expenses resulting therefrom shall be losses,
liabilities and expenses of the Depositor. The indemnification provided
hereunder shall survive termination of this Agreement.
Section 8.5 TRUSTEE MAY OWN CERTIFICATES. The Trustee and any Affiliate
or agent of the Trustee in its individual or any other capacity may become the
owner of or a pledgee of the Certificates with the same rights it would have if
it were not Trustee or such agent, and may otherwise deal with the parties
hereto.
Section 8.6 SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES. The Servicer
covenants and agrees to pay to the Trustee monthly (or as otherwise agreed), and
the Trustee shall be entitled to receive, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Servicer shall pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances, including reasonable attorneys' fees, incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The Tax
Matters Person (or Person acting as its attorney-in-fact or agent) shall
indemnify the Trustee for any liability of or assessment against the Trustee
resulting from any error in any tax or tax information returns prepared or
caused to be prepared by such Person. In the event that (i) the Servicer does
not pay to the Trustee any compensation owed to the Trustee pursuant to this
Agreement or (ii) the Trustee is not reimbursed for any expense, disbursement or
advance incurred or made by the Trustee pursuant to this Agreement, the Trustee
shall be entitled to withdraw and retain such amount from the Certificate
Account. In the event the Trustee incurs expenses or renders services in any
proceedings which result from an Event of Default under Section 7.1, subsections
(iii), (iv) or (v) of this Agreement, or from any default which, with the
passage of time, would become an Event of Default, the expenses so incurred and
compensation for services so
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rendered are intended to constitute expenses of administration under the United
States Bankruptcy Code or equivalent law.
Section 8.7 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee hereunder
shall at all times be a corporation or association organized and doing business
under the laws of any state of the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. The Trustee shall not control the Servicer nor be a
parent of or a subsidiary of the Servicer. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.7 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.7, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.8.
Section 8.8 RESIGNATION AND REMOVAL OF TRUSTEE. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice of resignation to the Servicer. Such notice shall also be furnished to
each Rating Agency. Upon receiving such notice of resignation, the Servicer
shall promptly appoint a successor trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee at the expense of the
Servicer.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.7 and shall fail to resign after written request for
the Trustee's resignation by the Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then,
with or without cause, the Servicer may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
The Holders of Certificates having a Percentage Interest aggregating not
less than 51% of the aggregate Denomination of all Certificates may at any time
remove the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such holders or their attorneys-in-fact
duly authorized, one complete set of which instrument or instruments shall be
delivered to the Servicer, one complete set to the Trustee so removed and one
complete set to the successor trustee so appointed.
Any resignation or removal of the Trustee and appointment of successor
trustee pursuant to any of the provisions of this Section 8.8 shall become
effective only upon acceptance of appointment by the successor trustee as
provided in Section 8.9.
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Section 8.9 SUCCESSOR TRUSTEE. Any successor trustee appointed as
provided in Section 8.8 shall execute, acknowledge and deliver to the Servicer
and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective, and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as trustee herein. The predecessor trustee shall deliver or
cause to be delivered to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held by the Custodian, if it shall agree to become the agent of any
successor trustee hereunder), and the Servicer and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.9 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.7.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.9, the Servicer shall mail notice of the succession of such
trustee hereunder to all holders of Certificates at their addresses as shown in
the Certificate Register and to each Rating Agency. If the Servicer fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Servicer.
Section 8.10 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, PROVIDED, that such Person shall be eligible under the
provisions of Section 8.7, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co- trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.11, such powers, duties, obligations, rights and trusts as the Servicer and
the Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. Each co-trustee
separate trustee hereunder shall not be required to meet the terms of
eligibility as a successor trustee under Section 8.7 hereunder and no notice to
holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.9 hereof.
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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 trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
The Trustee may appoint one or more Eligible Institutions to act as its
agent or agents to perform any or all of its duties and obligations under this
Agreement. Each such agent shall be subject to all of the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee.
Section 8.12 APPOINTMENT OF CUSTODIANS. The Trustee may, with the
consent of the Servicer, appoint one or more Custodians, not affiliated with the
Depositor, to review, pursuant to Section 2.2 hereof, and hold all or a portion
of the Mortgage Files as agent for the Trustee PROVIDED, HOWEVER, that such
appointed Custodian may be LaSalle Bank National Association, Standard Federal
Bank, N.A. or ABN AMRO Mortgage Group, Inc. Any Custodian appointed shall be (i)
ABN AMRO Mortgage Group, Inc., (ii) Standard Federal Bank, N.A., (iii) LaSalle
Bank National Association or (iv) (a) an institution subject to supervision by
federal or state authority, (b) shall have combined capital and surplus of at
least $50,000,000 and (c) shall be qualified to do business in the jurisdiction
in which it holds any Mortgage File.
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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 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.
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Section 8.15 REPORTS TO SECURITIES AND EXCHANGE COMMISSION. Unless
otherwise directed by the Depositor in writing, the Certificate Administrator or
the Trustee, as applicable, shall prepare, sign and file with the Securities and
Exchange Commission, on behalf of the Depositor, (i) no later than ten days
after each Distribution Date, the Certificateholders' Report on the appropriate
form and in the appropriate medium authorized or prescribed therefor under the
Exchange Act, (ii) no later than March 25 of each calendar year, an annual
report meeting the requirements of the Exchange Act on the appropriate form and
in the appropriate medium authorized or prescribed therefor under the Exchange
Act. The Trustee or the Certificate Administrator, as applicable, shall promptly
forward copies of all filings made pursuant to this Section 8.15 to the
Depositor.
ARTICLE IX
TERMINATION
Section 9.1 TERMINATION UPON PURCHASE BY THE SERVICER 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 Servicer of
all Loans at a price equal to the sum of (a) the principal balance of each Loan
plus accrued interest thereon at the applicable Mortgage Interest Rate to the
next scheduled Installment Due Date and (b) the fair market value of all
acquired property in respect of Loans, such fair market value to be determined
by an appraiser selected by the Trustee; PROVIDED, HOWEVER, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of 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,
REMIC II, REMIC III and REMIC IV 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 Servicer 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 5% of the aggregate Principal Balance of the
Loans on the Cut-off Date, after deduction of payments due on or before such
date.
Notice of any termination pursuant to clause (i), (ii) or (iii) above,
specifying the Distribution Date upon which all Certificateholders may surrender
their Certificates to the Trustee or its agent for payment and cancellation,
shall be given promptly by the Trustee or its agent (upon direction by the
Servicer no less than 10 days prior to the date such notice is to be mailed) by
letter to Certificateholders and each Rating Agency mailed by first class mail
no later than the 25th day of the month preceding the month of such final
distribution specifying (i) the Distribution Date upon which final payment on
the Certificates will be made upon presentation and surrender of Certificates at
the office or agency of the Trustee or the Certificate Registrar therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Distribution
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Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office or agency of the Trustee or the Certificate
Registrar therein specified. The Trustee or its agent shall give such notice to
the Certificate Registrar and each Rating Agency at the time such notice is
given to the Certificateholders. Upon any such termination, the duties of the
Certificate Registrar shall also terminate. In the event such notice is given in
connection with Depositor's election to purchase, the Depositor shall deposit in
the Certificate Account on the related Withdrawal Date an amount equal to the
above-described purchase price and upon such deposit Certificateholders will be
entitled to the amount of such purchase price but not amounts in excess thereof,
all as provided herein. With respect to the Certificates, upon presentation and
surrender of the Certificates pursuant to any termination under this Section
9.1, the Trustee or Paying Agent shall cause to be distributed to
Certificateholders an amount equal to (a) the amount otherwise distributable on
such Distribution Date, if not in connection with a purchase; or (b) if the
Depositor elected to so purchase, the purchase price calculated as above
provided. Upon any termination pursuant to clause (iii) above, or upon
certification to the Trustee by a Servicing Officer following such final
deposit, the Trustee and any Custodian shall promptly release to the Servicer
the Mortgage Files for the remaining Loans, and the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within three months after the time specified
in the above-mentioned written notice, the Trustee or its agent shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within three months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Trustee or its agent shall
take appropriate and reasonable steps as directed by the Servicer, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets which remain in
trust hereunder.
Section 9.2 TRUSTS IRREVOCABLE. Except as expressly provided herein, all
trusts created hereby are irrevocable.
Section 9.3 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event the Depositor exercises its purchase option as provided
in Section 9.1, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee and the Certificate
Administrator have received an Opinion of Counsel to the effect that the failure
of the Trust Fund to comply with the requirements of this Section 9.3 will not
(i) result in the imposition of taxes on "prohibited transactions" of REMIC I,
REMIC II, REMIC III or REMIC IV of the Trust Fund as described in Section
860F(a)(2) of the Code, or (ii) cause either REMIC I, REMIC II, REMIC III or
REMIC IV 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, REMIC II, REMIC III and
REMIC IV of the Trust Fund; and
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(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, (b) to modify, eliminate or add to any provisions to such extent
as shall be necessary to maintain the qualification of the Trust Fund as a REMIC
at all times that any Class A or Subordinate Certificates are outstanding,
PROVIDED, that the Trustee has received an Opinion of Counsel to the effect that
such action is necessary or desirable to maintain such qualification, PROVIDED,
that such action under clauses (a) and (b) above shall not adversely affect in
any material respect the interests of any Certificateholder or (c) such
amendment is made to conform the terms of this Agreement to the terms described
in the Prospectus dated March 22, 2002, together with the Prospectus Supplement
dated May 22, 2002.
This Agreement may also be amended from time to time by the Depositor
and the Trustee with the consent of the Holders of Certificates evidencing, in
aggregate, not less than 50% of the Trust Fund for the purpose of adding any
provisions or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; PROVIDED, HOWEVER, that no such amendment shall (a) reduce in any
manner the amount of, or delay the timing of, payments received on Loans which
are required to be distributed in respect of any Certificate without the consent
of the Holder of such Certificate; (b) adversely affect in any material respect
the interest of the Holders of the Class A Certificates in a manner other than
as described in (a) above without the consent of the Holders of Class A
Certificates aggregating not less than 66-2/3% of the aggregate Percentage
Interest evidenced by all Class A Certificates; (c) adversely affect in any
material respect the interest of the Holders of the Subordinate Certificates in
a manner other than as described in clause (a) above without the consent of the
Holders of Subordinate Certificates aggregating not less than 66-2/3% of the
aggregate Percentage Interest evidenced by all Subordinate Certificates; (d)
adversely affect in any material respect the interest of the Class R
Certificateholder without the consent of the Holder of the Class R Certificate;
(e) change in any material respect the rights and obligations of the Servicer or
successor Servicer under this
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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 Certificates 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, REMIC II, REMIC III or REMIC IV of the Trust Fund to fail to
qualify as a REMIC at any time that any REMIC I Regular Interests, REMIC II
Regular Interests, REMIC III Regular Interests or REMIC IV Certificates are
outstanding.
As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of the Certificateholders
under this Section 10.1 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under this
Agreement.
Section 10.2 RECORDATION OF AGREEMENT. This Agreement (or an abstract
hereof, if acceptable by the applicable recording office) is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at its expense, but only after the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such
120
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 Certificateholder, shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless all of the
Holders of Certificates evidencing, in aggregate, not less than 25% of the Trust
Fund shall have made written request upon the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
60 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more holders of Certificates shall have any right in any manner whatever
by virtue or by availing of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 10.4 GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.5 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to ABN AMRO Mortgage Corporation, 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxx 000, 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 InterFirst, 000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxx Xxxxx,
Xxxxxxxx 00000, Attention: Xxxxx Xxxx - Vice President with a copy to ABN AMRO
Mortgage Group, Inc., 0000 Xxxx Xxx Xxxxxx Xxxx, Xxxx,
000
Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, 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 Moody's, to Xxxxx'x Investors Services, Inc., 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, Attention: Asset Backed Monitoring, or such other
address as may hereinafter be furnished to the Depositor in writing by Moody's
and (e) in the case of S&P, to Standard & Poor's, a division of The McGraw Hill
Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 10041- 0003,
Attention: Residential Mortgage Surveillance Department, or such other address
as may hereinafter be furnished to the Depositor in writing by S&P. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice mailed or transmitted within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the addressee receives such notice; PROVIDED, that any
demand, notice or communication to or upon the Depositor, the Servicer or the
Trustee shall not be effective until received.
Section 10.6 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
122
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/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: Vice President
S-1
JPMORGAN CHASE BANK,
as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Its: Trust Officer
S-2
ABN AMRO MORTGAGE GROUP, INC.,
as Servicer
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Its: Group Senior Vice President
S-3
STATE OF FLORIDA )
) ss.:
COUNTY OF ________________ )
On the 23rd day of May, 2002, before me, ______________________,
personally appeared Xxxxxx X. Xxxxxxx, a Vice President of ABN AMRO Mortgage
Corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument, and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal:
Signature_________________________
(SEAL)
X-0
XXXXX XX XXXXX )
) ss.:
COUNTY OF XXXXXX )
On the 23rd day of May, 2002, before me, __________________________,
personally appeared Xxxxx Xxxxxxx, known to me to be a Trust Officer of JPMorgan
Chase Bank, one of the institutions that executed the within instrument and also
known to me to be the person who executed it on behalf of said institution, and
acknowledged to me that such institution executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
---------------------------
Notary Public
[NOTARIAL SEAL]
S-5
STATE OF MICHIGAN )
) ss.:
COUNTY OF OAKLAND )
On the 23rd day of May, 2002, before me, Xxxxx Xxxxxxx, personally
appeared Xxxxxxx Xxxxx, known to me to be a Group Senior Vice President of ABN
AMRO Mortgage Group, Inc., one of the corporations that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________
Notary Public
[NOTARIAL SEAL]
S-6
EXHIBIT A
---------
FORMS OF CERTIFICATES
S-7
Exhibit A-1
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IA-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 May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable 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 2002-1A Portion of the Class IA-1
Principal Balance as of
the Cut-Off Date evidenced
by this Certificate:
$______________________
Class IA-1 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007 is 5.85% per annum, subject to
a maximum rate equal to the Adjusted Net WAC
for Loan Group I for the related distribution
date. Thereafter, the Class IA-1 Interest
Rate will be equal to the Net WAC for Loan
Group I for the related distribution date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IA-1 Principal Balance as of the Cut-Off Date: $______________________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP _____________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IA-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 May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable 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 2002-1A Portion of the Class IA-2
Principal Balance as of
the Cut-Off Date evidenced
by this Certificate:
$__________________
Class IA-2 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007 is 5.85% per annum, subject to
a maximum rate equal to the Adjusted Net WAC
for Loan Group I for the related distribution
date. Thereafter, the Class IA-2 Interest
Rate will be equal to the Net WAC for Loan
Group I for the related distribution date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IA-2 Principal Balance as of the Cut-Off Date: $______________________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP ______________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IA-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 May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable 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 2002-1A Portion of the
Class IA-3 Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate:
$________________
Class IA-3 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007 is 0.00% per annum. Thereafter,
the Class IA-3 Interest Rate will be equal to
the Net WAC for Loan Group I for the related
distribution date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IA-3 Principal Balance as of the Cut-Off Date: $_____________________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP ___________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IA-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 May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable 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 2002-1A Portion of the
Class IA-4 Notional Amount
as of the Cut-Off Date
evidenced by this
Certificate:
$__________________
Class IA-4 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007 is 5.85% per annum. Thereafter,
the Class IA-4 certificates will no longer be
entitled to distributions of any kind.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IA-4 Notional Amount as of the Cut-Off Date: $____________________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP ________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IIA-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 May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable 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 2002-1A Portion of the
Class IIA-1 Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate:
$______________
Class IIA-1 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2005 is 5.85% per annum, subject to
a maximum rate equal to the Adjusted Net WAC
for Loan Group II for the related
Distribution Date plus 0.50% per annum.
Thereafter, the Class IIA-1 Interest Rate
will be equal to the Net WAC for Loan Group
II for the related distribution date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IIA-1 Principal Balance as of the Cut-Off Date: $______________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP _____
MORTGAGE PASS-THROUGH CERTIFICATE
Class IIA-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 May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable 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 2002-1A Portion of the
Class IIA-2 Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate:
$_______________
Class IIA-2 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2005 is 4.25% per annum, subject to
a maximum rate equal to the Adjusted Net WAC
for Loan Group II for the related
Distribution Date minus 1.10% per annum.
Thereafter, the Class IIA-2 Interest Rate
will be equal to the Net WAC for Loan Group
II for the related distribution date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: [__________]
Class IIA-2 Principal Balance as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IIA-3
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended. The issue
date (the "Issue Date") of this Certificate is May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable rate as described below.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-1A Portion of the
Class IIA-3 Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate:$_____________
Class IIA-3 Remittance Rate: With respect to
each Interest Accrual Period through February
2005 is 5.35% per annum, subject to a maximum
rate equal to the Adjusted Net WAC for Loan
Group II for the related Distribution Date.
Thereafter, the Class IIA-3 Interest Rate
will be equal to the Net WAC for Loan Group
II for the related distribution date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IIA-3 Principal Balance as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IIA-4
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended. The issue
date (the "Issue Date") of this Certificate is May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable rate as described below.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-1A Portion of the
Class IIA-4 Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate:$_____________
Class IIA-4 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2005 is 0.00% per annum. Thereafter,
the Class IIA-4 Interest Rate will be equal
to the Net WAC for Loan Group II for the
related distribution date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IIA-4 Principal Balance as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
X-0-0
Xxxxxxx X-0
CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
Class IIA-5
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended. The issue
date (the "Issue Date") of this Certificate is May 23, 2002. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is an
adjustable rate as described below.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Series 2002-1A Portion of the
Class IIA-5 Notional
Amount as of the Cut-Off
Date evidenced by this
Certificate:$_____________
Class IIA-5 Remittance Rate: With respect to
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2005 is 5.35% per annum. Thereafter,
the Class IIA-5 certificates will not accrue
interest and will not be entitled to any
distributions related to subsequent Interest
Accrual Periods.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class IIA-5 Notional Amount as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
A-9-1
Exhibit A-10
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 May 23, 2002.
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.]
The Class M Certificates will be subordinate in right of payment to and provide
credit support to certain Classes of Certificates, as described in the Pooling
Agreement.
Series 2002-1A Portion of
the Class M
Principal Balance as
of the Cut-Off Date
evidenced by this
Certificate:
$_______________
Class M Remittance Rate: For any distribution date means the weighted average of
(A) for the portion of the Subordinate Certificates attributable to Group I and
(i) any Interest Accrual Period up to and including the Interest Accrual Period
in February 2007, an annual rate equal to 5.85% per annum, subject to a maximum
rate equal to the Adjusted New WAC for Loan Group I for the related distribution
date, and (ii) beginning with the Interest Accrual Period in March 2007, an
annual rate equal to Net WAC on the Group I Loans, and (B) for the portion of
the Subordinate Certificates attributable to Group II and any distribution date
(i) any Interest Accrual Period up to and including the Interest Accrual Period
in February 2005, an annual rate equal to 5.35% per annum, subject to a maximum
rate equal to the Adjusted New WAC for Loan Group II for the related
distribution date, and (ii) beginning with the Interest Accrual Period in March
2005, an annual rate equal to Net WAC on the Group II Loans; with the weighted
average of the rates under clauses (A) and (B) above being calculated in
proportion to the Group I Subordinate Amount and the Group II Subordinate
Amount, respectively.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class M Principal Balance as of the Cut-Off Date: $_______________
A-10-1
_______________________
Registered Owner Certificate No. _____
A-10-2
Exhibit A-11
CUSIP _______
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-1
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended. The issue
date (the "Issue Date") of this Certificate is May 23, 2002. 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.]
The Class B-1 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-1A Portion of
the Class B-1
Principal Balance as
of the Cut-Off Date
evidenced by this
Certificate:
$_______________
Class B-1 Remittance Rate: For any
distribution date means the weighted average
of (A) for the portion of the Subordinate
Certificates attributable to Group I and (i)
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007, an annual rate equal to 5.85%
per annum, subject to a maximum rate equal to
the Adjusted New WAC for Loan Group I for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2007, an annual rate equal to Net WAC on the
Group I Loans, and (B) for the portion of the
Subordinate Certificates attributable to
Group II and any distribution date (i) any
Interest Accrual Period up to and including
the Interest Accrual Period in February
2005], an annual rate equal to 5.35% per
annum, subject to a maximum rate equal to the
Adjusted New WAC for Loan Group II for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2005, an annual rate equal to Net WAC on the
Group II Loans; with the weighted average of
the rates under clauses (A) and (B) above
being calculated in proportion to the Group I
Subordinate Amount and the Group II
Subordinate Amount, respectively.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class B-1 Principal Balance as of the Cut-Off Date: $_______________
A-11-1
_______________________
Registered Owner Certificate No. _____
A-11-2
Exhibit A-12
CUSIP ________
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-2
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended. The issue
date (the "Issue Date") of this Certificate is May 23, 2002. 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.]
The Class B-2 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-1A Portion of
the Class B-2
Principal Balance as
of the Cut-Off Date
evidenced by this
Certificate:
$_______________
Class B-2 Remittance Rate: For any
distribution date means the weighted average
of (A) for the portion of the Subordinate
Certificates attributable to Group I and (i)
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007, an annual rate equal to 5.85%
per annum, subject to a maximum rate equal to
the Adjusted New WAC for Loan Group I for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2007, an annual rate equal to Net WAC on the
Group I Loans, and (B) for the portion of the
Subordinate Certificates attributable to
Group II and any distribution date (i) any
Interest Accrual Period up to and including
the Interest Accrual Period in February 2005,
an annual rate equal to 5.35% per annum,
subject to a maximum rate equal to the
Adjusted New WAC for Loan Group II for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2005, an annual rate equal to Net WAC on the
Group II Loans; with the weighted average of
the rates under clauses (A) and (B) above
being calculated in proportion to the Group I
Subordinate Amount and the Group II
Subordinate Amount, respectively.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class B-2 Principal Balance as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
A-12-1
Exhibit A-13
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 May 23, 2002.
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.]
IN THE CASE OF ANY CLASS B-3 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF
ANY SUBSEQUENT ENACTMENTS) (A "PLAN"), A TRUSTEE OF ANY SUCH PLAN, OR ANY
OTHER PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH
ACQUISITION, THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE SUCH
TRANSFEREE TO PROVIDE AN OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER
OF SUCH TRANSFEREE STATING THAT THE TRANSFEREE IS AN INSURANCE COMPANY USING
ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60) TO
EFFECT SUCH PURCHASE AND SATISFIES ALL OF THE REQUIREMENTS FOR EXEMPTIVE
RELIEF UNDER SECTIONS I AND III OF PTCE 95-60, WHICH OFFICER'S CERTIFICATE
SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE CERTIFICATE ADMINISTRATOR, IF ANY,
OR THE DEPOSITOR.
The Class B-3 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-1A Portion of
the Class B-3
Principal Balance as
of the Cut-Off Date
evidenced by this
Certificate:
$_______________
Class B-3 Remittance Rate: For any
distribution date means the weighted average
of (A) for the portion of the Subordinate
Certificates attributable to Group I and (i)
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007, an annual rate equal to 5.85%
per annum, subject to a maximum rate equal to
the Adjusted New WAC for Loan Group I for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2007, an annual rate equal to Net WAC on the
Group I Loans, and (B) for the portion of the
Subordinate Certificates attributable to
Group II and any distribution date (i) any
Interest Accrual Period up to and including
the Interest Accrual Period in February 2005,
an annual rate equal to 5.35% per annum,
subject to a maximum rate equal to the
Adjusted New WAC for Loan Group II for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2005, an annual rate equal to
A-13-1
Net WAC on the Group II Loans; with the
weighted average of the rates under clauses
(A) and (B) above being calculated in
proportion to the Group I Subordinate Amount
and the Group II Subordinate Amount,
respectively.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class B-3 Principal Balance as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
A-13-2
THIS CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN AND IS NOT EXPECTED TO BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE OWNER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") AND IS
ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS, (WHICH
OTHERS ARE ALSO QIBS) TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (B) IT HAS ACQUIRED THIS
CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT OR (C) IS OTHERWISE ACQUIRING THIS
CERTIFICATE IN A TRANSACTION EXEMPT FROM THE SECURITIES ACT, IN WHICH
CASE, (A) HAS CERTIFIED TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
APPOINTED BY IT) IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, IN
FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE (OR ANY SUCH
CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR AND (B) HAS
DELIVERED A WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE (OR
ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR TO THE
EFFECT THAT ITS ACQUISITION WILL NOT VIOLATE THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS CERTIFICATE
EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES
ACT, (B) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR RULE 904 UNDER THE SECURITIES ACT, (C) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (E)
SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSFER
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
WHICH CASE (A) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY
IT) SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE
A-13-3
TRANSFEREE CERTIFY TO THE TRUSTEE, THE SELLER, THE DEPOSITOR AND THE
INITIAL PURCHASER IN WRITING THE FACTS SURROUNDING SUCH TRANSFER,
WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE
DEPOSITOR, AND (B) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED
BY IT) SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE
AT THE EXPENSE OF THE TRUSTEE) SATISFACTORY TO THE TRUSTEE (OR ANY
CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR TO THE EFFECT
THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CERTIFICATE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND,
(4) ACKNOWLEDGES THAT ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE
IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB INITIO AND THE
PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THIS
CERTIFICATE FOR ALL PURPOSES.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
POOLING AND SERVICING AGREEMENT UNDER WHICH THIS CERTIFICATE WAS ISSUED CONTAINS
A PROVISION REQUIRING THE TRUSTEE (OR CERTIFICATE REGISTRAR APPOINTED BY THE
TRUSTEE) TO REFUSE TO REGISTER ANY TRANSFER OF THIS OFFERED CERTIFICATE IN
VIOLATION OF THE FOREGOING.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE, AS
DEFINED HEREIN, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-13-4
[IF A REGULATION S TEMPORARY GLOBAL CERTIFICATE]
THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE IS A "TEMPORARY GLOBAL
CERTIFICATE" FOR PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), WHICH IS EXCHANGEABLE FOR A
PERMANENT GLOBAL CERTIFICATE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
HEREIN.
[IF A REGULATION S PERMANENT GLOBAL CERTIFICATE]
THIS REGULATION S PERMANENT GLOBAL CERTIFICATE IS A GLOBAL CERTIFICATE WHICH IS
EXCHANGEABLE FOR INTERESTS IN OTHER GLOBAL CERTIFICATES AND DEFINITIVE
CERTIFICATES SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE
POOLING AND SERVICING AGREEMENT (AS DEFINED HEREIN).
A-13-5
Exhibit A-14
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 May 23, 2002.
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.]
IN THE CASE OF ANY CLASS B-4 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF
ANY SUBSEQUENT ENACTMENTS) (A "PLAN"), A TRUSTEE OF ANY SUCH PLAN, OR ANY
OTHER PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH
ACQUISITION, THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE SUCH
TRANSFEREE TO PROVIDE AN OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER
OF SUCH TRANSFEREE STATING THAT THE TRANSFEREE IS AN INSURANCE COMPANY USING
ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60) TO
EFFECT SUCH PURCHASE AND SATISFIES ALL OF THE REQUIREMENTS FOR EXEMPTIVE
RELIEF UNDER SECTIONS I AND III OF PTCE 95-60, WHICH OFFICER'S CERTIFICATE
SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE CERTIFICATE ADMINISTRATOR, IF ANY,
OR THE DEPOSITOR
The Class B-4 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-1A Portion of
the Class B-4
Principal Balance as
of the Cut-Off Date
evidenced by this
Certificate:
$_______________
Class B-4 Remittance Rate: For any
distribution date means the weighted average
of (A) for the portion of the Subordinate
Certificates attributable to Group I and (i)
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2032, an annual rate equal to 5.85%
per annum, subject to a maximum rate equal to
the Adjusted New WAC for Loan Group I for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2032, an annual rate equal to Net WAC on the
Group I Loans, and (B) for the portion of the
Subordinate Certificates attributable to
Group II and any distribution date (i) any
Interest Accrual Period up to and including
the Interest Accrual Period in February
2005], an annual rate equal to 5.35% per
annum, subject to a maximum rate equal to the
Adjusted New WAC for Loan Group II for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2005, an annual rate equal to
A-14-1
Net WAC on the Group II Loans; with the
weighted average of the rates under clauses
(A) and (B) above being calculated in
proportion to the Group I Subordinate Amount
and the Group II Subordinate Amount,
respectively.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class B-4 Principal Balance as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
A-14-2
THIS CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN AND IS NOT EXPECTED TO BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE OWNER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") AND IS
ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS, (WHICH
OTHERS ARE ALSO QIBS) TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (B) IT HAS ACQUIRED THIS
CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT OR (C) IS OTHERWISE ACQUIRING THIS
CERTIFICATE IN A TRANSACTION EXEMPT FROM THE SECURITIES ACT, IN WHICH
CASE, (A) HAS CERTIFIED TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
APPOINTED BY IT) IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, IN
FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE (OR ANY SUCH
CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR AND (B) HAS
DELIVERED A WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE (OR
ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR TO THE
EFFECT THAT ITS ACQUISITION WILL NOT VIOLATE THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS CERTIFICATE
EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES
ACT, (B) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR RULE 904 UNDER THE SECURITIES ACT, (C) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (E)
SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSFER
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
WHICH CASE (A) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY
IT) SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE
A-14-3
TRANSFEREE CERTIFY TO THE TRUSTEE, THE SELLER, THE DEPOSITOR AND THE
INITIAL PURCHASER IN WRITING THE FACTS SURROUNDING SUCH TRANSFER,
WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE
DEPOSITOR, AND (B) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED
BY IT) SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE
AT THE EXPENSE OF THE TRUSTEE) SATISFACTORY TO THE TRUSTEE (OR ANY
CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR TO THE EFFECT
THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CERTIFICATE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND,
(4) ACKNOWLEDGES THAT ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE
IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB INITIO AND THE
PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THIS
CERTIFICATE FOR ALL PURPOSES.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
POOLING AND SERVICING AGREEMENT UNDER WHICH THIS CERTIFICATE WAS ISSUED CONTAINS
A PROVISION REQUIRING THE TRUSTEE (OR CERTIFICATE REGISTRAR APPOINTED BY THE
TRUSTEE) TO REFUSE TO REGISTER ANY TRANSFER OF THIS OFFERED CERTIFICATE IN
VIOLATION OF THE FOREGOING.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE, AS
DEFINED HEREIN, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-14-4
[IF A REGULATION S TEMPORARY GLOBAL CERTIFICATE]
THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE IS A "TEMPORARY GLOBAL
CERTIFICATE" FOR PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), WHICH IS EXCHANGEABLE FOR A
PERMANENT GLOBAL CERTIFICATE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
HEREIN.
[IF A REGULATION S PERMANENT GLOBAL CERTIFICATE]
THIS REGULATION S PERMANENT GLOBAL CERTIFICATE IS A GLOBAL CERTIFICATE WHICH IS
EXCHANGEABLE FOR INTERESTS IN OTHER GLOBAL CERTIFICATES AND DEFINITIVE
CERTIFICATES SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE
POOLING AND SERVICING AGREEMENT (AS DEFINED HEREIN).
A-14-5
Exhibit A-15
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 May 23, 2002.
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.]
IN THE CASE OF ANY CLASS B-5 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF
ANY SUBSEQUENT ENACTMENTS) (A "PLAN"), A TRUSTEE OF ANY SUCH PLAN, OR ANY
OTHER PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH
ACQUISITION, THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE SUCH
TRANSFEREE TO PROVIDE AN OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER
OF SUCH TRANSFEREE STATING THAT THE TRANSFEREE IS AN INSURANCE COMPANY USING
ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60) TO
EFFECT SUCH PURCHASE AND SATISFIES ALL OF THE REQUIREMENTS FOR EXEMPTIVE
RELIEF UNDER SECTIONS I AND III OF PTCE 95-60, WHICH OFFICER'S CERTIFICATE
SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE CERTIFICATE ADMINISTRATOR, IF ANY,
OR THE DEPOSITOR.
The Class B-5 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-1A Portion of
the Class B-5
Principal Balance as
of the Cut-Off Date
evidenced by this
Certificate:
$_______________
Class B-5 Remittance Rate: For any
distribution date means the weighted average
of (A) for the portion of the Subordinate
Certificates attributable to Group I and (i)
any Interest Accrual Period up to and
including the Interest Accrual Period in
February 2007, an annual rate equal to 5.85%
per annum, subject to a maximum rate equal to
the Adjusted New WAC for Loan Group I for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2007, an annual rate equal to Net WAC on the
Group I Loans, and (B) for the portion of the
Subordinate Certificates attributable to
Group II and any distribution date (i) any
Interest Accrual Period up to and including
the Interest Accrual Period in February 2005,
an annual rate equal to 5.35% per annum,
subject to a maximum rate equal to the
Adjusted New WAC for Loan Group II for the
related distribution date, and (ii) beginning
with the Interest Accrual Period in March
2005, an annual rate equal to
A-15-1
Net WAC on the Group II Loans; with the weighted average of the rates under
clauses (A) and (B) above being calculated in proportion to the Group I
Subordinate Amount and the Group II Subordinate Amount, respectively.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class B-5 Principal Balance as of the Cut-Off Date: $_______________
_______________________
Registered Owner Certificate No. _____
A-15-2
THIS CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN AND IS NOT EXPECTED TO BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE OWNER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") AND IS
ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS, (WHICH
OTHERS ARE ALSO QIBS) TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (B) IT HAS ACQUIRED THIS
CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT OR (C) IS OTHERWISE ACQUIRING THIS
CERTIFICATE IN A TRANSACTION EXEMPT FROM THE SECURITIES ACT, IN WHICH
CASE, (A) HAS CERTIFIED TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
APPOINTED BY IT) IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, IN
FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE (OR ANY SUCH
CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR AND (B) HAS
DELIVERED A WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE (OR
ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR TO THE
EFFECT THAT ITS ACQUISITION WILL NOT VIOLATE THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS CERTIFICATE
EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES
ACT, (B) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR RULE 904 UNDER THE SECURITIES ACT, (C) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (E)
SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSFER
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
WHICH CASE (A) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY
IT) SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE
A-15-3
TRANSFEREE CERTIFY TO THE TRUSTEE, THE SELLER, THE DEPOSITOR AND THE
INITIAL PURCHASER IN WRITING THE FACTS SURROUNDING SUCH TRANSFER,
WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE
DEPOSITOR, AND (B) THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED
BY IT) SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE
AT THE EXPENSE OF THE TRUSTEE) SATISFACTORY TO THE TRUSTEE (OR ANY
CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR TO THE EFFECT
THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CERTIFICATE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND,
(4) ACKNOWLEDGES THAT ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE
IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB INITIO AND THE
PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THIS
CERTIFICATE FOR ALL PURPOSES.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
POOLING AND SERVICING AGREEMENT UNDER WHICH THIS CERTIFICATE WAS ISSUED CONTAINS
A PROVISION REQUIRING THE TRUSTEE (OR CERTIFICATE REGISTRAR APPOINTED BY THE
TRUSTEE) TO REFUSE TO REGISTER ANY TRANSFER OF THIS OFFERED CERTIFICATE IN
VIOLATION OF THE FOREGOING.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE, AS
DEFINED HEREIN, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-15-4
[IF A REGULATION S TEMPORARY GLOBAL CERTIFICATE]
THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE IS A "TEMPORARY GLOBAL
CERTIFICATE" FOR PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), WHICH IS EXCHANGEABLE FOR A
PERMANENT GLOBAL CERTIFICATE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
HEREIN.
[IF A REGULATION S PERMANENT GLOBAL CERTIFICATE]
THIS REGULATION S PERMANENT GLOBAL CERTIFICATE IS A GLOBAL CERTIFICATE WHICH IS
EXCHANGEABLE FOR INTERESTS IN OTHER GLOBAL CERTIFICATES AND DEFINITIVE
CERTIFICATES SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE
POOLING AND SERVICING AGREEMENT (AS DEFINED HEREIN).
A-15-5
EXHIBIT B
---------
FORM OF RESIDUAL CERTIFICATE
CUSIP _________
MORTGAGE PASS-THROUGH CERTIFICATE
Class R
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to-four family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE DEPOSITOR AND
THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A
DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE
TRANSFER TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL
INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
IN THE CASE OF ANY CLASS R CERTIFICATE PRESENTED FOR REGISTRATION IN THE NAME OF
AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS) (A "PLAN"), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER
PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION,
THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE SUCH TRANSFEREE TO PROVIDE AN
OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF SUCH TRANSFEREE STATING
THAT THE TRANSFEREE IS AN INSURANCE COMPANY USING ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 95-60) TO EFFECT SUCH PURCHASE AND
SATISFIES ALL OF THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III
OF PTCE 95-60, WHICH OFFICER'S CERTIFICATE SHALL NOT BE AN EXPENSE OF THE
TRUSTEE OR THE DEPOSITOR.
Solely for U.S. federal income tax purposes, this Certificate represents
"residual interests" in "real estate mortgage investment conduits," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended.
Series 2002-1A Percentage Interest evidenced by
this Class R Certificate in the
distributions to be made with
respect to the Class R Certificate:
100%
Class R Remittance Rate: With respect to [Additionally, the Class R
any Interest Accrual Period is equal to Certificates are entitled to Excess
the Adjusted Net WAC for Loan Group II Liquidation Proceeds and the
for the related Distribution Date. Residual Distribution Amount as
Thereafter, the Class R Interest Rate defined in the Pooling and
will be equal to the Net WAC for Loan Servicing Agreement.]
Group I for the related Distribution
Date.
Cut-Off Date: May 1, 2002
First Distribution Date: June 25, 2002
Last Scheduled Distribution Date: June 25, 2032
Class R Principal Balance as of the Cut-Off Date: $100
B-1
_______________________
Registered Owner Certificate No. _____
B-2
EXHIBIT C
---------
[RESERVED]
C-1
EXHIBIT D
---------
SCHEDULE OF LOANS
See Schedule I to the Mortgage Loan Purchase
Agreement, dated as of May 23, 2002, between
the Seller and the Purchaser
[provided upon request]
D-1
EXHIBIT E
---------
FIELDS OF LOAN INFORMATION
Deal Name
Distribution Date
Loan Number
Loan Group
City
State
Zip Code
Property Type (SFR, CONDO, etc.)
Occupancy Status (Owner, Investor, etc.)
Loan Purpose (Purchase, Refi, etc.)
Loan Type
Loan Status (Current, Foreclosure, REO, Bankruptcy)
Original Term of Loan
Amortization Term
First Payment of Loan
Maturity Date
Appraisal Value
Original LTV
Original Principal Balance
Previous Month's Balance
Current Principal Balance
Prepay Date
Prepay Status (Loan has been prepaid, liquidated or repurchased by the Servicer)
Original Scheduled P&I
Current Scheduled P&I
Scheduled Interest Amount
Scheduled Principal Amount
Curtailment
Note Rate
Paid to Date
Payment Date
E-1
EXHIBIT F
---------
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
JPMorgan Chase Bank, as Trustee
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Institutional Trust Services
[LaSalle Bank National Association, as Certificate Registrar
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Asset Backed Securities Trust Services - ABN AMRO Series 2002-1A]
Re: Purchase of ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates Series 2002-1A, Class [B-3] [B-4] [B-5] (the
"Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act") and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, and
(b) we have not offered or sold any certificates to, or solicited offers to buy
any Certificates from, any person, or otherwise approached or negotiated with
any person with respect thereto, or taken any other action which would result in
a violation of Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By: ______________________
Authorized Officer
F-1
EXHIBIT G
---------
FORM OF TRANSFEREE'S CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Institutional Trust Services
ABN AMRO Mortgage Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
[LaSalle Bank National Association, as Certificate Registrar
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Asset Backed Securities Trust Services - ABN AMRO Series 2002-1A]
The undersigned (the "Purchaser") proposes to purchase [Class B-3]
[Class B-4] [Class B-5] Certificates evidencing an undivided interest in ABN
AMRO Mortgage Corporation Mortgage Pass- Through Certificates, Series 2002-1A
(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 May 1, 2002, between ABN AMRO Mortgage
Corporation ("AAMC"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer") and JPMorgan Chase Bank, as trustee (the "Trustee"), of the ABN AMRO
Mortgage Corporation Mortgage Pass-Through Certificates, Series 2002-1A.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants to
AAMC, the Servicer, the Certificate Registrar and the Trustee that:
(a) The Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which the Purchaser is organized,
is authorized to invest in the Purchased Certificates, and to enter into this
Agreement, and duly executed and delivered this Agreement;
(b) The Purchaser is acquiring the Purchased Certificates for its own
account as principal and not with a view the distribution thereof, in whole or
in part;
G-1
(c) The Purchaser is an "accredited investor" as such term is defined in
paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section 501 of Regulation
D under the Securities Act of 1933, as amended (the "Act"), has knowledge of
financial and business matters and is capable of evaluating the merits and risks
of an investment in the Purchased Certificates; the Purchaser has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Purchaser is able to bear the economic
risk of an investment in the Purchased Certificates and can afford a complete
loss of such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that AAMC has made available to the Purchaser
the opportunity to ask questions of, and receive answers from AAMC concerning
the Trust, the purchase by the Purchaser of the Purchased Certificates and all
matters relating thereto that AAMC possesses or can acquire without unreasonable
effort or expense;
(f) If applicable, the Purchaser has complied, and will continue to
comply, with the guidelines established by Thrift Bulletin 12 issued December
13, 1988, by the Office of Regulatory Activities of the Federal Home Loan Bank
System; and
(g) The Purchaser will provide the Trustee and the Servicer with
affidavits substantially in the form of Exhibit A attached hereto.
Section 3. Transfer of Purchased Certificates.
(a) The Purchaser understands that the Purchased Certificates have not
been registered under the Act, or any state securities laws and that no transfer
may be made unless the Purchased Certificates are registered under the Act and
under applicable state law or unless an exemption from registration is
available. The Purchaser further understands that neither AAMC nor the Trust is
under any obligation to register the Purchased Certificates or make an exemption
available. In the event that such a transfer is to be made within two years from
the Closing Date without registration under the Act or applicable state
securities laws, (i) the Trustee or the Certificate Registrar shall require, in
order to assure compliance with such laws, that the Certificateholder's
prospective transferees each certify to AAMC, the Certificate Registrar and the
Trustee as to the factual basis for the registration or qualification exemption
relied upon, and (ii) the Trustee, the Certificate Registrar or AAMC may require
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act and state securities laws, which Opinion of Counsel shall not be an
expense of the Trustee, the Certificate Registrar or AAMC. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee and AAMC against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws.
(b) No transfer of a Purchased Certificate shall be made unless the
transferee provides AAMC, the Certificate Registrar and the Trustee with (i) a
Transferee's Agreement, substantially
G-2
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 Internal Revenue Code of 1986, as
amended, or comparable provisions of any subsequent enactments (a "Plan"), a
trustee of any Plan, or any other Person who is using the "plan assets" of any
Plan to effect such acquisition or (y) is an insurance company, the source of
funds to be used by it to purchase the Purchased Certificates is an "insurance
company general account" (within the meaning of Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and is eligible for, and satisfies
all the requirements for, exemptive relief under Sections I and III of PTCE
95-60.
(c) The Purchaser acknowledges that its Purchased Certificates bear a
legend setting forth the applicable restrictions on transfer.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
validly executed by its duly authorized representative as of the day and the
year first above written.
[Purchaser]
By:___________________________
Its:
G-3
Exhibit A to Form of Transferee Agreement (Exhibit G)
BENEFIT PLAN AFFIDAVIT
----------------------
RE: ABN AMRO MORTGAGE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
2002-1A (THE "TRUST") [CLASS B-3] [CLASS B-4] [CLASS B-5] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, ___________________, declare that, to the
best of my knowledge and belief, the following representations are true, correct
and complete; and
1. That I am the _________ of _________________ (the "Purchaser"), whose
taxpayer identification number is ___________, and on behalf of which I have the
authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate representing
an interest in Trust.
3. That the Purchaser (i) is not an employee benefit plan or other plan
or arrangement subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or comparable
provisions of any subsequent enactments (a "Plan"), a trustee of any Plan, or
any other Person who is using the "plan assets" of any Plan to effect such
acquisition, or (ii) has provided an Officer's Certificate signed by a
Responsible Officer of the Purchaser satisfactory to ABN AMRO Mortgage
Corporation (the "Depositor"), the Certificate Registrar, and the Trustee of the
Trust stating that the Purchaser is an insurance company using assets of an
"insurance company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60) to effect such purchase
and is eligible for, and satisfies all of the requirements for exemptive relief
under Sections I and III of PTCE 95-60, which Officer's Certificate shall not be
an expense of the Depositor or the Trustee.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this day of
_____________, 20 .
[Purchaser]
By:
----------------
Its:
G-4
Personally appeared before me ________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
_______________ of the Purchaser, and acknowledged to me that (s)he executed the
same as his/her free act and deed and as the free act and deed of the Purchaser.
SUBSCRIBED and SWORN to before me this __day of __________, 20 .
---
_______________________
Notary Public
G-5
EXHIBIT H
---------
[RESERVED]
H-1
EXHIBIT I
---------
FORM OF TRANSFEROR CERTIFICATE
[Date]
JPMORGAN CHASE BANK, AS TRUSTEE
000 XXXXXX XXXXXX, 00XX XXXXX
XXXXXXX, XXXXX 00000
ATTN: INSTITUTIONAL TRUST SERVICES
[LASALLE BANK NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR
000 XXXXX XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000
ATTN: ASSET BACKED SECURITIES TRUST SERVICES -
ABN AMRO SERIES 2002-1A_________________________]
RE: ABN AMRO MORTGAGE CORPORATION MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2002-1A CLASS R
This letter is delivered to you in connection with the sale by
______________ (the "Seller") to _____________ (the "Purchaser") of
$____________ initial Certificate Principal Balance of Mortgage Pass-Through
Certificates, Series 2002-1A, Class R (the "Certificate"), pursuant to Section
5.1 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of May 1, 2002 among ABN AMRO Mortgage Corporation, as
depositor (the "Company"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer"), and JPMorgan Chase Bank, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with the Depositor, the Servicer, the Certificate
Registrar and the Trustee that:
1. No purpose of the Seller relating to the sale of the Certificate
by the Seller to the Purchaser is or will be to enable the Seller to impede the
assessment or collection of tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee, the Servicer, the Certificate Registrar and the Depositor a transferee
affidavit and agreement in the form attached to the Pooling and Servicing
Agreement as Exhibit J. The Seller does not know or believe that any
representation contained therein is false.
3. The Seller has no actual knowledge that the Proposed Transferee
is not a Permitted Transferee.
I-1
4. The Seller has no actual knowledge that the Purchaser would be
unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificates.
5. At the time of this transfer (i) the Seller has conducted a
reasonable investigation of the financial condition of the Purchaser and, as a
result of the investigation, found that the Purchaser has historically paid its
debts as they came due, and found no significant evidence to indicate that the
Purchaser will not continue to pay its debts as they come due in the future and
(ii) either (A) the Seller both (1) has determined all of the following (I) at
the time of the transfer, and at the close of each of the Purchaser's two fiscal
years preceding the year of transfer, the Purchaser's gross assets for financial
reporting purposes exceed $100 million and its net assets for such purposes
exceed $10 million (disregarding, for purposes of determining gross or net
assets, the obligation of any person related to the Purchaser within the meaning
of section 860L(g) of the Code or any other asset if a principal purpose for
holding or acquiring that asset is to permit the Purchaser to satisfy this
minimum gross asset or net asset requirement), (II) the Purchaser is a domestic
C corporation for United States federal income tax purposes that is not for such
purposes an exempt corporation, a regulated investment company, a real estate
investment trust, a REMIC, or a cooperative organization to which part I of
subchapter T of the Code applies, (III) there are no facts or circumstances on
or before the date of transfer (or anticipated) which would reasonably indicate
that the taxes associated with the Certificates will not be paid, (IV) the
Purchaser is not a foreign branch of a domestic corporation, and (V) the
transfer does not involve a transfer or assignment to a foreign branch of a
domestic corporation (or any other arrangement by which any Certificate is at
any time subject to net tax by a foreign country or U.S. possession) and the
Purchaser will not hereafter engage in any such transfer or assignment (or any
such arrangement), and (2) does not know or have reason to know that the
Purchaser will not honor the restrictions on subsequent transfers of any Class R
Certificate described in paragraph 12 and 13 of the Transferee's Transfer
Affidavit, or (B) the Seller has determined that the present value of the
anticipated tax liabilities associated with the holding of the Certificates do
not exceed the sum of (1) the present value of any consideration given to the
Purchaser to acquire the Certificates, (2) the present value of the expected
future distributions on the Certificates, and (3) the present value of the
anticipated tax savings associated with holding the Certificates as the REMIC
generates losses (having made such determination by (I) assuming that the
Purchaser pays tax at a rate equal to the highest rate of tax specified in
Section 11(b)(1) of the Code, and (II) utilizing a discount rate for present
valuation purposes equal to the applicable Federal rate prescribed by Section
1274(d) of the Code compounded semi-annually (or a lower discount rate based on
the Purchaser having demonstrated that it regularly borrows, in the course of
its trade or business, substantial funds at such lower rate from unrelated third
parties)).
I-2
6. The Purchaser has represented to the Seller that, if the
Certificates constitute a noneconomic residual interest, it (i) understands that
as holder of a noneconomic residual interest it may incur tax liabilities in
excess of any cash flows generated by the interest, and (ii) intends to pay
taxes associated with its holding of the Certificates as they become due.
7. The Seller understands that the transfer of the Certificates may
not be respected for United States income tax purposes (and the Seller may
continue to be liable for United States income taxes associated therewith)
unless there is compliance with the standards of paragraph 5. above as to any
transfer.
Very truly yours,
[Seller]
By:________________________
Name:______________________
Title:_____________________
I-3
EXHIBIT J
---------
FORM OF TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the Class R Certificate (the "Owner")), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ________________] [the United States], on behalf of which he makes this
affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of the [date of transfer] within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code") and
will endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificate, and (ii) is acquiring
the Class R Certificate for its own account or for the account of another Owner
from which it has received an affidavit and agreement in substantially the same
form as this affidavit and agreement. (For this purpose, a "disqualified
organization" means the United States, any state or political subdivision
thereof, or any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity, or any foreign
government or international organization, or any agency or instrumentality of
such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificate; (ii) that such tax would be on the
transferor, or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a disqualified organization, on the agent;
(iii) that the person otherwise liable for the tax shall be relieved of
liability for the tax if the transferee furnished to such person an affidavit
that the transferee is not a disqualified organization and, at the time of
transfer, such person does not have actual knowledge that the affidavit is
false; and (iv) that the Class R Certificate may represent "noneconomic residual
interests" within the meaning of Treasury regulations promulgated pursuant to
the Code and that the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such residual interest,
if a significant purpose of the transfer was to enable the transferor to impede
the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding the
J-1
Class R Certificate if at any time during the taxable year of the pass-through
entity a disqualified 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. The Owner will, in connection with any transfer that it makes of
the Class R Certificate deliver to the Certificate Registrar a representation
letter substantially in the form of Exhibit I to the Pooling and Servicing
Agreement. [The Owner hereby agrees that it will not make any transfer of any
Class R Certificate unless (i) the transfer is to an entity which is a domestic
C corporation (other than an exempt corporation, a regulated investment company,
a real estate investment trust, a REMIC, or a cooperative organization to which
part I of Subchapter T of the Code applies) for federal income tax purposes, and
(ii) the transfer is in compliance with the
J-2
&&&
conditions set forth in paragraph 5 of Exhibit I of the Pooling and Servicing
Agreement.]1/.
13. The Owner (i) is a citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more such U.S. Persons have the authority to control all substantial decisions
of the trust and (ii) if the Owner is a partnership for U.S. federal income tax
purposes, each person or entity which holds an interest (directly or indirectly,
through a pass-through entity) is a person or entity described in (i). To the
extent prescribed in regulations by the Secretary of the Treasury, which have
not yet been issued, a trust which was in existence on August 20, 1996 (other
than a trust treated as owned by the grantor under subpart E of part 1 of
subchapter J of chapter 1 of the Code), and which was treated as a U.S. Person
on August 20, 1996 may elect to continue to be treated as a U.S. Person
notwithstanding the previous sentence.
14. The Owner hereby agrees to cooperate with the Depositor and to
take any action required of it by the Code or Treasury regulations thereunder
(whether now or hereafter promulgated) in order to create or maintain the REMIC
status of the REMIC I, REMIC II, REMIC III or REMIC IV.
15. The Owner hereby agrees that it will not take any action that
could endanger the REMIC status of the REMIC I, REMIC II, REMIC III or REMIC IV,
as applicable, or result in the imposition of tax on the REMIC I, REMIC II,
REMIC III or REMIC IV 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.
[17. The Owner hereby represents to and for the benefit of the
transferor that (i) at the time of the transfer, and at the close of each of the
Owners's two fiscal years preceding the year of
----------------------------
1/ Bracketed text to be included if the Owner is relying on the transferee's
compliance with the "Asset Test Safe Harbor" (which is generally described as
the second "safe harbor" in the Prospectus Supplement) rather then the "Formula
Test Safe Harbor" (which is generally described as the first "safe harbor" in
the Prospectus Supplement). See "Federal Income Tax Consequences--Special Tax
Considerations Applicable to the Residual Certificate" in the Prospectus
Supplement.
J-3
transfer, the Owners's gross assets for financial reporting purposes exceed $100
million and its net assets for such purposes exceed $10 million (disregarding,
for purposes of determining gross or net assets, the obligation of any person
related to the Owner within the meaning of section 860L(g) of the Code or any
other asset if a principal purpose for holding or acquiring that asset is to
permit the Owner to satisfy this minimum gross asset or net asset requirement),
(ii) the Owner is a domestic C corporation for United States federal income tax
purposes that is not for such purposes an exempt corporation, a regulated
investment company, a real estate investment trust, a REMIC, or a cooperative
organization to which part I of subchapter T of the Code applies, (iii) there
are no facts or circumstances on or before the date of transfer (or anticipated)
which would reasonably indicate that the taxes associated with the Class R
Certificate will not be paid, and (iv) the Owner is not a foreign branch of a
domestic corporation, the transfer does not involve a transfer or assignment to
a foreign branch of a domestic corporation (or any other arrangement by which
any Class R Certificate is at any time subject to net tax by a foreign country
or U.S. possession), and the Owner will not hereafter engage in any such
transfer or assignment (or any such arrangement).]1/
-----------------------
1/Bracketed text to be included if the Owner is relying on the transferee's
compliance with the "Asset Test Safe Harbor" (which is generally described as
the second "safe harbor" in the Prospectus Supplement) rather then the "Formula
Test Safe Harbor" (which is generally described as the first "safe harbor" in
the Prospectus Supplement). See "Federal Income Tax Consequences--Special Tax
Considerations Applicable to the Residual Certificate" in the Prospectus
Supplement.
J-4
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, pursuant to the authority of its Board of Directors, by its [Title
of Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this day of , 20 .
[Name of Owner]
By: ____________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
J-5
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be the [Title of Officer] of the Owner, and Acknowledged to me that he executed
the same as his free act and deed and free act and deed of the Owner.
Subscribed and sworn before me this day of ___________, 20__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the ________ day
of __________, 20__
J-6
EXHIBIT K
---------
FORM OF ADDITIONAL MATTER INCORPORATED
INTO THE FORM OF THE CERTIFICATES
This Certificate does not represent an obligation of or interest in ABN
AMRO Mortgage Corporation or any of its affiliates. Neither this Certificate nor
the underlying Loans are guaranteed by any agency or instrumentality of the
United States.
This certifies that the above-mentioned Registered Owner is the registered
owner of certain interests in a trust fund (the "Certificate Trust Fund") whose
assets consist of, among other things, a pool (the "Mortgage Pool") of
conventional one- to four-family mortgage loans (the "Loans"), formed by ABN
AMRO Mortgage Corporation (the "Depositor"). The Loans were originated or
acquired by various financial institutions and subsequently acquired by the
Depositor. The Mortgage Pool was created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-Off Date stated above (the "Pooling Agreement"),
between the Depositor, ABN AMRO Mortgage Group, Inc., as Servicer (the
"Servicer"), and JPMorgan Chase Bank, as Trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Pooling Agreement. Nothing herein shall be deemed inconsistent
with such meanings, and in the event of any conflict between the Pooling
Agreement and the terms of this Certificate, the Pooling Agreement shall
control. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling Agreement, to which Pooling Agreement
the Holder of this Certificate, by virtue of the acceptance hereof, assents and
by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), to the
extent of such Certificateholder's Percentage Interest represented by this
Certificate in the portion of the Certificate Distribution Amount for such
Distribution Date then distributable on the Certificates of this Class, as
specified in Section 4.1 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee or its Paying
Agent by wire transfer or by other means of payment acceptable to each
Certificateholder of record on the immediately preceding Record Date.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee or its Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate to the
Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
K-1
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any purpose.
K-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
JPMORGAN CHASE BANK, as Trustee
By: ____________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Pooling
Agreement.
JPMORGAN CHASE BANK,
as Trustee
By: __________________________
Dated: _______________________
K-3
ABN AMRO MORTGAGE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass- Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing certain
interests in the Certificate Trust Fund.
The Certificates do not represent an obligation of, or an interest in, the
Depositor or any of its affiliates and are not insured or guaranteed by any
governmental agency. The Certificates are limited in right of payment to certain
collections and recoveries respecting the Loans, all as more specifically set
forth herein and in the Pooling Agreement. To the extent described in the
Pooling Agreement, the Servicer is obligated to advance its own funds to cover
certain shortfalls with respect to payments on the Loans. In the event Servicer
funds are advanced with respect to any Loan, such advance is reimbursable to the
Servicer from the related recoveries on such Loan or from other cash deposited
in the Custodial Account for P&I to the extent that such advance is not
otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Custodial
Account for P&I may be made by the Servicer from time to time for purposes other
than distributions to Certificateholders, such purposes including reimbursement
to the Servicer of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Servicer, and the rights of the Certificateholders under the
Pooling Agreement at any time by the Depositor and the Trustee, with the consent
of the Holders of the Certificates aggregating not less than 66-2/3% of the
aggregate Percentage Interest evidenced by all of the Certificates of the Trust
Fund. For the purposes of such provision and except as provided below, voting
rights related to 100% of the Aggregate Certificate Principal Balance of any
Class will be allocated pro rata (by Certificate Principal Balance) among the
Certificates of such Class. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Pooling Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar or the office maintained by
the Trustee in the City and State of New York, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of Authorized Denominations evidencing
the
K-4
same Percentage Interest set forth hereinabove will be issued to the designated
transferee or transferees.
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 Class
R Certificate shall be made unless such transfer, sale, pledge or other
disposition is made in accordance with Section 5.1(c) or Section 5.1(d) of the
Pooling Agreement. 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 5.12 and the restrictions
set forth in the legend referred to in Section 5.13 of the Pooling Agreement and
the legends contained herein. Each Person who, at the 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 5.12.
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 Servicer 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 insert social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints ______________________________________________________
Attorney to transfer said Certificate on the Certificate Register, with full
power of substitution in the premises.
Dated:________________ ______________________________
________________________ Signature Guaranteed
___________________________________
___________________________
NOTICE:
The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement
or any change whatever.
K-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 any disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities in
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 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 May 1, 2002
between ABN AMRO Mortgage Corporation, as Depositor, ABN AMRO Mortgage Group,
Inc., as Servicer, and JPMorgan Chase Bank, as Trustee) pursuant to Section
5.1(f) of the Agreement, as follows:
(a) The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Rule 144A Securities.
(c) The Buyer has received and reviewed the Private Placement
Memorandum
L-1
dated as of May 23, 2002 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.
(d) Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the disposition of
the Rule 144A Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will it
authorize any person to act, in such manner with respect to the Rule 144A
Securities.
(e) The Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the 1933 Act and has (1) completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2, or
(2) obtained the waiver of the Depositor with respect to Annex 1 and Annex 2
pursuant to Section 5.1(f) of the Agreement. The Buyer is aware that the sale to
it is being made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified institutional
buyers, understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
(f) The Buyer is not affiliated with (i) the Trustee or (ii) any
Rating Agency that rated the Rule 144A Securities.
(g) If applicable, the Buyer has complied, and will continue to
comply, with the guidelines established by Thrift Bulletin 12 issued December
13, 1988, by the Office of Regulatory Activities of the Federal Home Loan Bank
System.
[Required only in the case of a transfer of a Class B-3, Class B-4, Class
B-5 Certificate][3. The Buyer warrants and represents to, and covenants with,
the Seller, the Servicer, the Certificate Registrar and the Depositor that (1)
the Buyer is not an employee benefit plan (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
subject to the prohibited transaction provisions of ERISA ("Plan"), or a plan
(within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
("Code")) subject to Section 4975 of the Code (also a "Plan"), and the Buyer is
not directly or indirectly purchasing the Rule 144A Securities on behalf of, as
investment manager of, as named fiduciary of, as trustee of, or with "plan
assets" of any Plan, or (2) the Buyer has provided the Seller, the Servicer, the
Certificate Registrar
L-2
and the Depositor with an Officer's Certificate signed by a Responsible Officer
of the Buyer stating that the Buyer is an insurance company using assets of an
"insurance company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95- 60) to effect such purchase
and is eligible for, and satisfies all of the requirements for exemptive relief
under Sections I and III of PTCE 95-60, which Officer's Certificate shall not be
an expense of the Servicer or the Depositor.]
3. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
L-3
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
_______________________________ _______________________________
Print Name of Seller Print Name of Buyer
By: ___________________________ By: ___________________________
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification
No.:___________________________ No.:____________________________
Date:___________________________ Date:___________________________
L-4
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice-President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $__________2/ in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A) and (ii) the
Buyer satisfies the criteria in the category marked below.
_______ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
_______ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.
_______ SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements. -------- 2/ Buyer must own and/or invest on a
discretionary basis at least $100,000,000 in securities unless
Buyer is a dealer, and, in that case, Buyer must own and/or invest
on a discretionary basis at least $10,000,000 in securities.
L-1-1
_______ BROKER-DEALER.The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
_______ INSURANCE COMPANY. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State or territory or the District
of Columbia.
_______ STATE OR LOCAL PLAN. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions, for
the benefit of its employees.
_______ ERISA PLAN. The Buyer is an employee benefit plan within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and is subject to the fiduciary
responsibility provisions of ERISA.
_______ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
_______ SBIC. The Buyer is a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.
_______ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
_______ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivision,
or any agency or instrumentality of the State or its political
subdivision, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
L-1-2
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 if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
____________ Will the Buyer be purchasing the Rule 144A
Yes No 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 in a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties
L-2-1
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 reliance
on Rule 144A. In addition, the Buyer will only purchase for the Buyer's own
account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
_______________________________________
Print Name of Buyer
By: ___________________________________
Name:
Title:
Date: _________________________________
IF AN ADVISER
_______________________________________
Print Name of Buyer
By: ___________________________________
Name:
Title:
Date: _________________________________
(SEAL)
L-2-2
EXHIBIT M
---------
PLANNED PRINCIPAL BALANCE TABLE*
AGGREGATE
CLASS IA-1
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
----------------- -----------
Initial Balance.................... $139,063,000.00
June 25, 2002...................... 136,360,403.87
July 25, 2002...................... 133,680,635.93
August 25, 2002.................... 131,023,509.52
September 25, 2002................. 128,388,839.51
October 25, 2002................... 125,776,442.26
November 25, 2002.................. 123,186,135.65
December 25, 2002.................. 120,617,739.04
January 25, 2003................... 118,071,073.24
February 25, 2003.................. 115,545,960.56
March 25, 2003..................... 113,042,224.74
April 25, 2003..................... 110,559,690.95
May 25, 2003....................... 108,098,185.80
June 25, 2003...................... 105,657,537.31
July 25, 2003...................... 103,237,574.91
August 25, 2003.................... 100,838,129.40
September 25, 2003................. 98,459,033.00
October 25, 2003................... 96,100,119.26
November 25, 2003.................. 93,761,223.11
December 25, 2003.................. 91,442,180.82
January 25, 2004................... 89,142,830.00
February 25, 2004.................. 86,863,009.59
March 25, 2004..................... 84,602,559.84
April 25, 2004..................... 82,361,322.29
May 25, 2004....................... 80,139,139.81
June 25, 2004...................... 77,935,856.51
July 25, 2004...................... 75,751,317.81
August 25, 2004.................... 73,585,370.37
September 25, 2004................. 71,437,862.11
October 25, 2004................... 69,308,642.20
November 25, 2004.................. $67,197,561.01
December 25, 2004.................. 65,104,470.18
January 25, 2005................... 63,029,222.53
February 25, 2005.................. 60,971,672.09
March 25, 2005..................... 58,931,674.08
April 25, 2005..................... 56,909,084.91
May 25, 2005....................... 54,903,762.17
June 25, 2005...................... 52,915,564.58
July 25, 2005...................... 50,944,352.06
August 25, 2005.................... 48,989,985.65
September 25, 2005................. 47,052,327.52
M-1
October 25, 2005................... 45,131,240.98
AGGREGATE
CLASS IA-1
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
----------------- -----------
November 25, 2005 43,226,590.46
December 25, 2005 41,373,975.64
January 25, 2006 39,600,441.95
February 25, 2006 37,902,625.06
March 25, 2006 36,277,303.33
April 25, 2006 34,721,391.82
May 25, 2006 33,231,936.50
June 25, 2006 31,806,108.68
July 25, 2006 30,441,199.72
August 25, 2006 29,134,615.97
September 25, 2006 27,883,873.87
October 25, 2006 26,686,595.29
November 25, 2006 25,540,503.09
December 25, 2006 24,443,319.67
January 25, 2007 23,393,062.24
February 25, 2007 22,387,601.16
March 25, 2007 21,425,023.04
* The principal balance for the PAC certificates on each
distribution date were calculated assuming that (i) the
Group I Loans have the characteristics set forth in the
Modeling Assumptions described under the heading
"Prepayment and Yield Consideration--Prepayment Speed
Assumption and Modeling Assumptions," and (ii) the Group
I Loans are prepaid at a constant rate within the range
of 9.3% to 40% CPR.
The Planned Principal Balance Table has been prepared on the basis of the
Modeling Assumptions and the assumption that the Group I Loans will prepay at a
constant CPR rate within the applicable structuring ranges specified below.
M-2
EXHIBIT N
---------
[RESERVED]
N-1
EXHIBIT O
---------
[RESERVED]
O-1
EXHIBIT P
---------
[RESERVED]
O-2
EXHIBIT Q
---------
BLOOMBERG DATA
Loan Number
Property Type
Owner Occupied
Loan Purpose
Loan Type
Loan Group
Current Interest Rate
Original Balance
Current Balance
First Payment Date
Maturity Date
Current PNI
Servicing Fee
Loan Term
Foreclosure/REO
Loan to Value Ratio
State Code
Interest Paid to Date
Zip Code
PIF Data
Amortized Remaining Term
Q-1
EXHIBIT R
---------
FORM OF SPECIAL SERVICING AGREEMENT
-----------------------------------
This SPECIAL SERVICING AGREEMENT (the "AGREEMENT") is made and entered into
as of ____________ 1, 20__, between _______________, as seller and master
servicer (the "COMPANY"), _______________, as holder of the Class B Certificates
identified on Schedule I (the "CLASS B HOLDER") and _______________, [an
affiliate of the Class B Holder,] as special servicer (the "SPECIAL SERVICER").
PRELIMINARY STATEMENT
---------------------
WHEREAS, the Class B Holder is the holder of at least 75% of each the
classes of Mortgage Pass- Through Certificates (each a "CLASS B CERTIFICATE") of
the series of issuances (each a "SERIES") issued by the Company identified on
Schedule I attached hereto (such Schedule I, as may be modified or amended to
reflect (i) the purchase from time to time by the Class B Holder of interests in
any class of Class B Certificates of a Series such that the Class B Holder owns
not less than 75% of the then outstanding Certificate Principal Balance of such
Class B Certificates and (ii) the sale from time to time of the Class B Holder
of interests in any class of Class B Certificates of a Series such that the
Class B Holder owns less than 75% of the then outstanding Certificate Principal
Balance of such Class B Certificates, the "SCHEDULE I").
WHEREAS, each of the Class B Certificates was issued by the Company
pursuant to the Pooling and Servicing Agreement or Agreements (each a "POOLING
AND SERVICING AGREEMENT") identified on Schedule I and evidences an ownership
interest in a pool of Mortgage Loans.
WHEREAS, the Company is the Master Servicer of the Mortgage Loans related
to each Series and the Mortgage Loans are serviced in accordance with the
applicable Pooling and Servicing Agreement [and the Company's [Servicer Guide]
(the "SERVICER GUIDE")].
WHEREAS, in connection with the purchase by Class B Holder of a Series of
Class B Certificates (whether owned by the Class B Holder on the date hereof or
purchased by the Class B Holder at any time in the future), the Class B Holder
and the Company have agreed that (i) the Class B Holder, if it owns 75% of the
most subordinate outstanding class of Class B Certificates of a Series
(calculated by dividing the then outstanding Certificate Principal Balance of
such Class B Certificates by the then outstanding Certificate Principal Balance
of all certificates of the same class) may elect to have certain Mortgage Loans
with respect to the related Series that become 90 or more days delinquent (each
such Mortgage Loan, a "DELINQUENT MORTGAGE LOAN") serviced by the Special
Servicer (each such Delinquent Mortgage Loan, a "SPECIALLY SERVICED MORTGAGE
LOAN"), and (ii) with respect to Delinquent Mortgage Loans other than Specially
Serviced Mortgage Loans, the Company will provide to the Class B Holder such
information as is generated [pursuant to the terms of the Servicer Guide] by the
Company or a subservicer with respect to such Delinquent Loan.
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the Company, the Class B Holder and the Special Servicer
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS INCORPORATED BY REFERENCE.
R-1
Capitalized terms used but not otherwise defined in this Agreement shall
have the respective meaning ascribed thereto as set forth in the related Pooling
and Servicing Agreement [or the Servicer Guide, as the context may require].
ARTICLE II
DESIGNATION OF SPECIALLY SERVICED MORTGAGE LOANS AND SPECIAL
SERVICING PROCEDURES
Section 2.01 [Approval of _______________ as an Approved Servicer under the
Servicer Guide.
The Company hereby approves _______________ as an approved servicer for all
purposes under the terms of the Servicer Guide.]
Section 2.02 SPECIALLY SERVICED MORTGAGE LOANS.
To the extent and for so long as the Class B Certificates of a Series are
outstanding and the Class B Holder owns at least 75% of the most subordinate
outstanding class of the Class B Certificates of such Series (calculated by
dividing the then outstanding Certificate Principal Balance of such Class B
Certificates by the then outstanding Certificate Principal Balance of all
certificates of the same class), Delinquent Mortgage Loans of the related Series
may, at the option of the Class B Holder, be designated in writing by the Class
B Holder as Specially Serviced Mortgage Loans and transferred to the Special
Servicer for servicing. The Special Servicer shall service the Specially
Serviced Mortgage Loans in accordance with the terms of the related Pooling and
Servicing Agreement [and the Servicer Guide].
Following the designation of a Delinquent Mortgage Loan as a Specially
Serviced Loan, the Company shall transfer servicing of such Delinquent Mortgage
Loan to the Special Servicer substantially in the manner set forth herein and in
Schedule II hereto. [The parties hereto agree that any fees resulting from the
transfer of the servicing of a Delinquent Mortgage Loan from the Company or a
subservicer to the Special Servicer (or any successor thereto) shall be the
obligation of the Company.]
As of the Effective Date (as defined below) of each Specially Serviced
Mortgage Loan, the Special Servicer shall succeed to and undertake all rights,
duties and obligations of the prior servicer (including, without limitation, the
making of advances, any right to purchase such Specially Serviced Mortgage Loan
at the purchase price set forth in the related Pooling and Servicing Agreement
and the right to receive the servicing fee with respect to such Specially
Serviced Mortgage Loan) pursuant to and in accordance with the terms of the
related Pooling and Servicing Agreement [and the terms and conditions of the
Servicer Guide].
With respect to each Specially Serviced Mortgage Loan, the effective date
(the "EFFECTIVE DATE") shall be the first day of the month immediately following
the month of designation of such Specially Serviced Mortgage Loan as such,
provided that such written designation is received by the Company on or prior to
the 15th calendar day of such month.
Once a Delinquent Mortgage Loan becomes a Specially Serviced Mortgage Loan,
such Delinquent Mortgage Loan shall remain a Specially Serviced Mortgage Loan,
and shall continue to be serviced by the Special Servicer, until the earlier of
the liquidation or other disposition of such Specially Serviced Mortgage Loan or
the termination of this Agreement, regardless of delinquency status, whether the
related Mortgaged Property becomes an REO Property or otherwise; provided,
however, that if the Company exercises its right
R-2
as Master Servicer to purchase all of the Mortgage Loans in a Trust Fund
pursuant to an optional termination provision under the related Pooling and
Servicing Agreement, the servicing of any related Specially Serviced Mortgage
Loans with respect to which foreclosure proceedings have not been commenced
shall be transferred promptly by the Special Servicer in accordance with written
instructions from the Company.
If the Class B Holder (i) transfers such percentage interest in any Class B
Certificates of a Series such that the Class B Holder owns less than 75% of the
then outstanding Certificate Principal Balance of such class, or (ii) purchases
such percentage interest in any Class B Certificates of a Series such that the
Class B Holder owns 75% or more of the then outstanding Certificate Principal
Balance of such class, the Class B Holder shall promptly notify the Company and
the Special Servicer in writing of any such transfer or acquisition. Upon
receipt of written notice from the Class B Holder, the Company or the Class B
Holder shall revise Schedule I hereto to reflect any such transfer or
acquisition and shall forward promptly a copy of such revised schedule to the
Company or the Class B Holder, as applicable, and the Special Servicer. With
respect to the purchase of at least 75% of the Class B Certificates of any
Series by the Class B Holder after the date hereof, this Agreement shall be
effective as of the date such written notice of acquisition is received by the
Company.
If and to the extent the Company is permitted to purchase Delinquent
Mortgage Loans under the related Pooling and Servicing Agreement, the Class B
Holder may direct the Company to purchase any Specially Serviced Mortgage Loan
and to promptly resell such Mortgage Loan to the Class B Holder at the price and
on the terms set forth in such Pooling and Servicing Agreement. In the event the
Class B Holder directs the Company to purchase a Specially Serviced Mortgage
Loan as permitted under this Section, the Company shall promptly take all action
necessary under the terms of the related Pooling and Servicing Agreement in
order to accomplish such purchase (i.e. provide notification to the Trustee
and/or Custodian) and to resell such Specially Serviced Mortgage Loan to the
Class B Holder. The Class B Holder, and not the Company, shall be required to
remit the purchase price for such Specially Serviced Mortgage Loan to the
related Trustee. The Company will inform the Trustee in writing of the purchase
of such Specially Serviced Mortgage Loan by the Class B Holder and further shall
promptly take all actions necessary or desirable to effect the conveyance of
such Mortgage Loan and the related servicing rights to the Class B Holder or its
designee, time being of the essence.
Notwithstanding any provision herein to the contrary, the Special Servicer
shall (i) in no event be obligated to effect any cure or remedy in connection
with a deficiency in the documentation for any Specially Serviced Mortgage Loan
to the extent such deficiency existed at the time such Mortgage Loan became a
Specially Serviced Mortgage Loan or (ii) have any responsibility for any
obligations, duties, or liabilities of the Company with respect to the servicing
of a Specially Serviced Mortgage Loan that arose prior to the related Effective
Date for such Specially Serviced Mortgage Loan, other than those which would
customarily be assumed after the Effective Date.
Section 2.03 TERMINATION OF SPECIAL SERVICER FOR DEFAULT.
The Company shall have the right, immediately upon written notice, to
terminate the Special Servicer's right and obligation to subservice all of the
Specially Serviced Mortgage Loans hereunder in the event (each such event, an
"EVENT OF DEFAULT") of:
(i) any failure by the Special Servicer to remit to the Company for
distribution to the Certificateholders of a Series any payment (including
without limitation, any failure to make any required Advance) required to be
made under the terms of this Agreement or the related Pooling and Servicing
Agreement which continues unremedied for a period of one day after the date upon
which written notice of
R-3
such failure, requiring the same to be remedied, shall have been given to the
Special Servicer by the Company; or
(ii) any failure on the part of the Special Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Special Sub-Servicer contained in this Agreement (including any
breach of the Special Servicer's representations and warranties contained in
Section 4.03 hereof, which materially and adversely affects the interests of the
Certificateholders of a Series) which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Special Servicer by the Company; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Special Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Special Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Special
Servicer or of or relating to all or substantially all of its property; or
(v) the Special Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations.
If an Event of Default shall occur, then, and in each and every such case,
upon receipt of written notice from the Company, the Special Servicer shall
immediately remit to the Company all amounts in the Collection Accounts and the
Escrow Accounts and all rights of the Special Servicer to service the Specially
Serviced Mortgage Loans shall terminate. Following the receipt of written notice
from the Company as provided above, all authority and power of the Special
Sub-Servicer to subservice all the Specially Serviced Mortgage Loans shall pass
to and be vested in the Company pursuant to and under this Section 2.03, and the
Special Servicer shall do all things necessary to effect a transfer of the
servicing rights back to the Company. In this regard, the Company is hereby
authorized and empowered to execute and deliver, on behalf of the Special
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the affected Specially
Serviced Mortgage Loans and related documents, or otherwise. The Special
Servicer agrees to cooperate with the Company in implementing the termination of
the Special Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Company or its appointed agent for
administration by it of all amounts in the possession of the Special Servicer or
thereafter be received with respect to the Specially Serviced Mortgage Loans and
the transfer of the] servicing rights back to the Company.
Section 2.04 APPOINTMENT OF SUCCESSOR SPECIAL SERVICER.
The Class B Holder shall have the right, upon 90 days prior written notice
to the Company and the Special Servicer appoint a successor special servicer
having the characteristics set forth in clauses (i), (ii) and (iii) below, and
which shall succeed to all rights and assume all of the responsibilities, duties
and
R-4
liabilities of the Special Servicer under this Agreement simultaneously with the
termination of the Special Servicer's responsibilities, duties and liabilities
under this Agreement. In the event that the Special Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the foregoing, the Special Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The removal of the Special Servicer shall not become
effective until a successor shall be appointed pursuant to this Section and
shall in no event relieve the Special Servicer of the representations and
warranties made pursuant to Section 4.03 and the remedies available to the Class
B Holder and/or the Company under Sections 4.04 and 5.01, it being understood
and agreed that the provisions of such Sections 4.04 and 5.01 shall be
applicable to the Special Servicer notwithstanding any such termination of it,
or the termination of this Agreement.
Any successor special servicer shall (i) [be an institution having a net
worth of not less than $1,000,000][meet the eligibility requirements of an
approved servicer under the Company's Servicer Guide], (ii) the appointment of
such successor servicer will not result in the downgrading in any rating by any
applicable rating agency of any security issued in connection with the
applicable Pooling and Servicing Agreements, and (iii) have and keep in full
effect its existence, rights and franchises as a corporation (or such other
corporate form), and shall obtain its qualification to do business as a foreign
corporation (or such other corporate form) in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Specially Serviced Mortgage Loans
and to perform its duties under this Agreement. Any successor appointed as
provided herein shall execute, acknowledge and deliver to the Class B Holder and
the Company an instrument accepting such appointment, wherein the successor
shall make the representations and warranties set forth in Section 4.03,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Special Servicer,
with like effect as if originally named as a party to this Agreement.
Within 30 days of the appointment of a successor special servicer by the
Class B Holder, the Special Servicer shall prepare, execute and deliver to the
successor entity any and all documents and other instruments, place in such
successor's possession all servicing files related to the Specially Serviced
Mortgage Loans, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination [, including
but not limited to the transfer and endorsement of the related Mortgage Notes
and other documents, and the Class B Holder shall do or cause to be done the
preparation and recordation of Assignments of Mortgage and Deeds at the Class B
Holder's sole expense].
The Special Servicer shall cooperate with the Class B Holder and such
successor in effecting the termination of the Special Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor special servicer, including without
limitation, the transfer to such successor of all amounts received by it with
respect to the Specially Serviced Mortgage Loans. Further, the Special Servicer
shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in the successor all
such rights, powers, duties, responsibilities, obligations and liabilities of
the Special Servicer.
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ARTICLE III
DELINQUENT MORTGAGE LOANS OTHER THAN SPECIALLY SERVICED
MORTGAGE LOANS
Section 3.01 REPORTING OF DELINQUENT MORTGAGE LOANS.
(a) To the extent and for so long as the Class B Certificates of a Series are
outstanding and any interest in such Class B Certificates is held by the Class B
Holder, the Company, as Master Servicer of the Mortgage Loans related to each
Series, hereby agrees to provide to the Class B Holder the following notices and
reports:
Within three (3) Business Days after each Distribution Date (or included in
or with the monthly statements to Certificateholders pursuant to the related
Pooling and Servicing Agreement), the Company shall provide to the Class B
Holder a report, in tape format, containing the following information:
(1) With respect to each Series, the number and aggregate Principal Balance of
the Mortgage Loans delinquent one, two and three months or more, together
with the Principal Balance of each Mortgage Loan delinquent, one, two and
three months or more;
(2) With respect to each Series, the (i) number and aggregate Principal Balance
of Mortgage Loans with respect to which foreclosure proceedings have been
initiated, and (ii) the number and aggregate book value of Mortgaged
Properties acquired through foreclosure, deed in lieu of foreclosure or
other exercise of rights respecting the Trustee's security interest in the
Mortgage Loans, and with respect to each Mortgage Loan, the (i) Principal
Balance of each such Mortgage Loan with respect to which foreclosure
proceedings have been initiated, and (ii) the book value of each Mortgaged
Property acquired through foreclosure, deed in lieu of foreclosure or other
exercise of rights respecting the Trustee's security interest in the
related Mortgage Loan; and
(3) With respect to each Series, the amount of Realized Losses allocable to the
Certificates on the related Distribution Date and the cumulative amount of
Realized Losses allocated to such Certificates since the Cut-off Date, and
with respect to each Mortgage Loan, the amount of Realized Losses
attributable to such Mortgage Loan on the related Distribution Date and the
cumulative amount of Realized Losses attributable to such Mortgage Loan
since the Cut-off Date.
In addition, the Company, as Master Servicer of the Mortgage Loans, shall send,
or shall cause the related servicer to send, to the Class B Holder all other
written reports, documentation, instruments, certificates and correspondences
provided by a servicer under the terms of the Servicer Guide with respect to any
Mortgage Loan that becomes sixty (60) days or more delinquent.
(b) If requested by the Class B Holder, the Company shall make its
servicing personnel available to respond to reasonable inquiries, by phone or in
writing by facsimile, electronic, or overnight mail transmission, in connection
with any Mortgage Loan identified in any report or document provided pursuant to
clause (a) above; provided, that the Company shall only be required to provide
information that is reasonably accessible to its servicing personnel (or its
subservicers).
(c) In addition to the information described above, the Company shall
provide to the Class B Holder such information as the Class B Holder may
reasonably request; provided, however, that the Mortgage Loans are Delinquent
Mortgage Loans or the Mortgaged Property has been foreclosed upon. The
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Class B Holder will reimburse the Company for any reasonable out-of-pocket
expenses incurred by it in providing such information.
Section 3.02 SERVICING OF DELINQUENT MORTGAGE LOANS.
(a) Prior to the Commencement of Foreclosure of any Mortgage Loan, the
Company shall provide, or cause the related servicer to provide, the Class B
Holder with a notice (sent by telecopier) of such proposed and imminent
foreclosure, stating the loan number and the aggregate amount due under the
Mortgage Note.
For purposes of this Agreement, "COMMENCEMENT OF FORECLOSURE" shall mean
the first official action required under local law in order to commence
foreclosure proceedings or to schedule a trustee's sale under a deed of trust,
including (i) in the case of a mortgage, any filing or service of process
necessary to commence an action to foreclosure, or (ii) in the case of a deed of
trust, posting, the publishing, filing or delivery of a notice of sale, but not
including in either case (x) any notice of default, notice of intent to
foreclose or sell or any other action prerequisite to the actions specified in
(i) or (ii) above, (y) the acceptance of a deed-in-lieu of foreclosure (whether
in connection with a sale of the related property or otherwise) or (z)
initiation and completion of a short pay-off.
(b) In connection with any Delinquent Mortgage Loan with respect to which a
notice under clause (a) above has been delivered to the Class B Holder, the
Class B Holder shall provide the Company with written direction as to the action
to be taken with respect to such Delinquent Mortgage Loan, including, without
limitation, to proceed with foreclosure, to accept a deed-in-lieu of
foreclosure, to consent to a pre- foreclosure sale of Mortgaged Property at a
loss, or, if permitted under the terms of the related Pooling and Servicing
Agreement, to purchase Delinquent Mortgage Loans. Such written direction must be
received by the Company within two (2) Business Days of transmission of the
notice provided by the Company under clause (a) above. Such two (2) Business Day
period shall be extended for no longer than an additional three (3) Business
Days after the receipt of additional information requested if the Class B Holder
requests additional information related to such Delinquent Mortgage Loan;
provided, however that the Class B Holder will have at least one Business Day to
provide written direction after receipt of any requested additional information.
Any such additional information shall be provided only to the extent it is
obtainable by the Company from existing reports, certificates or statements or
otherwise be reasonably accessible to its servicing personnel (or subservicing
personnel). The Company shall as promptly as practicable carry out, or cause the
relevant servicer to carry out, the instruction of the Class B Holder in the
manner prescribed in such written direction. The Class B Holder agrees that it
has no right to negotiate directly with the Mortgagor during such period.
In the event the Class B Holder fails to provide any written direction as
provided above, the Company may take any such action as would be consistent with
customary servicing practices of prudent mortgage loan servicers and the
Company's normal policies and practice.
(c) With respect to any Delinquent Mortgage Loan for which the Company has
not provided a notice as contemplated in clause (a) above, the Class B Holder
may, at any time, provide the Company with written direction as to the action to
be taken with respect to such Delinquent Mortgage Loan, including, without
limitation, to commence foreclosure proceedings, to accept a deed-in-lieu of
foreclosure, to consent to a sale of Mortgaged Property at a loss, or, if
permitted under the terms of the related Pooling and Servicing Agreement, to
purchase Delinquent Mortgage Loans. To the extent such action is not
inconsistent with the terms of the related Pooling and Servicing Agreement or
the Company's duties thereunder as master servicer, the Company shall as
promptly as practicable carry out, or cause the relevant servicer to carry out,
the
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instruction of the Class B Holder in the manner prescribed in such written
direction.
(d) Any foreclosure of a Delinquent Mortgage Loan that has been initiated
in accordance with clauses (b) or (c) above may be discontinued if (i) the
Mortgage Loan has been brought current or if a refinancing or prepayment occurs
with respect to the Mortgage Loan (including by means of a short payoff approved
by the Class B Holder), (ii) the Company has agreed to the terms of a
forbearance agreement with the Mortgagor and such forbearance agreement has been
approved by the Class B Holder, or (iii) if and to the extent permitted under
the related Pooling and Servicing Agreement, Class B Holder directs the Company
to purchase such Delinquent Mortgage Loan at the price and on the terms set
forth in the related Pooling and Servicing Agreement.
(e) In the event the Class B Holder directs the Company to purchase a
Delinquent Mortgage Loan as permitted under Sections 2.02 and 3.02 (b), (c) and
(d), the Class B Holder may direct the Company to purchase any Delinquent
Mortgage Loan and to promptly resell such Mortgage Loan to the Class B Holder at
the price and on the terms set forth in the applicable Pooling and Servicing
Agreement. In the event the Class B Holder directs the Company to purchase a
Delinquent Mortgage Loan as permitted under this Section, the Company shall
promptly take all action necessary under the terms of the related Pooling and
Servicing Agreement in order to accomplish such purchase (i.e. provide
notification to the Trustee and/or Custodian) and to resell such Delinquent
Mortgage Loan to the Class B Holder. The Class B Holder, and not the Company,
shall be required to remit the purchase price for such Delinquent Mortgage Loan
to the related Trustee. The Company will inform the Trustee in writing of the
purchase of such Delinquent Mortgage Loan by the Class B Holder and further
shall promptly take all actions necessary or desirable to effect the conveyance
of such Mortgage Loan and the related servicing rights to the Class B Holder or
its designee, time being of the essence. [The parties hereto agree that, in
connection with a purchase of a Delinquent Mortgage Loan as provided above, any
fees resulting from the transfer of the servicing of such purchased Delinquent
Mortgage Loan from the Company or a subservicer to a servicer designated by the
Class B Holder shall be the obligation of the Company.]
Section 3.03 REVIEW OF THE COMPANY'S PROCEDURES.
The Company and the Class B Holder hereby agree that the Class B Holder
shall have the right, at its own expense and during normal business hours, to
review any and all of the books, records, or other information of the Company
which may be relevant to the Company's direct collection, loss mitigation
foreclosure and REO management procedures currently in place in order to confirm
that the procedures used by the Company and its subservicers are in accordance
with the customary servicing practices of prudent mortgage loan servicers. In
order to discuss such books, records or other information, the Company shall
make personnel available who are knowledgeable about such matters.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE CLASS B
HOLDER. The Class B Holder hereby makes the following representations and
warranties to the Company and the Special Servicer:
(i) ORGANIZATION AND GOOD STANDING. The Class B Holder is an entity
duly organized, validly existing, and in good standing under the laws of its
state of incorporation or formation or the laws of the United States.
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(ii) NO VIOLATION. Neither the execution and delivery by the Class B
Holder of this Agreement, nor the consummation by the Class B Holder of the
transactions contemplated hereby, nor the performance of and compliance by the
Class B Holder with the provisions of this Agreement, will conflict with or
result in a breach or violation of, or constitute a default (or an event which,
with notice or the lapse of time, or both, would constitute a default) under,
the organizational documents (its articles of incorporation or charter or
by-laws) of the Class B Holder, or any of the provisions of any law, rule,
regulation, judgment, decree, demand, or order (of any federal, state, or local
governmental or regulatory authority or court) binding on the Class B Holder, or
any of its respective properties, or any of the provisions of any indenture,
mortgage, contract, instrument, or other document to which the Class B Holder is
a party or by which it is bound, or result in the creation or imposition of any
lien, charge, or encumbrance upon any of their respective properties pursuant to
the terms of any indenture, mortgage, contract, instrument, or other document.
The Class B Holder is not otherwise in violation of any law, rule, regulation,
judgment, decree, demand, or order (of any federal, state or local governmental
or regulatory authority or court), which violation, in the Class B Holder's,
good faith and reasonable judgment, is likely to affect materially and adversely
its ability to perform its obligations hereunder.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Class B Holder of this Agreement, the consummation of the transactions
contemplated hereby, and the performance and compliance by the Class B Holder
with the terms hereof are within the powers of the Class B Holder, and have been
duly authorized by all necessary action on the part of the Class B Holder. All
organizational resolutions and consents necessary for the Class B Holder to
enter into and consummate all transactions contemplated hereby have been
obtained. This Agreement has been duly executed and delivered by the Class B
Holder and constitutes the legal, valid and binding obligation of the Class B
Holder, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and other similar
laws affecting creditors' rights generally, and to general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity
or at law. The Class B Holder has not failed to obtain any consent, approval,
authorization, or order of, or failed to cause any registration or qualification
with, any court or regulatory authority or other governmental body having
jurisdiction over it, which consent, approval, authorization, order,
registration, or qualification is required for, and the absence of which would
materially adversely affect, the legal and valid execution, delivery, and
performance of this Agreement by the Class B Holder.
(iv) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Class B Holder's knowledge, threatened against it, which, if
determined adversely to the Class B Holder would prohibit the Class B Holder
from entering into this Agreement or, in the good faith and reasonable judgment
of the Class B Holder, is likely to materially and adversely affect either the
ability of the Class B Holder to perform its obligations hereunder.
Section 4.02 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties to the
Class B Holder and the Special Servicer:
(i) ORGANIZATION AND GOOD STANDING. The Company is an entity duly
organized, validly existing, and in good standing under the laws of its state of
incorporation or formation or the laws of the United States, and is in
compliance with the laws of each state in which any property is located to the
extent necessary to ensure the enforceability of each Mortgage Loan and to
perform its obligations hereunder and the Pooling and Servicing Agreement.
(ii) NO VIOLATION. Neither the execution and delivery by Company of
this Agreement, nor the consummation by it of the transactions contemplated
hereby, nor the performance of and compliance by
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the Company with the provisions hereof or of the Pooling and Servicing
Agreement, will conflict with or result in a breach or violation of, or
constitute a default (or an event which, with notice or the lapse of time, or
both, would constitute a default) under, the organizational documents (its
articles of incorporation or charter or by-laws) of the Company, or any of the
provisions of any law, rule, regulation, judgment, decree, demand, or order (of
any federal, state, or local governmental or regulatory authority or court)
binding on the Company, or any of its properties, or any of the provisions of
any indenture, mortgage, contract, instrument, or other document (including,
without limitation, any Pooling and Servicing Agreement) to which the Company is
a party or by which it is bound, or result in the creation or imposition of any
lien, charge, or encumbrance upon any of their respective properties pursuant to
the terms of any indenture, mortgage, contract, instrument, or other document.
The Company is not otherwise in violation of any law, rule, regulation,
judgment, decree, demand, or order (of any federal, state or local governmental
or regulatory authority or court), which violation, in the Company's good faith
and reasonable judgment, is likely to affect materially and adversely either its
ability to perform its obligations hereunder or under the Pooling and Servicing
Agreements, or the financial condition of the Company.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Company of this Agreement, the consummation of the transactions contemplated
hereby, and the performance and compliance by the Company with the terms hereof
and of the Pooling and Servicing Agreements are within the powers of the
Company, and have been duly authorized by all necessary action on the part of
the Company. All organizational resolutions and consents necessary for the
Company to enter into and consummate all transactions contemplated hereby have
been obtained. This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, and other similar laws
affecting creditors' rights generally, and to general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity
or at law. The Company has not failed to obtain any consent, approval,
authorization, or order of, or failed to cause any registration or qualification
with, any court or regulatory authority or other governmental body having
jurisdiction over the Company, which consent, approval, authorization, order,
registration, or qualification is required for, and the absence of which would
materially adversely affect, the legal and valid execution, delivery, and
performance of this Agreement by the Company.
(iv) APPROVALS AND PERMITS. The Company possesses such certificates,
authorizations, licenses, and permits issued by the appropriate state, federal,
and foreign regulatory agencies or bodies necessary to conduct the business now
operated by it, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization, or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would materially and adversely affect
the conduct of the business, operations, financial condition, or income of the
Company.
(v) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Company's knowledge, threatened against it, which, if
determined adversely to the Company would prohibit the Company from entering
into this Agreement or, in the good faith and reasonable judgment of the
Company, is likely to materially and adversely affect either its ability to
perform its obligations hereunder or under the Pooling and Servicing Agreements
or the financial condition of the Company. The Company has no knowledge of any
recent adverse financial condition or event with respect to itself that, in its
good faith and reasonable judgment, is likely to materially and adversely affect
its ability to perform its obligations hereunder or under the Pooling and
Servicing Agreements.
(vi) FIDELITY BOND: ERRORS AND OMISSION INSURANCE. Each officer,
director, employee, consultant and advisor of the Company with responsibilities
concerning the servicing and administration of
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the Mortgage Loans is covered by errors and omissions insurance and fidelity
bond insurance in the amounts and with the coverage required under the related
Pooling and Servicing Agreement for it to maintain. Neither the Company nor any
of its officers, directors, employees, consultants, or advisors involved in the
servicing or administration of the Mortgage Loans has been refused such coverage
or insurance.
Section 4.03 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE SPECIAL
SERVICER. The Special Servicer hereby makes the following representations and
warranties to the Company and the Class B Holder:
(i) ORGANIZATION AND GOOD STANDING. The Special Servicer is an entity
duly organized, validly existing, and in good standing under the laws of its
state of incorporation or formation or the laws of the United States, and is in
compliance with the laws of each state in which any property is located to the
extent necessary to ensure the enforceability of each Mortgage Loan and to
perform its obligations hereunder.
(ii) NO VIOLATION. Neither the execution and delivery by Special
Servicer of this Agreement, nor the consummation by it of the transactions
contemplated hereby, nor the performance of and compliance by the Special
Servicer with the provisions hereof , will conflict with or result in a breach
or violation of, or constitute a default (or an event which, with notice or the
lapse of time, or both, would constitute a default) under, the organizational
documents (its articles of incorporation or charter or by-laws) of the Special
Servicer, or any of the provisions of any law, rule, regulation, judgment,
decree, demand, or order (of any federal, state, or local governmental or
regulatory authority or court) binding on the Special Servicer, or any of its
properties, or any of the provisions of any indenture, mortgage, contract,
instrument, or other document to which the Special Servicer is a party or by
which it is bound, or result in the creation or imposition of any lien, charge,
or encumbrance upon any of their respective properties pursuant to the terms of
any indenture, mortgage, contract, instrument, or other document. The Special
Servicer is not otherwise in violation of any law, rule, regulation, judgment,
decree, demand, or order (of any federal, state or local governmental or
regulatory authority or court), which violation, in the Special Servicer's good
faith and reasonable judgment, is likely to affect materially and adversely
either its ability to perform its obligations hereunder, or the financial
condition of the Special Servicer.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Special Servicer of this Agreement, the consummation of the transactions
contemplated hereby, and the performance and compliance by the Special Servicer
with the terms hereof are within the powers of the Special Servicer, and have
been duly authorized by all necessary action on the part of the Special
Servicer. All organizational resolutions and consents necessary for the Special
Servicer to enter into and consummate all transactions contemplated hereby have
been obtained. This Agreement has been duly executed and delivered by the
Special Servicer and constitutes the legal, valid and binding obligation of the
Special Servicer, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium, and other
similar laws affecting creditors' rights generally, and to general principles of
equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law. The Special Servicer has not failed to obtain any consent,
approval, authorization, or order of, or failed to cause any registration or
qualification with, any court or regulatory authority or other governmental body
having jurisdiction over the Special Servicer, which consent, approval,
authorization, order, registration, or qualification is required for, and the
absence of which would materially adversely affect, the legal and valid
execution, delivery, and performance of this Agreement by the Special Servicer.
(iv) APPROVALS AND PERMITS. The Special Servicer possesses such
certificates, authorizations, licenses, and permits issued by the appropriate
state, federal, and foreign regulatory agencies or bodies necessary to conduct
the business now operated by it, and its has not received any notice of
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proceedings relating to the revocation or modification of any such certificate,
authorization, or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would materially and adversely affect
the conduct of the business, operations, financial condition, or income of the
Special Servicer.
(v) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Special Servicer's knowledge, threatened against it, which,
if determined adversely to the Special Servicer would prohibit the Special
Servicer from entering into this Agreement or, in the good faith and reasonable
judgment of the Special Servicer, is likely to materially and adversely affect
either its ability to perform its obligations hereunder or the financial
condition of the Special Servicer. The Special Servicer has no knowledge of any
recent adverse financial condition or event with respect to itself that, in its
good faith and reasonable judgment, is likely to materially and adversely affect
its ability to perform its obligations hereunder.
(vi) FIDELITY BOND, ERRORS AND OMISSION INSURANCE. Each officer,
director, employee, consultant and advisor of the Special Servicer with
responsibilities concerning the servicing and administration of the Mortgage
Loans is covered by errors and omissions insurance and fidelity bond insurance
in the amounts and with the coverage required under the related Pooling and
Servicing Agreement to be maintained by the Company as master servicer. Neither
the Special Servicer nor any of its officers, directors, employees, consultants,
or advisors involved in the servicing or administration of the Mortgage Loans
has been refused such coverage or insurance.
(vii) APPROVED SELLER/SERVICER. The Special Servicer is approved as a
seller/servicer of single-family mortgage loans by the Department of Housing and
Urban Development.
Section 4.04 REMEDIES FOR BREACH OF REPRESENTATION AND WARRANTY.
Upon discovery by any of the Company, the Class B Holder or the Special
Servicer of a breach of any of the representations and warranties contained in
Article IV which materially and adversely affects the value of the Specially
Serviced Mortgage Loans or Delinquent Mortgage Loans, the party discovering such
breach shall give prompt written notice to the others.
Each of the parties hereto shall indemnify the others and hold each of them
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of such party's representations and
warranties contained in Article IV. It is understood and agreed that the
obligations to indemnify as provided in this Section 4.04 constitute the sole
remedies of each of the Company, Class B Holder and Special Servicer respecting
a breach of any other party's representations and warranties.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 INDEMNIFICATION.
Each of the Company, the Class B Holder and the Special Servicer (each as
such, an "INDEMNIFYING PARTY") shall indemnify the other parties hereto (each as
such, an "INDEMNIFIED PARTY") and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary
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legal fees and related costs, judgments, and any other costs, fees and expenses
(individually and collectively, the "CLAIMS") that such Indemnified Party may
sustain in any way related to the failure of the Indemnifying Party to perform
its duties in compliance with the terms of this Agreement; PROVIDED, that none
of the Company, the Class B Holder or the Special Servicer or any of the
directors, officers, employees or agents of the Depositor or the Servicer shall
be liable for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement, or for errors in judgment; PROVIDED,
HOWEVER, that this provision shall not protect the Company, the Class B Holder
or the Special Servicer against any material breach of warranties,
representations or covenants made herein, or against any specific liability
imposed on such party pursuant hereto, or against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder.
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Section 5.02 AMENDMENT.
This Agreement may be amended from time to time by written agreement signed
by each of the parties hereto.
Section 5.03 COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original and
such counterparts shall constitute but one and the same instrument.
Section 5.04 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Section 5.05 NOTICES.
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
(i) in the case of the Company,
Company
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the Class B
Holder and the Special Servicer in writing.
(ii) in the case of the Class B Holder,
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the Company in
writing.
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(iii) in the case of the Special Servicer,
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the Company in
writing.
Section 5.06 TERMINATION.
This Agreement shall terminate (i) at such time as the Principal Balance of
the Class B Certificates has been reduced to zero or (ii) if mutually agreed to
by the parties hereto.
Section 5.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement. If the invalidity of any part, provision, representation or warranty
of this Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is nearly as possible the same
as the economic effect of this Agreement without regard to such invalidity.
Section 5.08 SUCCESSORS AND ASSIGNS.
This Agreement may not be assigned by any party hereto without the prior
written consent of each of the other parties hereto. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
Section 5.09 ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
Section 5.10 CONFIDENTIALITY.
The Class B Holder agrees that all information supplied by or on behalf of
the Company pursuant to Sections 2.02 or 3.01, including individual account
information, is the property of the Company and the Class B Holder agrees to use
such information only for the purposes contemplated by this Agreement and
otherwise hold such information confidential and not to disclose such
information, except to the extent such information is made publicly available by
or on behalf of the Company or the relevant Trustee.
Section 5.11 PUBLICLY REGISTERED CERTIFICATES.
The Class B Holder agrees, that without the prior written consent of the
Company, so long as Class B Holder is a party to this Agreement and a holder of
any Class B Certificates of a Series, it will not purchase, sell or trade any
publicly registered Certificates of the same Series.
R-15
Section 5.12 NO PARTNERSHIP.
Nothing herein shall be deemed or construed to create a partnership or
joint venture between the parties hereto and the services of the Company shall
be rendered as an independent contractor and not as an agent for the Company.
Section 5.13 RIGHTS OF THE CLASS B HOLDER. Notwithstanding anything herein
to the contrary, it is agreed by the parties hereto that the rights of the Class
B Holder set forth under Article II and Section 3.02(e) of this Agreement shall
relate to, and be exercisable with respect to, the related Mortgage Loans of any
Series to the extent that and for so long as, the Class B Holder owns at least
75% of the most subordinate outstanding class of Class B Certificates of the
related Series (calculated by dividing the then outstanding Certificate
Principal Balance of such Class B Certificates by the then outstanding
Certificate Principal Balance of all certificates of the same class).
R-16
IN WITNESS WHEREOF, each of the parties hereto have caused its name to be
signed hereto by its respective officer thereunto duly authorized, all as of the
day and year first above written.
COMPANY
By: _______________________________
Name: _____________________________
Title: ____________________________
By: _______________________________
Name: _____________________________
Title: ____________________________
By: _______________________________
Name: _____________________________
Title: ____________________________
R-17
SCHEDULE I
Describe each Series of Class B Certificates and the related Pooling
and Servicing Agreement
R-18
SCHEDULE II
SPECIAL SERVICING TRANSFER PROCEDURES
Any transfer of servicing with respect to a Specially Serviced
Mortgage Loan shall be effected substantially in accordance with the following
example. All dates set forth below are for illustrative purposes only.
Capitalized terms used in this Exhibit shall have the meanings ascribed thereto
in the Agreement.
Timeline
--------
Last Business Day of Month One
Mortgagor is 89 Days Delinquent.
3rd Business Day of Month Two
The Company receives an electronic file from its Collections Department
on all 90+delinquent loans.
4th Business Day of Month Two
The Company sends the electronic file to Class B Holder/Special
Servicer of all 90+ delinquent loans with information designating those
loans where a forbearance plan or workout is in progress and those
loans where there is no plan in place. The Company and the Special
Servicer have a discussion. The loans to be transferred are determined
by the Class B Holder/Special Servicer.
6th Business Day of Month Two
The Special Servicer informs the Company of the loans designated as
Specially Serviced Mortgage Loans. The Company and the Special Servicer
coordinate the transfer of servicing of the Specially Serviced Mortgage
Loans. The Company prepares and mails the mortgagor notification no
later than the 13th calendar day of the month. If a loan reinstates to
a current or less than 90 days delinquent status before the mortgagor
notification (i.e., the "goodbye letter") is sent, such loan will be
removed from the transfer, and the Company will notify the Special
Servicer thereof. The borrower will be instructed to send the payment
due on the effective date of transfer and any past due payments to the
Special Servicer.
7th Business Day of Month Two
Relevant Trustee receives monthly electronic data file from the
Company. The subject loan is included in the Company's report as an
active loan serviced by the Company. The Company reports scheduled P&I
on the subject loan.
On or prior to 15th Calendar Day of Month Two
The Company sends a foreclosure referral letter to the Special
Servicer's foreclosure counsel with a corresponding foreclosure
package.
18th Calendar Day (or Business day immediately preceding the 18th) of Month Two
The Company makes its monthly remittance, including advancing scheduled
P&I payment due for current month for the subject loan.
Last business Day of Month Two
R-19
Month-end cut-off.
1st Business Day of Month Three
Effective Date.
On or Before 3rd Business Day of Month Three
In accordance with the Servicing Transfer Instructions:
Company sends Special Servicer final transfer data (e.g., trial
balance, loan files, current and previous 2 years' history records (if
applicable), all default-related correspondence, and all collection,
foreclosure and bankruptcy files);
Company provides Special Servicer with detailed reimbursement request
relating to advances; and
Company sends Special Servicer a check or wire for the net escrow and
unapplied funds.
On or before the 6th Business Day of Month Three
In accordance with the Servicing Transfer Instructions, Special Service
reimburses Company for all outstanding advances, and the scheduled
mortgage payment due on the Effective Date.
-------------------
Note:
1. If the loan has been transferred to Special Servicer and it cures,
Special Servicer continues to service the loan and report it to Company
as herein provided.
2. If the Class B Certificates of the related Series are reduced to zero,
Special Servicer will continue to service the mortgage loans until they
payoff or are liquidated. No other Delinquent Mortgage Loans of a
Series will be transferred to Special Servicer after the Class B
Certificates of such Series are reduced to zero.
R-20
SERVICING TRANSFER INSTRUCTIONS
I. NOTIFICATION OF LOANS TO TRANSFER
A. Company will coordinate and provide a listing of all loans past 90 days
delinquent. The list will be provided to Special Servicer for review and
discussion on the 4th Business day of each month.
B. Class B Holder and Special Servicer to agree upon the loans to be
transferred at month-end. The list must be provided via Facsimile or E-mail by
the 6th business day of the month to:
[COMPANY]
[Address and contact]
II. CONVERSION DATA
Dependent upon the volume of loans transferring each month, the loans will be
transferred effective the first of each month based on the prior month-end cut
off by one of the following mutually agreed upon conversion methods.
A. Manual conversion
1. Company to provide a "master file data record" (COMPANY reference
for master file data record?) for each loan (accompanied by a
listing of all code definitions).
2. Company to provide a trial balance containing all the loans.
B. Electronic conversion
1. Information will be provided in a Microsoft Excel spreadsheet (or
such other mutually agreeable format) containing mutually agreed
upon fields.
2. Company to provide a trial balance containing all the loans.
Preliminary information for either a manual or electronic conversion will be
provided within 3 business days of receipt of the List of Loans to Transfer to
provide time for Special Servicer to verify and load the information, with the
exception of the specific data that is determined at the transfer date.
III. HOMEOWNER NOTIFICATION
A. Company will mail the mortgagor notification (good-bye letter) fifteen
days prior to the transfer date. Company will forward a copy of its good-bye
letter to Special Servicer c/o [Dept.] (fax number ___-___- ____) for approval
prior to mailing.
B. Copies of Company's mortgagor notification letters will be provided to
Special Servicer.
C. Company to receive a sample of Special Servicer's mortgagor
notification (welcome letter) for approval prior to mailing.
R-21
IV. HAZARD/FLOOD INSURANCE
A. Company to prepare a change to the mortgagee clause as follows:
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
B. Copies of the mortgagee clause change requests will be provided to
Special Servicer.
C. Any unpaid policies, expiration notices, cancellation notices, loans
with expired policies will be properly identified, sorted and marked for special
handling.
D. Company to provide a list of loans under "force place coverage"
program. Force place hazard insurance policies with ASG will be canceled upon
transfer of the loans. WNC force place flood policy coverage will stay in place
after transfer until the expiration date.
V. FHA LOANS
A. Company to provide screen prints to include the following items on FHA
Loans with a monthly premium.
1. Loan number
2. FHA case number
3. Anniversary date
4. Annual premium
5. Monthly amount
6. Total MIP paid to date
7. Next month the premium is due
B. Company to provide screen prints to include the following items on FHA
loans that the full premium was paid up front.
1. Loan number
2. FHA case number
3. Insuring date
4. Amount of prepaid premium
C. Company to prepare HUD Form 92080 with Special Servicer's HUD mortgagee
number (72313) and forward to HUD electronically. Proof of submission will be
forwarded to Special Servicer.
VI. CONVENTIONAL LOANS
A. Individual loan PMI certificates will be retained in the Servicing File
B. Company to prepare notifications to the PMI companies requesting a
change of servicer to Special Servicer. Copies will be forwarded to Special
Servicer.
R-22
C. Company to provide screen prints of all loans with PMI to include:
1. Loan number
2. PMI company
3. PMI certificate number
4. Next due date
5. Last amount paid
VII. REAL ESTATE TAXES
A. Company to forward individual loan tax records showing payee, due
dates, frequency of payment, next due date, last paid date and last paid amount.
B Company to provide copies of the notifications to the individual tax
authorities and the Tax Service requests for a change of servicer to Special
Servicer under the following contract numbers (Transamerica- 2489 Pinnacle -
119)
C. All property taxes due and payable will be paid prior to the transfer
date.
D. All tax bills received after the transfer date will be forwarded to
Special Servicer for payment.
E. Company to provide a listing of any loans with delinquent taxes
containing the pertinent information as of the transfer date.
R-23
VIII. OPTIONAL INSURANCE
A. Company to provide a list of loans with A&H, life insurance, accidental
death insurance, etc., which will include the following information.
1. Loan number
2. Insurance company
3. Type of coverage
4. Amount of monthly premium
5. Last monthly premium paid
B. Company to provide copies of the master and/or individual policies for
the insurance coverage.
C. Company to provide copies of the notification sent to the insurance
companies.
IX. INVESTOR REPORTS
A. Company to provide a copy of the final remittance report to the
investor including a trial balance as of cutoff date.
B. Company to provide ending loan scheduled balance at transfer date.
C. Company to provide a report detailing advanced delinquent net interest
monthly by due date.
D. Company to provide a report detailing advanced delinquent principal
monthly by due date.
X. OTHER
A. Company to provide hard copies of the last 24 months history for each
loan accompanied by an explanation of transaction codes.
B. Company to provide copies of the last escrow analysis for each loan
with an explanation of analysis method (cushion, etc.).
C. Company to provide the loan servicing file in hard copy or microfiche
format.
D. Company to provide the currently active collection records and
pertinent information on delinquent loans.
E. Net escrow and unapplied funds as of the transfer date will be sent to
Special Servicer via check or wire within three business days of the transfer,
accompanied by an explanation of Unapplied Funds codes.
F. The advances (exclusive of escrow advances, which will be handled in
Section X (E) above) incurred by Company will be billed to Special Servicer
accompanied by appropriate documentation. Special Servicer to reimburse Company
via check or wire for all advances (exclusive of escrow advances, which will be
handled in Section X (E) above) on the subject loans within three business days
of receipt of billing.
R-24
G. Company to provide a listing containing the mortgagor name, co-mortgagor
name, property address and mailing address for preparation of Special Servicer's
Notification Letters.
H. Company to provide the following items, sorted and clearly marked for
special handling.
1. Active foreclosure and bankruptcy files should have the status shown
on the front of each file.
2. Insurance loss drafts should provide all documentation on the
current status.
3. Unprocessed payoff funds should be accompanied by a copy of the
payoff quotation.
4. Information should be furnished on any pending payoff or assumption.
5. Information on any incomplete partial releases should be provided.
I. Loan payments received after the cutoff will be endorsed to ________ and
forwarded by overnight service to the following address within twenty-four
hours, properly identified with Company's loan number.
[Address]
Returned Items received after the transfer date will be forwarded to Special
Servicer for reimbursement. Special Servicer to reimburse Company within 10
business days of receipt.
J. Company to ship all loan files and documentation related to the
individual transfers by the 3rd business day after the cut-off. Any information,
such as preliminary trial balances, master file data records, delinquency
information, etc. will be furnished as early as possible prior to the transfer
date.
R-25
All shipments to be sent to:
[Address]
K. Company to furnish all required IRS reporting statements for the
current year up to the transfer date, both to the mortgagors and to the
appropriate government agencies. Special Servicer to furnish all required year-
end reporting commencing on the effective date of transfer through the year-end.
R-26
EXHIBIT A to Schedule II
LOAN INFORMATION TO BE PROVIDED TO COMPANY
R-27
